Edutap Esi Sheet PDF

Summary Sheets for Economics and Social
Issues of Phase 2 of RBI Grade B 2018
Important Points
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for each topic. This is only the summary sheet and has to be read after going through
videos and notes
2. This Summary Sheet is useful for quick revision after you have read the concept notes
3. It would be useful to go through this summary sheet just before the exam or before any
Mock Test
4. Questions in the exam are concept based and reading only summary sheets shall not be
sufficient to answer all the questions
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Summary Sheet
Measurement of Growth- National Income and
per capita income
Important Points
1. Our course comprises of Video/s + Concept notes + Summary Sheet + Worksheet +

MCQs for each topic. This is only the summary sheet and has to be read after going
through videos and notes
Mock Test
4. Questions in the exam are concept based and reading only summary sheets shall not
be sufficient to answer all the questions

 What is an economy?
Economy is the large set of inter-related production and consumption activities that aid in determining
how scarce resources are allocated. This is also known as an economic system.
 Economic Growth:
Economic growth is an increase in the capacity of an economy to produce goods and services, compared
from one period of time to another.
 How can the capacity of an economy be measured?
This capacity of an economy can be measured through different indicators.
1. Gross Domestic Product (GDP): It is defined as the total market value of all final goods and services
produced within the country in a given period of time- usually a year. In estimating GDP, only final
marketable goods and services are considered. The value of intermediate goods is a part of the final
goods and services and so is not counted separately as it amounts to double counting and
exaggerates the value of output.
2. Gross National Product (GNP): In calculating GDP, we are not taking into account the income
earned by citizens of India working abroad. So, we need to find a way to take into account the
earnings made by Indians abroad or by the factors of production owned by Indians. Also we must
deduct the earnings of the foreigners who are working within our domestic economy or the
payments to the factors of production owned by the foreigners. To calculate this GNP is used.
GNP = GDP + Net Factor Income from Abroad
(Net factor income from abroad = Factor income earned by the domestic factors of production
employed in the rest of the world – Factor income earned by the factors of production of the rest of
the world employed in the domestic economy).
For open economy:

If it is an open economy with great levels of foreign investment (FDI) and lesser levels of
outbound FDI, its GDP is likely to be larger than GNP.
For closed economy:
If it is a closed economy where nobody leaves its shores, nobody invests abroad, nobody comes
in and nobody invests in the country, its GDP will be equal to GNP.
3. Net Domestic Product (NDP):
Net Domestic Product = GDP - depreciation
4. Net National Product (NNP):
Net National Product = GNP – Depreciation
 Factor Cost:
Factor costs are the actual production costs at which goods and services are produced by firms and
industries in an economy. They are the cost of all factors of production such as land, labor, capital, energy,
raw materials like steel, etc that are used to produce a given quantity of output in an economy. Also called
factor gate costs since all the costs that are incurred to produce a given quantity of goods and services take
place behind the factory gates.
 Market Price:
It refers to the actual transacted price and thus includes the indirect taxes which a government levies. Thus
there are two changes we make to the factor cost to arrive at the Market Price. We need to add the
indirect taxes and subtract the subsidies given by the government. Once a product is produced and it
leaves the factory gate, Market Price comes into play during the billing process, where the indirect taxes
levied by the government are added and this is the final cost the consumer has to pay for the product.
Subsidies are subtracted because it reduces the cost of production and thus the consumer has to pay less.
 National Income:
We have seen four indicators which are used to measure the capacity of an economy. Any of these
indicators can be considered as National Income of a country. For example, In India we calculate GDP and
this is taken to be our National Income. So, it varies from one country to another.
 Economic Growth Rate

An economic growth rate is a measure of economic growth from one period to another in percentage
terms.
In India we measure Economic Growth Rate by measuring the rate of change of GDP from one year to
another.

GDP is calculated at:
a. Current prices (Nominal GDP)

b. Constant prices (Real GDP)
 Nominal GDP: Nominal GDP refers to the current year production of final goods and services valued
at current year prices.
 Real GDP: If this measure is adjusted for inflation; it is expressed in real terms.
 Base Year:
It is a specific year against which the economic growth is measured. It is allocated a value of 100 in an
index. The estimates at the prevailing prices of the current year are termed as "at current prices", while
those prepared at base year prices are termed "at constant prices".
The base year is changed periodically to take into account the structural changes which take place in the
economy.
 New Base Year 2011-12:
The Ministry of Statistics & Programme Implementation has released the new series of national accounts,
revising the base year from 2004-05 to 2011-12.
Other changes: GDP will now onwards be calculated at Market Prices instead of the calculating GDP at
factor cost.
To measure the change of prices, various indicators can be used:
 GDP Deflator:
Notice that the ratio of nominal GDP to real GDP gives us an idea of how the prices have moved from the
base year (the year whose prices are being used to calculate the real GDP) to the current year. In the
calculation of real and nominal GDP of the current year, the volume of production is fixed. Therefore, if
these measures differ it is only due to change in the price level between the base year and the current
year. The ratio of nominal to real GDP is a well known index of prices. This is called GDP Deflator.

 Methods to estimate National Income:
1. OUTPUT METHOD/PRODUCT METHOD
2. EXPENDITURE METHOD
3. INCOME METHOD
Product Method:
In this method, national income is measured as a flow of goods and services. We calculate money value of
all final goods and services produced in an economy during a year. Final goods here refer to those goods
which are directly consumed and not used in further production process. The money value is calculated at
market prices so sum-total is the GDP at market prices.
Expenditure Method:
In this method, national income is measured as a flow of expenditure. GDP is sum-total of private
consumption expenditure. Government consumption expenditure, gross capital formation (Government
and private) and net exports (Export-Import).
Income Method:
Under this method, national income is measured as a flow of factor incomes. There are generally four
factors of production labour, capital, land and entrepreneurship. Labour gets wages and salaries, capital
gets interest, land gets rent and entrepreneurship gets profit as their remuneration.
Besides, there are some self-employed persons who employ their own labour and capital such as doctors,
advocates, CAs, etc. Their income is called mixed income. The sum-total of all these factor incomes is called
NDP at factor costs.
 Other concepts:
Per Capita Income (PCI):
Per Capita Income (PCI) is per capita GDP i.e. GDP divided by midyear population of the corresponding
year. Similarly, per capita GNP can also be calculated.
Purchasing Powers Parity (PPP):
There are two ways to measure GDP (total income of a country) of different countries and compare them.
One way, called GDP at exchange rate, is when the currencies of all countries are converted into USD
(United States Dollar). The second way is GDP (PPP) or GDP at Purchasing Power Parity (PPP).

Every three years, the World Bank constructs and releases a report that compares various countries in
terms of PPP and U.S. dollars.
Both the International Monetary Fund (IMF) and the Organization for Economic Cooperation and
Development (OECD) use weights based on PPP metrics to make predictions and recommend economic
policy.
Gross Value Added (GVA):
GVA is defined as the value of output less the value of intermediate consumption. For example, if the value
of final output is Rs.20 and that of an intermediate product is Rs.16, then the value addition is Rs.4. The
gross value addition – when value additions at all intermediate stages are calculated should be equal to the
GDP, i.e Rs.20.
What is the significance of GVA:
Value added represents the contribution of labour and capital to the production process. India has started
using GVA at basic price for the calculation for GDP.
Basic Prices:
When Factor cost is taken and two changes are made to it, we get the Basic Prices. First, we need to add
the production tax (e.g. tax —land revenues, stamps fees, registration fees tax on the profession) and then
subtract the production subsidies (e.g. subsidies to Railways, input subsidies to farmers, subsidies to the
village and small industries, administrative subsidies to corporations or cooperatives, etc.)
Transfer payments:
It refers to payments made by government to individuals for which there is no economic activity in return
by these individuals. Examples include pensions, scholarships, etc.
Personal Income:
Personal Income (PI) ≡ NI – Undistributed profits – Net interest payments made by households – Corporate
tax + Transfer payments to the households from the government and firms.
Personal Disposable Income (PDI):

Personal Disposable Income is the part of the aggregate income which belongs to the households. They
may decide to consume a part of it, and save the rest.
Personal Disposable Income (PDI) ≡ PI – Personal tax payments – Non-tax payments.

India’s GDP by various reports/financial institutions:
1. Economic Survey 2016-17:
The survey projects the economy to grow in the range of 6.75% to 7.5% in fiscal year 2017-18 in the post-
demonetization year. It says that the adverse impact of demonetization on GDP growth will be transitional.
2. International Monetary Fund:
Update: July, 2017
The World Economic Outlook (WEO) is a survey conducted and published by the International Monetary
Fund. The International Monetary Fund (IMF) kept its outlook for India GDP growth rate unchanged at
7.2% in 2017-18 and 7.7% in 2018-19.
3. World Bank:
Update: June, 2017
The Global Economic Prospects Report is published by the World Bank. It is published annually and partly
updated two times a year. World Bank in its latest Global Economic Prospects Report projects India’s
growth to 7.5% in 2018 and 7.7% in 2019.
4. Asian Development Bank:
Update: April, 2017
The Asian Development Outlook is an annual publication (available online and in print) produced by
the Asian Development Bank (ADB). India’s economy is set to grow at 7.4% in the current fiscal year 2017-
18 against 7.1% in the previous year, on the back of pick-up in consumption demand and higher public
investment.
5. UN Economic and Social Commission for Asia and the Pacific (ESCAP):
The UN Economic and Social Commission for Asia and the Pacific (ESCAP) said in its annual flagship report
‘The Economic and Social Survey of Asia and the Pacific 2017’ that the economic growth for India is
projected to be stable at 7.1% in 2017 before edging up to 7.5% in 2018, underpinned by higher private
and public consumption and increased infrastructure spending.
India is expected to clock 7.1% growth this year before edging up to 7.5% in 2018, according to the UN
report, which warned that the country faces heightened risks related to the concentration of bad loans in
the public sector banks.
6. UN World Economic Situation and Prospects:
Update: May, 2017
The UN World Economic Situation and Prospects as of mid- 2017 report, said India is projected to achieve a
7.3% growth in 2017, a downward revision from the 7.7% forecast for the year made when the report was
launched in January.
The revised report, however, projected that India will achieve an impressive 7.9% GDP growth in 2018,
revising upwards its January estimates when it had said India’s growth will be 7.6% next year.
7. FICCI
India’s economy is set to grow by a robust 7.4% in the current fiscal, backed by the agriculture sector which
is estimated to clock 3.5% growth and improvement in the performance of the industry and services
sector.
However, the economists participating in the Economic Outlook Survey brought out by industry body FICCI
have forecast the country’s gross domestic product (GDP) growth for 2016-17 to be between 6.6% and
7.1%, with some even anticipating the fourth quarter (January-March) economic growth to be lower than
the previous quarter numbers.
8. Central Statistics Office
Update: June, 2017
 Gross domestic product (GDP) growth slowed to 6.1% in the fiscal fourth quarter from 7% in the
third, according to data released by the government.
 Real gross value added (GVA), another measure of economic activity that is arrived at by excluding
net indirect taxes from GDP, slowed to a growth pace of 5.6% in the March quarter, also the fourth
consecutive quarterly decline.
 The Central Statistics Office maintained its earlier full-year growth estimate for 2016-17 at 7.1% on
top of revised 8% growth in the previous financial year.
 India’s per capita income in real terms in 2016-17 also slowed to a growth pace of 5.7% to
Rs.82,296 ($1,276) against 6.8% growth last year.
India’s ranking in the world:
In terms of GDP at PPP:

For 2016: Updated July, 2017 (World Bank)
Can GDP symbolize the overall development of a country?
The following arguments make us realize the fact that GDP alone cannot symbolize the development of a
country.
1. Distribution of GDP – how uniform is it : If the GDP of the country is rising, the welfare may not
rise as a consequence. This is because the rise in GDP may be concentrated in the hands of very few
individuals or firms.
2. Unaccounted activities: Many activities in an economy are not evaluated in monetary terms. For
example, the domestic services women perform at home are not paid for.
3. Does not take into account the overall social development of a nation. For that purpose, we need to
look at other indicators like Human Development Index as well. Only when there is inclusive
development, a country is said to prosper.
Worksheet
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Worksheets on this topic. Work sheet consists of
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Summary Sheet
ESI- Human Development
Important Points
videos and notes
Mock Test

 What is Human Development?
Human development – or the human development approach - is about expanding the richness of human
life, rather than simply the richness of the economy in which human beings live. It is an approach that is
focused on creating fair opportunities and choices for all people.
Human development is about the real freedom ordinary people have to decide who to be, what to do, and
how to live.
 Dimensions of Human Development:
Three foundations for human development are to live a healthy and creative life, to be knowledgeable, and
to have access to resources needed for a decent standard of living.
 How important is human development?
A country can never progress until and unless its people lead a healthy and happy life.
Even an economic development of a country depends on its human resources. Capital, natural resources, as
well as other productive resources remain inactive in the nature. Human resources are necessary to mobilize
them. For example: Nepal has sufficient natural resources and utilization of these resources in necessary for
economic development.
 Concept of Human Development:
The human development concept was developed by economist Mahbub ul Haq. At the World Bank in the
1970s, and later as minister of finance in his own country, Pakistan, Dr. Haq argued that existing measures
of human progress failed to account for the true purpose of development—to improve people’s lives.

Working with Nobel Laureate Amartya Sen and other gifted economists, in 1990 Dr. Haq published the first
Human Development Report, which was commissioned by the United Nations Development Programme.
 The Human Development Report:
The Human Development Report (HDR) is an annual milestone published by the Human Development Report
Office of the United Nations Development Programme (UNDP) (UNDP: Headquartered in New York City)
The only year without a Human Development Report since 1990 was 2012. The latest report was launched
on 21 March 2017.
In addition to a global Report, UNDP publishes regional, national, and local Human Development Reports.
 The Human Development Index (HDI):
The first Human Development Report introduced the Human Development Index (HDI) as a measure of
achievement in the basic dimensions of human development across countries.
Components of Human Development Index:
 HDI is a composite statistic of life expectancy, education, and per capita income indicators, which are
used to rank countries into four tiers of human development. Countries are ranked based on scale
ranging between 0 (low) to 1 (high).
 Countries fall into four broad human development categories: Very High Human Development, High
Human Development, Medium Human Development and Low Human Development.
 A country scores higher HDI when the lifespan is higher, the education level is higher, and the GDP
per capita is higher.
 Human Development Report 2016:
The 2016 Human Development Report by the United Nations Development Programme was released on
March 21, 2017, and calculates HDI values based on estimates for 2015. The report is titled: Human
Development for Everyone.
The 2016 Report retains all the composite indices from the family of human development indices—the HDI,
the Inequality-adjusted Human Development Index (IHDI), the Gender Development Index (GDI), the Gender
Inequality Index (GII) and the Multidimensional Poverty Index (MPI).
 Salient features of the report (Where India stands):

 India’s rank: India has been placed at 131st position among 188 countries with a score of 0.624.
 It has been placed in the group of ‘medium’ human development countries.
 India’s HDI value increased from 0.428 in 1990 to 0.624 in 2015. However, its average annual growth
in HDI (1990-2015) was higher than that of other medium HDI countries.
 In 2015 HDI, India ranked 130 with score of 0.609 and was placed in the medium human development
category.
 Life expectancy at birth: In India, it has increased from 68 years (2015 HDI) to an average of 68.3
years — 69.9 years for women and 66.9 years for men.
 Access to knowledge: India’s expected years of schooling remains at 11.7 years, while mean years of
schooling increased from 5.4 (2015 HDI) to 6.3 years.
 India’s Gross National Income (GNI) based on per capita purchasing power parity (PPP). It has risen
from $5,497 (2015 HDI) to $5,663.
 The index was topped by Norway with a score of 0.949.
 Inequality-Adjusted HDI (IHDI):

 The IHDI takes into account not only the average achievements of a country on health, education and
income, but also how those achievements are distributed among its population by “discounting” each
dimension’s average value according to its level of inequality.
 An IHDI value can be interpreted as the level of human development when inequality is accounted
for.
 The relative difference between IHDI and HDI values is the loss due to inequality in distribution of the
HDI within the country.
India related data:

 India’s HDI was pegged at 0.624, but its value falls 27.2% after being adjusted for inequalities,
resulting in a HDI value of 0.455.
 Life expectancy adjusted with inequalities between 2010 and 2015 fell 24%, resulting in a value of
0.565.
 The percentage of inequality in education in 2015 was 39.4% or 0.324 and inequality in income
16.1% or 0.512.

 Gender Development Index (GDI)
 The GDI measures gender gaps in human development achievements by accounting for disparities
between women and men in three basic dimensions of human development—health, knowledge and
living standards using the same component indicators as in the HDI.
 The GDI shows how much women are lagging behind their male counterparts and how much women
need to catch up within each dimension of human development.
 The closer the ratio is to 1, the smaller the gap between women and men.
India related data: India’s GDI is 0.819, compared to the developing country average of 0.913.
 Gender Inequality Index (GII)

 The GII is an inequality index. It measures gender inequalities in three important aspects of human
development—reproductive health, measured by maternal mortality ratio and adolescent birth
rates; empowerment, measured by proportion of parliamentary seats occupied by females and
proportion of adult females and males aged 25 years and older with at least some secondary
education; and economic status, expressed as labour market participation and measured by labour
force participation rate of female and male populations aged 15 years and older.
 The higher the GII value the more disparities between females and males and the more loss to human
development.
India related data:

 India is ranked 125 of 159 countries in the Gender Inequality Index (GII).
 The ratio of maternal mortality is 174 against every 100,000 live births.
 Only 12.2 per cent of Parliament seats are held by women.
 26.8 per cent of women above the age of 15 years are part of India’s labour force — compared to
79.1 per cent men.
 Women’s empowerment in terms of mean number of years of schooling is only 4.8 years,
compared to 8.2 years for males.
 Multidimensional Poverty Index (MPI)

The index identifies deprivations across the same three dimensions (education, health and living standards)
as the HDI and shows the number of people who are multidimensionally poor (suffering deprivations in 33%
or more of the weighted indicators) and the number of weighted deprivations with which poor households
typically contend with.

India related data: 55.3% of India’s population is living under multidimensional poverty.
 India’s public expenditure on health:
South Asia also has the lowest public expenditure on health as a percentage of GDP, at 1.6%. India’s
expenditure is even lower, at 1.4% of GDP.
 Gini Coefficient / Gini Index:

The Gini coefficient provides an index to measure inequality. It is a way of comparing how distribution of
income in a society compares with a similar society in which everyone earned exactly the same amount.
Inequality on the Gini scale is measured between 0, where everybody is equal, and 1, where all the country's
income is earned by a single person.
India related data: India’s Gini coefficient stood at 0.352 in 2016 report.
 India’s position compared to BRICS countries:
Among BRICS nations, India ranks behind the other four countries of Brazil, Russia, China and South Africa.
Russia stands first with a score of 0.804.
 India’s position compared to SAARC Countries (in terms of HDI index):
It is ranked third among the SAARC countries, behind Sri Lanka (73) and the Maldives (105), both of which
figure in the “high human development” category and a little higher than Bhutan (132), Bangladesh (139),
Pakistan (147), Afghanistan (169) and Nepal (144).
 India’s HDI value over the years:
India’s HDI has been increasing over the years, the report says, with an increase of close to 46% between
1990 and 2015. Its HDI rank has risen by four places since 2010.
 Gross National Happiness:

Gross National Happiness (GNH) is a measurement of the collective happiness in a nation. In the
1970s, developing countries were focused on increasing economic success to help develop prosperity.
Bhutan's King, Jigme Wangchuck, however, believed an economic approach dehumanized the development
process.

The concept of GNH has often been explained by its four pillars: good governance, sustainable socio-
economic development, cultural preservation, and environmental conservation. Lately the four pillars have
been further classified into nine domains in order to create widespread understanding of GNH and to reflect
the holistic range of GNH values.
The nine domains are: psychological wellbeing, health, education, time use, cultural diversity and resilience,
good governance, community vitality, ecological diversity and resilience, and living standards.
In India, In July 2016, Madhya Pradesh became the first state to announce its happiness department.
Andhra Pradesh is the second state in the country after Madhya Pradesh to start a Happiness Index
Department.
 World Happiness Report:

India ranked at 122 out of 155 countries in the World Happiness Report 2017 published by the UN
Sustainable Development Solutions Network on the eve of International Day of Happiness (20 March).
The rankings are based factors such as inequality, life expectancy, GDP per capita, public trust (i.e. a lack of
corruption in government and business), and social support. Together they are used to generate a happiness
score of country on a scale from 1 to 10.This year it is fifth such report since the first was published in 2012.
Norway emerged as the happiest country, followed by Denmark and Iceland in the second and the third
position.
 Conclusion:
Any index, be it HDI or GDP of a country when analyzed individually cannot provide the complete picture of
human development of a country and its economy. We need to look at a bigger picture and take all possible
indexes into account. Any nation cannot prosper without the upliftment of its people. Only healthy, happy
people can build a prosperous nation.
Work Sheets
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Work sheet consists of

2. True /False
3. MCQs
4. Match the column
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Summary Sheet
ESI- Monetary Policy
Important Points
videos and notes
Mock Test

 Monetary Policy: What is it?
Monetary policy is the process by which the monetary authority of a country, like the central bank or
currency board, controls the supply of money, often targeting an inflation rate or interest rate to
ensure price stability and general trust in the currency.
In India, The Reserve Bank of India (RBI) is vested with the responsibility of conducting monetary policy.
This responsibility is explicitly mandated under the Reserve Bank of India Act, 1934.
 Primary Objective of Monetary Policy:
In India, the primary objective of monetary policy is to maintain price stability while keeping in mind the
objective of growth. Price stability is a necessary precondition to sustainable growth.
 Inflation Targeting Framework:

 In May 2016, the Reserve Bank of India (RBI) Act, 1934 was amended to provide a statutory basis
for the implementation of the flexible inflation targeting framework.
 The amended RBI Act also provides for the inflation target to be set by the Government of India,
in consultation with the Reserve Bank, once in every five years.
 Accordingly, the Central Government has notified in the Official Gazette 4 per cent Consumer
Price Index (CPI) inflation as the target for the period from August 5, 2016 to March 31, 2021 with
the upper tolerance limit of 6 per cent and the lower tolerance limit of 2 per cent.
 The Central Government notified the following as factors that constitute failure to achieve the
inflation target:
(a) The average inflation is more than the upper tolerance level of the inflation target for any
three consecutive quarters; or
(b) The average inflation is less than the lower tolerance level for any three consecutive quarters.
 The framework aims at setting the policy (repo) rate based on an assessment of the current and
evolving macroeconomic situation.
The policy rate is the key lending rate of the central bank in a country. It is a monetary policy instrument
under the control of the Central Bank -Reserve Bank of India (RBI) - to regulate the availability, cost and
use of money and credit.

 Monetary Policy Committee: Before the amendment to the RBI Act, 1934, the policy rate was
decided by the RBI Governor. But the amendment to the RBI Act, 1934 in May 2016, provided
for the formation of an empowered six-member monetary policy committee (MPC).
Accordingly, the Central Government in September 2016 constituted the MPC as under:
 Governor of the Reserve Bank of India – Chairperson, ex officio;
 Deputy Governor of the Reserve Bank of India, in charge of Monetary Policy – Member, ex
officio;
 One officer of the Reserve Bank of India to be nominated by the Central Board – Member, ex
officio;
 Shri Chetan Ghate, Professor, Indian Statistical Institute (ISI) – Member;
 Professor Pami Dua, Director, Delhi School of Economics – Member; and
 Dr. Ravindra H. Dholakia, Professor, Indian Institute of Management, Ahmedabad – Member
(Members referred to at 4 to 6 above, will hold office for a period of four years or until further orders,
whichever is earlier).
The MPC determines the policy interest rate required to achieve the inflation target. The first meeting
of the MPC was held on October 3 and 4, 2016 in the run up to the Fourth Bi-monthly Monetary Policy
Statement, 2016-17. (Every two months RBI comes out with the Monetary Policy Statement).
What the RBI has to do?

RBI has to reduce/increase the money supply by reducing/increasing the policy rate. This will reduce
or induce inflation.
 Instruments of Monetary Policy:
The instruments of monetary policy are of two types: first, quantitative, general or indirect; and
second, qualitative, selective or direct. They affect the level of aggregate demand through the supply
of money, cost of money and availability of credit. Quantitative tools are general and Indirect in
nature. Qualitative tools are specific and direct in nature.

Quantitative tools include Cash Reserve Ratio (CRR), Statutory Liquid Ratio (SLR), Repo rate, Reverse
Repo rate, Marginal Standing Facility, Bank Rate and Open Market Operations.
Qualitative tools include Loan to Value (LTV) ratio, Priority Sector Lending, Moral Suasion and Direct
Action.
 Quantitative tools of RBI:
 Cash Reserve Ratio (CRR)

It is the amount of money that the banks have to keep with RBI in cash form. It is nothing but the
average daily balance that a bank shall maintain with the Reserve Bank as a share of such per cent of its
NDTL (net demand and time liabilities) that the Reserve Bank may notify from time to time in the Gazette
of India.
 Statutory Liquidity Ratio (SLR)

It is the amount of liquid reserves that each bank has to keep with itself in the form of either cash, gold
or RBI approved securities (Government Securities, etc). In other words, it is nothing but the share of
NDTL that banks shall maintain in safe and liquid assets, such as, unencumbered government securities,
cash and gold. Changes in SLR often influence the availability of resources in the banking system for
lending to the private sector.
 Liquidity Adjustment Facility (LAF):
LAF is used to aid banks in adjusting the day to day mismatches in liquidity. LAF helps banks to quickly
borrow money in case of any emergency or for adjusting in their SLR/CRR requirements. LAF consists of
repo and reverse repo operations.
 Repo Rate
Repo or repurchase option is a collaterised lending i.e. banks borrow money from Reserve bank of India
to meet short term needs by selling securities to RBI with an agreement to repurchase the same at
predetermined rate and date. The rate charged by RBI for this transaction is called the repo rate. Repo
operations therefore inject liquidity into the system.

 Reverse Repo Rate:
Reverse repo operation is when RBI borrows money from banks by lending securities. The interest rate
paid by RBI in this case is called the reverse repo rate. Reverse repo operation therefore absorbs the
liquidity in the system.
 Marginal Standing Facility (MSF)

It is a facility under which scheduled commercial banks can borrow additional amount of overnight
money from the Reserve Bank by dipping into their Statutory Liquidity Ratio (SLR) portfolio up to a limit
(currently one per cent of their net demand and time liabilities deposits (NDTL) at a penal rate of interest,
currently 25 basis points above the repo rate. This provides a safety valve against unanticipated liquidity
shocks to the banking system.
 Policy rate corridor:
Corridor: The MSF rate and reverse repo rate determine the corridor for the daily movement in the
weighted average call money rate (Call money is the overnight funds that are lent by one bank to another
bank and call money rate is the rate at which this is done). LAF corridor is the difference between the
repo rate and the reverse repo rate.
RBI, in its first bi-monthly monetary policy review of 2017-18, decided to narrow the policy rate corridor
by 25 basis points. A narrow corridor is expected to check money flow into the banking system and to
drain out additional liquidity.
So the correct decreasing order becomes:

MSF > REPO RATE > REVERSE REPO RATE
 Open Market Operations

These include both outright purchase and sale of government securities for injection and absorption of
durable liquidity, respectively.
 Bank Rate
In simple terms, Bank Rate is a rate at which RBI lends money to commercial banks without any security.
Impact: When bank rate is increased interest rate also increases which have negative impact on demand
thus prices decreases.
 To summarize:

(The fourth column needs to be updated after every bi-monthly policy statement of RBI)
Tool To Combat To induce inflation/ Current Value

Inflation combat disinflation/ (As per the third bi-
combat deflation monthly policy
Statement, 2017-18
released by RBI on
August, 02, 2017)
CRR Increase Decrease 4%
SLR Increase Decrease 20%
REPO RATE Increase Decrease 6%
REVERSE REPO RATE Increase Decrease 5.75%
MSF Increase Decrease 6.25%
BANK RATE Increase Decrease 6.25%
OPEN MARKET OPERATIONS RBI sells RBI buys Government -
Government Securities
Securities
These values are variable and have to be updated
 Qualitative Tools:
 Rationing of credit/ Priority sector lending

Priority sector refers to those sectors of the economy which may not get timely and adequate credit in
the absence of this special dispensation. It is aimed to provide institutional credit to those sectors and
segments for whom it is difficult to get credit.
Priority Sector includes the following categories:

Agriculture
Micro and Small Enterprises
Education
Housing
Export Credit
Others
PSL Targets:

RBI has given specific targets for certain categories. The limits (sub-categories) and implementation
timelines are different for domestic banks, foreign banks having less than 20 branches in India and
foreign banks having 20 or more than 20 branches in India.
Thus, for domestic banks,
Categories Percentage of loans

Total Priority Sector 40%
Agriculture 18% (8% of this to small and marginal
farmers)
Micro-Enterprises 7.5%
Weaker Sections 10%
Others 4.5%
The following chart gives the total priority sector target for foreign banks.
Priority Sector Lending Certificates (PSLCs):
Priority Sector Lending Certificates (PSLCs) are a mechanism to enable banks to achieve the priority
sector lending target and sub-targets by purchase of these instruments in the event of shortfall. This
also incentivizes surplus banks as it allows them to sell their excess achievement over targets thereby
enhancing lending to the categories under priority sector. Under the PSLC mechanism, the seller sells
fulfillment of priority sector obligation and the buyer buys the obligation with no transfer of risk or loan
assets.
What happens if the PSL targets are not met by the banks?

Case 1: For Domestic banks and foreign banks having 20 and more than 20 branches in India: The amount
that is lagging in the target goes to the RIDF (Rural Infrastructure Development Fund) which is managed
by NABARD (National Bank for Agriculture and Rural Development).
Case 2: For Foreign banks having less than 20 branches in India: The amount that is lagging in the target
goes to SEDF (Small Enterprises Development Fund) which is managed by SIDBI (Small Industries
Development Bank of India).
 Loan to Value Ratio (LTV) / Margin Requirements:

It is the amount of loan that is given against a fixed value of collateral. For example: Suppose a person
wants to get a loan by mortgaging its gold worth Rs.1 lakh. The LTV is 60%, then the amount of loan the
person will receive is Rs. 60,000.
 Moral Suasion
Moral Suasion is just as a request by the RBI to the commercial banks to take certain actions and
measures as per the trend of the economy. RBI may request commercial banks not to give loans for
unproductive purpose which does not add to economic growth but increases inflation.
 Direct Action
This step is taken by the RBI against banks that don’t fulfill conditions and requirements. RBI may
refuse to rediscount their papers or may give excess credits or charge a penal rate of interest over and
above the Bank rate, for credit demanded beyond a limit.
 Open and Transparent Monetary Policy making:

The MPC (Monetary Policy Committee) is required to meet at least four times in a year. The quorum for
the meeting of the MPC is four members. Each member of the MPC has one vote, and in the event of an
equality of votes, the Governor has a second or casting vote. On the 14th day, the minutes of the
proceedings of the MPC are published which include: the resolution adopted by the MPC; the vote of
each member on the resolution, and the statement of each member on the resolution adopted.
 Types of Monetary Policy followed by RBI:
Accommodative Monetary Policy: It is followed by RBI to increase the money supply in the economy.
This is done by lowering of the repo rate by the RBI (though there are other tools as well) so that

borrowing money gets easier. It is done to boost the economy when it is slowing. This type of policy is
also called as Easy or Expansionary Monetary Policy of the RBI.
Contractionary Monetary Policy: It is followed by RBI to decrease the overall supply of money in the
economy. This is done by RBI with the help of increasing the repo rate. This is makes consumption
difficult in the economy. This is done in order to control inflation.
A neutral stance of RBI provides it the flexibility to move in either of the directions. But, prevailing risk
of inflation may mean that the RBI won't cut down the interest rates.
Quantitative easing by RBI: Quantitative easing is an unconventional monetary policy in which a central
bank purchases government securities or other securities from the market in order to lower interest
rates and increase the money supply. Quantitative easing increases the money supply by flooding
financial institutions with capital in an effort to promote increased lending and liquidity. Quantitative
easing is considered when short-term interest rates are at or approaching zero, and does not involve
the printing of new banknotes.
Note: In February, 2017, in its bi-monthly monetary policy statement, RBI has changed its stance of
monetary policy from accommodative to neutral.
 Market Stabilization Scheme (MSS):
Market Stabilization scheme (MSS) is a monetary policy intervention by the RBI to withdraw excess
liquidity (or money supply) by selling government securities in the economy. The MSS was introduced
in April 2004. The issued securities are government bonds and they are called as Market Stabilization
Bonds (MSBs). Thus, the bonds issued under MSS are called MSBs. These securities are owned by the
government though they are issued by the RBI.
In the wake of demonetization, the government has increased the amount of MSBs to be issued to Rs
6 lakh crores from just 0.3 lakh crores.
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Summary Sheet
ESI- Fiscal Policy
Important Points
videos and notes
Mock Test

 What is fiscal Policy?
Fiscal policy is the means by which a government adjusts its spending levels and tax rates to monitor
and influence a nation's economy.
It is the sister strategy to monetary policy through which a central bank influences a nation's money
supply. These two policies are used in various combinations to direct a country's economic goals.
 How does the fiscal policy work?
The governments can influence macroeconomic productivity levels by increasing or decreasing tax levels
and public. This influence, in turn, curbs inflation, increases employment and maintains a healthy value
of money. The idea, however, is to find a balance between changing tax rates and public spending.
 Types of Fiscal Policy:
Neutral Fiscal Policy:
This implies a balanced budget where (Government spending = Tax revenue). It further means that
government spending is fully funded by tax revenue and overall the budget outcome has a neutral effect
on the level of economic activity.
Contractionary (restrictive) Fiscal policy:
This policy involves raising taxes or cutting government spending, so that (Government spending < Tax
revenue) it cuts up on the aggregate demand (thus, economic growth) and to reduce the inflationary
pressures in the economy.
Expansionary Fiscal Policy:
It is generally used for giving stimulus to the economy i.e., to speed up the rate of GDP growth or during
a recession when growth in national income is not sufficient enough to maintain the present standards
of living. A tax cut and/or an increase in government spending would be implemented to stimulate
economic growth and lower unemployment rates. This is not a sustainable policy, as it leads to budget
deficits and thus, should be used with caution.
Budget deficit: When the government’s budget expenditure exceeds its budget revenue, it results in
budget deficit.

 Tools of fiscal policy:
The tools of fiscal policy can be studied under two categories: Components of spending and
Components of earning.
 Components of Spending:
Maintenance (including staff salaries):

This component can’t be altered in short-run and hence is hardly a part of policy making.
Loan payments:
This again is a component, which can’t be touched in short-run, however, governments in long-run can
reduce these payments or eliminate them by running the budget surplus.
Subsidies:
This component is a major part of policy as it can be altered in short-run, but unfortunately, subsidies as
policy instrument, have been abused in India. These are used by politicians as poll promise and political
instruments to gain more popular support.
Welfare schemes:
These are one of the policy options that once introduced can’t be removed due to their populist nature.
Similarly, in most of the cases these are necessary too and important instrument of social welfare and
economic growth.
Wasteful expenses:
Needless to say these are the expenditures that must be curbed with immediate effect; For example,
full page government advertisements in newspaper to generate favorable public opinion.
 Components of Earning:
Tax:
It is the single most important source on government revenue and is also a very important policy
measure.
Borrowing:
Borrowing is a necessary source of funds, though not a desirable one. Particularly, in developing
countries, as tax/GDP ratio is low due to less per capita income.
Proceeds from sale/lease of assets:

This is a both a one-time and regular source of income. For example, lending government buildings for
private use, or other assets such as telecom spectrum or lease of a mine block for certain years, is a
regular source of income, whereas sale of PSUs is a onetime income. These however, are good sources
of revenue, as they provide government more room to spend without increasing taxes.
Profits from Public Sector Understandings (PSUs):

Profits from PSUs can also be a potential source of revenue, however, since most of PSUs are generating
losses, Indian government usually ends up subsidizing them.
 Objectives of India's Fiscal Policy: The fiscal policy is designed to achieve certain objectives as
follows:-
Development by effective Mobilization of Resources: This objective of economic growth and

development can be achieved by mobilization of Financial Resources. The financial resources can be
mobilized by Taxation; Public Savings; Private Savings.
Reduction in inequalities of Income and Wealth: The direct taxes such as income tax are charged more
on the rich people as compared to lower income groups. Indirect taxes are also more in the case of semi-
luxury and luxury items which are mostly consumed by the upper middle class and the upper class. The
government invests a significant proportion of its tax revenue in the implementation of Poverty
Alleviation Programmes to improve the conditions of poor people in society.
Price Stability and Control of Inflation: The government always aims to control the inflation by reducing
fiscal deficits, introducing tax savings schemes, productive use of financial resources, etc.
Employment Generation: The government is making every possible effort to increase employment in
the country through effective fiscal measures. Investment in infrastructure has resulted in direct and
indirect employment. Lower taxes and duties on small-scale industrial (SSI) units encourage more
investment and consequently generate more employment.

Balanced Regional Development: There are various projects like building up dams on rivers, electricity,
schools, roads, industrial projects etc run by the government to mitigate the regional imbalances in the
country. This is done with the help of public expenditure.
Reducing the Deficit in the Balance of Payment: Some time, government gives export incentives to the
exporters to boost up the export from the country. In the same way import curbing measures are also
adopted to check import. Hence the combine impact of these measures is improvement in the balance
of payment of the country.
Increases National Income: It’s the strength of the fiscal policy that is brings out the desired results in
the economy. When the government wants to increase the income of the country then it increases the
direct and indirect taxes rates in the country.
Development of Infrastructure: When the government of the concerned country spends money on the
projects like railways, schools, dams, electricity, roads etc to increase the welfare of the citizens, it
improves the infrastructure of the country.
Foreign Exchange Earnings: When the central government of the country gives incentives like,
exemption in custom duty, concession in excise duty while producing things in the domestic markets, it
motivates the foreign investors to increase the investment in the domestic country.
 Monetary Policy or Fiscal Policy: Which is more effective? In recent decades, monetary policy
has become more popular because: Monetary policy is set by the Central Bank, and therefore
reduces political influence; Fiscal policy can have more supply side effects on the wider economy.
Monetarists argue expansionary fiscal policy (larger budget deficit) is likely to cause crowding
out – higher government spending reduces private sector expenditure, and higher government
borrowing pushes up interest rates; Expansionary fiscal policy (e.g. more government spending)
may lead to special interest groups pushing for spending which isn’t really helpful and then
proves difficult to reduce when the recession is over; Monetary policy is quicker to implement.
 Union (Central Budget of India):

Central Government is constitutionally (As per the Article 112 of the Constitution of India) required to
lay an “annual financial statement” before both the houses of Parliament. This statement is
conventionally called Government Budget.
Accordingly, in India, every year Central (or Union) Budget for the coming financial year is presented by
the Union Finance Minister in the Lok Sabha. The Government Budget is passed by the legislature and
approved by the President.
 The Budget documents presented to Parliament comprise, besides the Finance Minister's
Budget Speech, of the following:
Annual Financial Statement (AFS); Demand for Grants (DG); Appropriation Bill; Finance Bill;
Memorandum Explaining the Provisions in the Finance Bill; Macro-economic framework for the relevant
financial year; Fiscal Policy Strategy Statement for the financial year; Medium Term Fiscal Policy
Statement; Expenditure Profile; Expenditure Budget; Receipts Budget
Other Budget related documents are: Detailed Demand for Grants; Economic Survey; Status of
implementation of provisions in Finance Minister's previous Budget speech
 The Government account is categorized into the following: Consolidated Fund of India;
Contingency Fund of India; Public Account
Consolidated Fund of India:
Consolidated Fund of India is the most important of all government funds. All revenues raised by
government, money borrowed and receipts from loans given by government flow into it. All government
expenditures other than certain exceptional items met from Contingency Fund and Public Account are
made from this account. No money can be appropriated from the fund except in accordance with the
law.
Contingency Fund of India:
Any urgent or unforeseen expenditure is met from this fund. It is a Rs 500 crore fund which is at the
disposal of the President of India. Any expenditure from this fund requires subsequent approval from
the Parliament and any amount withdrawn must be returned to the Contingency Fund from the
Consolidated Fund of India.
Public Account:
Public Account is used in relation to all the fund flows where Government is acting as a banker. For e.g.
Provident Funds and Small Savings. This money does not belong to government but is to be returned to
the depositors. The expenditure from it need not be approved by the Parliament.
Revised Estimates:
Revised Estimates reflect the supplementary requirements for funds submitted to the Parliament by
Ministries and Departments as Supplementary Demands for Grants.
 Components of Union Budget in India:
Note: Budget 2017-18 contains three major reforms: advancement of date of presentation of Budget
(usually it used to be presented on the last day of February but this year it was presented on the 1 st
day of February), merger of railway budget with general budget, Plan and non-Plan expenditure
classification was done away with (The earlier plan and non-plan distinction had resulted in a skewed
pattern of expenditure allocation. There was an excessive focus on plan expenditure).
Significance:

Advancing the budget day would help ensure that implementation of the new schemes can begin as
soon as the financial year begins. It gives time to the departments and ministries to prepare for
implementation and plan their spending. This is consistent with best practices in other countries.
Plan Expenditure and Non-plan expenditure:
Plan expenditure is associated with productive expenditure, which increases the productive capacity
of the economy.
Non-plan revenue expenditure is accounted for by interest payments, subsidies (mainly on food and
fertilizers), wage and salary payments to government employees, grants to States and Union
Territories governments, pensions, police, economic services in various sectors, other general services
such as tax collection, social services, and grants to foreign governments.
Let us study the components one by one in detail:
The budget is divided into two parts:
 Revenue Budget and Capital Budget: The Revenue Budget comprises revenue receipts and
expenditure met from these revenues. The revenue receipts include both tax revenue (like
income tax, Central GST etc) and non-tax revenue (like interest receipts, profits). Capital Budget
consists of capital receipts (like borrowing, disinvestment) and long period capital expenditure
(creation of assets, investment).
What are receipts? Any accrual of money from any source is called a receipt.
 What are revenue receipts? Those receipts which neither create liability nor reduce assets are
known as revenue receipts.
There are 2 types of Revenue Receipts:

1. Tax revenue receipts
2. Non Tax revenue receipts
Tax Revenue Receipts are the receipts of the Government of India from direct as well as indirect taxes.
Examples: Income tax, Corporate Tax, GST (Indirect Tax), Custom duty.

Taxes can be progressive, proportional or regressive.
Progressive tax: A tax that takes a larger percentage of income from high-income groups than from
low-income groups. For example: Personal Income Tax.
Proportional tax: A tax that takes the same percentage of income from all income groups. For
example: Corporate Tax
Regressive tax: A tax that takes a larger percentage of income from low-income groups than from
high-income groups. For example: Service Tax.
Non Tax Revenue Receipts are the receipts that the Government receives from the following sources:
Dividends/profits from PSU’s; By providing services such as power, telecommunication, etc; GRANTS
received by the government; INTEREST PAYMENTS received by the government on the money lent by it;
By issuing challans, imposing penalties, etc
 What is revenue expenditure? It is that expenditure that generally does not result in the creation
of productive assets. It is usually recurring in nature. Also called maintenance expenditure.
Examples: salaries, pensions, money spent on various social services, subsidies, INTEREST PAID
BY government on loans, GRANTS given by GOI to states and other nations.
What is Revenue deficit?

• Total Revenue Receipts – Total Revenue Expenditure
• If this number comes out to be negative, it would be called Revenue Deficit.
 What are capital receipts? All the non revenue receipts of the GOI. These are those receipts
which either create liability or reduce assets.
Examples: Loans (Internal + External); Money in PPF, Small saving schemes, etc; The above two are debt
creating capital receipts; Proceeds from disinvestment; Recovery of principal amount of loan; The above
two are non debt creating capital receipts
 What is capital expenditure? It is that part of total expenditure that leads to the creation of
productive assets. It is usually not recurring in nature.
Examples: Capital expenditure on defence; Loans given by GOI to states, etc

What is fiscal deficit?
• It is equal to (Total Revenue Receipts + Non debt Capital Receipts) – (Total Expenditure)
• If this value comes out to be negative, it would be a deficit.
• Total expenditure includes Revenue + Capital expenditure.
• It shows the amount of borrowing that the government will have to do.
Primary deficit is equal to Fiscal deficit – Interest liabilities.
Budget deficit is the excess of Total Expenditure over Total Receipts.
Effective Revenue Deficit: Effective Revenue Deficit is the difference between revenue deficit and
grants for creation of capital assets. In other words, the Effective Revenue Deficit excludes those
revenue expenditures which were done in the form of grants for creation of capital assets.
 What is Fiscal Consolidation? Fiscal consolidation is a process where government’s fiscal health
is getting improved and is indicated by reduced fiscal deficit. Improved tax revenue realization
and better aligned expenditure are the components of fiscal consolidation as the fiscal deficit
reaches at a manageable level.
In India, fiscal consolidation or the fiscal roadmap for the centre is expressed in terms of the budgetary
targets (fiscal deficit and revenue deficit) to be realized in successive budgets. The Fiscal Responsibility
and Budget Management (FRBM) Act gives the targets for fiscal consolidation in India.

FRBM Act:
The Fiscal Responsibility and Budget Management Act or the FRBM Act, 2003 is an Act mandating Central
Government to ensure intergenerational equity in fiscal management and long term macro-economic
stability.
The Act also aims at prudential debt management consistent with fiscal sustainability through-
 Limits on the Central Government borrowings, debt and deficits

 Greater transparency in fiscal operations of the Central Government
 Conducting fiscal policy in a medium term framework.
The Act stipulates that the following documents shall be laid before Parliament in addition to the
Budget documents:
 Medium Term Fiscal Policy Statement

 Fiscal Policy Strategy Statement
 Macro-economic Framework Statement
According to FRBM, the government should eliminate revenue deficit and reduce fiscal deficit to 3%
(medium term) of the GDP. Amendment to the FRBM in 2015 makes a rolling target and envisaged to
realize the 3% FD target by 2018. But the 2017-18 budget has extended the time line for the achievement
of the target by one more year ie. to 2018-19.
 Review of the fiscal policy 2016-17
Fiscal policy in 2016-17 was guided by the macroeconomic imperative of increasing investments for
promoting growth.
Expenditure focus: The expenditure focus of the Government was primarily on infrastructure sectors.
Impetus was given to agricultural and rural sectors as well. Higher budgetary provision was made for
these 3 broad sectors and with the core developmental schemes of the Government. In a time when
demand was depressed it was felt that the Government should step-in to bridge the gap.
Real Growth in 2016-17: Based on data available till October 2016, the CSO estimates that the economy
will grow in real terms by 7.1 per cent.

Real Growth compared to 2015-16: Fall in rate of real GDP growth by 50 basis points from 2015-16,
reflects the impact of a sluggish investment recovery and private consumption
Expenditure plan of the government: The enhanced capacity generated by Government investment in
the infrastructure sectors is expected to increase the potential output in the economy, thereby
expanding the opportunities for higher growth. The total expenditure is now estimated at Rs 20,14,407
crore (13.4 per cent of GDP) in the revised estimates of 2016-17.
Gross tax to GDP ratio: The gross tax to GDP ratio is estimated at 11.3 per cent in the revised estimates
of the financial year 2016-17 as compared to 10.8 per cent estimated in BE 2016-17. For the first time
since 2007-08, the gross tax to GDP ratio is estimated to cross the 11 per cent mark. Consequently, along
with the Centre, even the State Governments' finances are slated to receive a big boost, as they are
entitled to 42 per cent of the divisible pool of taxes. This is a big boost to the economy, considering that
the tax to GDP ratio had been stagnating in the range of 10 per cent since 2008-09.
Non-Tax Revenues: Despite shortfall of approximately Rs 20,280 crore from telecom receipts the overall
non tax revenues is estimated to increase by Rs 11,849 crore in the revised estimates for 2016-17.
Conclusion: To conclude, the fiscal policy of the Government in 2016-17, despite difficult conditions
have shown several positives. The share of capital expenditure improved from 12.5 per cent estimated
in budget estimates to 13.9 per cent of total expenditure in the revised estimates and; the government
was able to create additional fiscal space to remain within the budgeted fiscal deficit target of 3.5 per
cent of GDP despite an anticipated slowdown in the pace of economic growth.
 Fiscal Policy 2017-18:
Fiscal policy of the Government in Budget 2017- 18 is guided by the larger macroeconomic needs of
reviving the growth momentum while being committed to fiscal consolidation.
Fiscal Deficits: With regard to deficits, the fiscal policy of the Government continues to be guided by the
principle of gradual adjustment. The fiscal deficit target of 3 per cent of GDP for 2017-18, as per the
amended FRBM Act is estimated to be achieved by 2018-19. The government, on a re-assessment of the
macroeconomic needs of higher public expenditure has tilted in favour of a gradual reduction by 0.3 per
cent of GDP in 2017-18. The fiscal deficit for 2017-18 has therefore been pegged at 3.2 per cent of GDP,
so as to utilize the additional fiscal space for on investment for capital generation and necessary social
sector expenditure as growth drivers.
Capital Expenditure: The capital expenditure of the Government is estimated at 14.4 per cent of the
total expenditure in BE 2017-18 against 12.5 per cent in BE 2016-17.
Gross tax to GDP: In Budget 2017-18, the gross tax revenue has been estimated at 11.3 per cent of GDP.
Gross Tax revenues: The growth in gross tax revenues has been estimated to be moderate considering
the high base on account of substantial growth achieved in the current year. In BE 2017-18, the growth
in gross tax revenues have been estimated at 12.2 per cent over the revised estimates of 2016-17 as
against the growth of 17 per cent growth estimated in the revised estimates of current year.
 Expenditure policy 2017-18
Total Expenditure: The total expenditure of the Government is estimated at Rs 21,46,735 crore in BE
2017-18 which is estimated at 12.7 per cent of GDP as against 13.4 per cent of GDP in the revised
estimates of 2016-17.
Revenue Expenditure and Capital Expenditure: The revenue expenditure of the Government is
estimated at Rs 18,36,934 crore in BE 2017-18 which is 85.6 per cent of the total expenditure, while the
Capital expenditure is estimated at `3,09,801 crore which is 14.4 per cent of the total expenditure.
Effective Revenue Deficit: The effective revenue deficit budgeted at Rs 1,25,813 crore in 2017-18 will
be 0.7 per cent of GDP as against 1.2 per cent of GDP estimated in BE 2016-17.

 Tax Policy 2017-18:
In the case of individuals, HUFs (Hindu Undivided Families), association of persons, body of individuals
and artificial persons, it is proposed to lower the tax rate from existing ten per cent to five per cent
where the total income is between two lakh fifty thousand rupees and five lakh rupees and in the case
of resident individual between the age of sixty years and eighty years, where the total income is between
three lakh rupees and five lakh rupees
It is proposed that in the case of domestic companies having total turnover or gross receipts not
exceeding fifty crore rupees in financial year 2015-16, the income-tax shall be charged at the rate of
twenty-five per cent. All other domestic companies shall be liable to tax at the rate of thirty per cent in
respect of income earned in the financial year 2017- 18, assessable in the assessment year 2018- 19.
It is further proposed to introduce fresh levy of surcharge at the rate of ten per cent in the case of
individuals, HUFs, association of persons, body of individuals and artificial persons, having total income
between fifty lakh and one crore rupees in addition to the surcharge currently being levied at the rate
of fifteen per cent if their total income exceeds one crore rupees. In all other cases, the rate of surcharge
shall continue to be the same as in the financial year 2016-17.
The major reform in the Indirect Tax regime is the introduction of GST from 01st July, 2017. It will be
covered in detail in the GST unit in the Finance section.
 Let us see the significant changes that occurred in the Central finances during the past three
years in the following areas:
 Tax-GDP ratio: We see a significant improvement in the tax to GDP ratio. The reason for this
increase is the additional mobilization of resources.
Because of the following, there was an increase in the tax to GDP ratio:
 Personal Income tax collections went up due to the implementation of the recommendations of
the Seventh Pay Commission.
 Two specific initiatives, i.e., Swachh Bharat Cess, a collection introduced with effect from
November 2015 to contribute to Swachh Bharat initiatives, and KrishiKalyanCess, introduced with
effect from June 2016 to finance improvements in agriculture and farmer’s welfare, accounted
for more than one-third of the robust growth in service tax collections in 2016-17.

 The growth in excise collections from petroleum products contributed more than two-thirds of
the growth in total excise collections.
Note: The growth in gross tax revenue in 2016-17 was the highest in the last six years mainly on account
of buoyant revenue collection from excise duty.
 How has the revenue expenditure of the government grown? Revenue expenditure is
considered as non-asset creating expenditure. In the recent years it is seen that gradual tilt in
expenditure towards investment spending and consolidation of revenue expenditure has led to
the progressive reduction in revenue and fiscal deficits, relative to GDP.
In 2016-17, let us see what factors led to the growth of revenue expenditure:
 The first was the increase in expenses on salaries and pensions in the last year that largely
reflected the increase in the incomes of employees and pensioners during the year on account
of the Pay Commission. But if we minus this component, the growth in the revenue expenditure
was much lower in 2016-17. Major subsidies, including those on food, petroleum and fertilizers,
as percentage of the GDP has been consistently declining from 2012-13.
 The second reason for the increase in revenue expenditure in 2016-17 is the increase of 26.4 per
cent in the grants for creation of capital assets (GCCA). All grants given to the State Governments
and Union Territories are treated as revenue expenditure, but a part of these grants are used for
creation of capital assets. The investment push that the Central Government expenditure
provides to the economy can be approximated by subtracting GCCA from revenue expenditure
and adding it to the capital expenditure. This adjustment increases the growth in capital
expenditures in the year significantly.
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Summary Sheet
ESI- Poverty
Important Points
videos and notes
Mock Test

 What is Poverty?
Poverty is a state or condition in which a person or community lacks the financial resources and
essentials to enjoy a minimum standard of life and well-being that's considered acceptable in society.
 Types of poverty
Basically, poverty can be divided into two types: Absolute Poverty and Relative Poverty.
Absolute Poverty:
 It is the extreme kind of poverty involving the chronic lack of basic food, clean water, health
and housing.
 People in absolute poverty tend to struggle to live and experience a lot of child deaths from
preventable diseases like malaria, cholera and water-contamination related diseases.
 Absolute poverty is measured against a pre-determined level of living that families should be
able to afford.
Relative Poverty:
 Relative poverty is closely associated with the issues of inequality.

 Relative poverty occurs when people in a country do not enjoy a certain minimum level of living
standards as compared to the rest of the population and so would vary from country to country,
sometimes within the same country.
 Gini-coefficient can be used to measure poverty in the relative sense.
There may be other types of poverty also like Situational Poverty (Transitory), Generational (Chronic
Poverty).
Multidimensional Poverty:
Multidimensional poverty is made up of several factors that constitute poor people’s experience of
deprivation – such as poor health, lack of education, inadequate living standard, lack of income (as one
of several factors considered), disempowerment, poor quality of work and threat from violence.

 Measuring Poverty: Conventionally, poverty is measured by defining a threshold level of
expenditure (or income) required to purchase goods and services necessary to satisfy basic needs
at the minimal socially acceptable level.
This threshold level of expenditure is called the poverty line and the proportion of population living
below it is called the poverty ratio.
 Identification of poor in India:
In India, identification of poor is done by the State Governments based on information from Below
Poverty Line (BPL) censuses of which the latest is the Socio-Economic Caste Census 2011 (SECC 2011).
The current official measures of poverty are based on the Tendulkar Poverty Line. But this line has been
controversial with many observers criticizing it as being too low. The controversies led the previous
government to appoint the Rangarajan Committee, which recommended higher rural and urban poverty
lines. To understand and appreciate the problem fully, let’s take look at various committees formed for
Poverty Estimation in India.
 Important Committees for Poverty Estimation in India:
 First Planning Commission working group:

The concept of the poverty line was first introduced by a working group of the Planning Commission in
1962 and subsequently expanded in 1979 by a task force. The 1962 working group recommended that
the national minimum for each household of five persons should be not less than Rs 100 per month for
rural and Rs. 125 for urban at 1960-61 prices. These estimates excluded the expenditure on health and
education, which both were expected to be provided by the state.
 Y K Alagh Committee (1979):

 Till 1979, the approach to estimate poverty was traditional i.e. lack of income.
 It was later decided to measure poverty precisely as starvation i.e. in terms of how much people
eat.
 This approach was first of all adopted by the YK Alagh Committee’s recommendation in 1979
whereby, the people consuming less than 2100 calories in the urban areas or less than 2400
calories in the rural areas are poor.
 Now these calorie requirements needs some ‘monetary value’ which can be determined by
ascertaining ‘quantity’ of consumption and ‘prices/value’ of that quantity. Data relating to
quantity and value was provided by NSSO survey.

 It was estimated that, on an average, consumer expenditure (food and non-food) of Rs.49.09
per capita per month was associated with a calorie intake of 2400 per capita per day in rural
areas and Rs.56.64 per capita per month with a calorie intake of 2100 per day in urban areas.
This ‘Monthly Per Capita Expenditure’ was termed as poverty line.
 Moreover, an implicit assumption was that the states would take care of the health and
education of the people. Thus, YK Alagh eventually defined the first poverty line in India.
 Lakdawala Committee (1993):

 The following were the suggestions made:
 Consumption expenditure should be calculated based on calorie consumption as used by the
Alagh Committee.
 State specific poverty lines should be constructed and these should be updated using the
Consumer Price Index of Industrial Workers (CPI-IW) in urban areas and Consumer Price Index of
Agricultural Labour (CPI-AL) in rural areas.
 The fallout of the Lakdawala formula was that number of people below the poverty line got
almost double. The number of people below the poverty line was 16 per cent of the population
in 1993-94. Under the Lakdawala calculation, it became 36.3 per cent.
 Tendulkar Committee (2005):

 The major changes recommended are:
 It adopted Mixed Reference Period in place of Uniform Reference Period. During previous
methodologies, a ‘uniform reference period’ was used that included 30 days just before the
survey for all food and nonfood items. But Tendulkar group changed ‘reference period’ to past
one year for 5 nonfood items viz., clothing, footwear, durable goods, education and institutional
medical expenses. For other items 30 days reference period was retained. This is called ‘Mixed
reference period’.
 A shift away from calorie consumption based poverty estimation.
 A uniform poverty line basket (PLB) across rural and urban India.
 A change in the price adjustment procedure to correct spatial and temporal issues with price
adjustment.
 Incorporation of private expenditure on health and education while estimating poverty.
 Poverty line was in form of ‘Rs per capita per month’.
 The Committee computed new poverty lines for rural and urban areas of each state.

The following table outlines the manner in which the percentage of population below the poverty line
changed after the application of the Tendulkar Committee’s methodology. (For the year 2004-05)
 Rangarajan Committee:
C Rangarajan Committee Was Set up By Planning commission in 2012 and submitted report in 2014.
To understand the recommendations of Rangarajan Committee better, we will study the differences
between the recommendations of Tendulkar Committee and Rangarajan Committee.
The other differences are:
The 2nd column represents the data for Tendulkar Committee and The 3rd column the data for Rangarajan
Committee:

Important points from the report are:
 The Rangarajan committee estimation is based on an independent large survey of households by

Center for Monitoring Indian Economy (CMIE).
 Instead of ‘Mixed reference Period’ it recommended ‘Modified Mixed reference period’ in
which reference periods for different items were taken as : 365-days for clothing, footwear,
education, institutional medical care, and durable goods, 7-days for edible oil, egg, fish and
meat, vegetables, fruits, spices, beverages, refreshments, processed food, pan, tobacco and
intoxicants, and 30-days for the remaining food items, fuel and light, miscellaneous goods and
services including non-institutional medical; rents and taxes.
 It not only takes normative levels for adequate nourishment, clothing, house rent, conveyance
and education, but also considers behaviourally-levels of other non-food expenses.

 The committee has estimated that almost 30 per cent of us were poor in 2011-12.It uses
separate data sets for rural and urban parts.
 The panel computed the average requirements of calories, proteins and fats on the norms set by
the Indian Council for Medical Research in 2010.
Thus, as per the Rangarajan Committee, the percentage of poor (people below the poverty line) was
29.5% compared to 21.9% as per Tendulkar Committee. In other words, the Rangarajan report has added
93.7 million more to the list of the poor assessed last year as per the Suresh Tendulkar committee
formula. Now the total number of poor has reached 363 million from 269 million in 2011-12.
 The way forward:
NITI Aayog, the government’s premier think-tank, has finally decided that the country needs a freshly
defined poverty line to help track the success and outreach of its poverty alleviation measures. It will
soon set up an expert committee to narrowly look at the poverty line issue only, as most states are
politically not in sync with each other.
 World Bank’s Poverty line
 The approach of poverty estimation by the World Bank is similar to that employed in India and
in most of the developing countries. The World Bank estimates of poverty are based on the
poverty line of US $1.25 per person per day measured at 2005 international price and adjusted
to local currency using PPP (Purchasing Power Parity).
 In October 2015, the World Bank updated the international poverty line to $1.90 a day. The
new figure of $1.90 is based on ICP purchasing power parity (PPP) calculations and represents
the international equivalent of what $1.90 could buy in the US in 2011. The new IPL replaces
the $1.25 per day figure, which used 2005 data.
World Bank Poverty Line for India:

Recently World Bank estimation shows that the country’s poverty rate has been
reduced from 21.9 per cent to 12.4 per cent for 2011-12. The World Bank data shows that
India is overestimating while counting the number of poor.
 Poverty in India: Important facts and statistics:

1. Reduction in poverty from 1994 to 2012:

India has made tremendous progress in reducing absolute poverty in the past two decades. The
standard way to determine whether a household is poor is to compare its daily expenditure per capita
to a minimum consumption threshold, or poverty line. Based on India’s official line, the share of the
population living in poverty was halved between 1994 and 2012, falling from 45 percent to 22 percent.
During this period, an astonishing 133 million people were lifted out of poverty.
2. Pace of Poverty reduction:
The pace of poverty reduction accelerated over time and was three times faster between 2005 and
2012 - the years for which the latest set of government data are available - than in the previous
decade. At this pace, the fall in extreme poverty in India since 2005, pegged at $1.90 a day, 2011 PPP,
matched or exceeded the average rate of decline for the developing world as a whole and the middle-
income countries as a group.
3. Distribution of poverty in India:
Poverty is closely inter-twined with geography. It is worth noting that in 2012, three large lower income
states alone (Uttar Pradesh, Bihar and Madhya Pradesh) accounted for 44 percent of India’s poor.
4. Individuals transition into and out of poverty:

 We focus on how households transitioned into and out of poverty between 2005 and 2012 - the
years for which the latest set of government data are available.
 In 2005, 37 percent of individuals in India were poor. By 2012, this had fallen to only one in five.
In other words, roughly 15 percent of the population that was poor in 2005 was no longer poor
by 2012. It is, however, plausible that while some individuals escaped poverty, others fell into it.
 The good news is that upward mobility has been the dominant trend. As one would expect, more
people have moved up – out of poverty – than the other way around. Nearly one-third of all
households changed their poverty status between 2005 and 2012; this includes 27 percent who
moved out of poverty and 7 percent who fell into it.
5. Distribution of Poverty among various castes:

 Global Hunger Index:
India has been ranked low 97th among the 118 countries surveyed in 2016 Global Hunger Index
(GHI). In 2016 GHI, India has scored low 28.5 on a 0-100 point scale of the index. It describes India’s
hunger situation as “serious. The International Food Policy Research Institute (IFPRI) makes the
annual calculations of GHI. Basing its readings on the most recent data, the 2016 GHI for India was
derived from the fact that an estimated 15% population is undernourished, lacking in adequate
food intake, both in quantity and quality.
 Povert Alleviation programmes:
As part of this section, the following Poverty Alleviation schemes/programmes will be discussed:
 National Food Security Act
 Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA)
 Deen Dayal Antyodaya Yojana (DAY)
 National Social Assistance Programme
 Prime Minister’s Rural Development Fellowship
 Rural Self Employment Training Institutes
 Pradhan Mantri Garib Kalyan Yojana
 Pradhan Mantri Jan Dhan Yojana
 Direct Benefit Transfer
 National Food Security Act
The National Food Security Act, 2013 was notified on 10th September, 2013
Objective: To provide for food and nutritional security in human life cycle approach, by ensuring access
to adequate quantity of quality food at affordable prices to people to live a life with dignity.
Salient Features of the Act:
 The Act provides for coverage of upto 75% of the rural population and upto 50% of the urban
population for receiving subsidized food grains under Targeted Public Distribution System (TPDS),
thus covering about two-thirds of the population. Of these, at least 46 percent of the rural and
28 percent of the urban population will be designated as priority households. The rest will be
designated as general households.
 The eligible persons will be entitled to receive 5 Kgs of food grains per person per month at
subsidized prices of Rs. 3/2/1 per Kg for rice/wheat/coarse grains.
 The eldest women of the household of age 18 years or above will be the head of the household
for the purpose of issuing ration cards. Children upto 14 years of age will be entitled to nutritious
meals as per the prescribed nutritional standards.
 Besides meal to pregnant women and lactating mothers during pregnancy and six months after
the child birth, such women will also be entitled to receive maternity benefit of not less than Rs.
6,000. It is however restricted to two children only.
 In case of non-supply of entitled food grains or meals, the beneficiaries will receive food security
allowance.
 Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA)

The National Rural Employment Guarantee Act, (NREGA) was notified on September 7, 2005.
The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), also known as Mahatma
Gandhi National Rural Employment Guarantee Scheme (MNREGS) is Indian legislation enacted on
August 25, 2005. The Ministry of Rural Development (MRD), Govt of India is monitoring the entire
implementation of this scheme in association with state governments
Objective: The MGNREGA provides a legal guarantee for one hundred days of employment in every
financial year to adult members of any rural household willing to do public work-related unskilled
manual work at the statutory minimum wage, thus enhancing livelihood security.

Coverage: Thus MGNREGA covers the entire country with the exception of districts that have a hundred
percent urban population.
 Deen Dayal Antyodaya Yojana (DAY)

The scheme is integration of the National Urban Livelihoods Mission (NULM) and National Rural
Livelihoods Mission (NRLM). (In November 2015, the schemes were merged to form DAY).
The scheme has two component one for urban India and other for rural India.
The Urban component Deen Dayal Antyodaya Yojana – NULM will be implemented by the Ministry of
Housing and Urban Affairs.
The rural component Deen Dayal Antyodaya Yojana – NULM will be implemented by the Ministry of
Rural Development.
Mission of DAY-NULM:
To reduce poverty and vulnerability of the urban poor households by enabling them to access gainful
self employment and skilled wage employment opportunities, resulting in an appreciable improvement
in their livelihoods on a sustainable basis, through building strong grassroots level.
Highlights of the scheme:
 Employment through Skill Training and Placement

 Social Mobilization and Institution Development - It will be done through formation of Self-Help
Groups (SHG)
 Subsidy to urban poor - An interest subsidy of 5% - 7% for setting up individual micro-enterprises
with a loan of up to 2 lakh and for group enterprises with a loan limit of up to Rs.10 lakhs.
 Shelters for urban homeless
DAY-NRLM:
NRLM focuses on stabilizing and promoting existing livelihood portfolio of the poor through its three
pillars –
1. ‘Vulnerability reduction’ and ‘livelihoods enhancement’ through deepening/enhancing and

expanding existing livelihoods options and tapping new opportunities in farm and non-farm
sectors;
2. ‘Employment’ - building skills for the job market outside; and

3. ‘Enterprises’ - nurturing self-employed and entrepreneurs (for micro-enterprises).
National Rural Livelihoods Project (NRLP)
 NRLP has been designed as a sub-set of NRLM to create ‘proof of concept’, build capacities of the
Centre and States and create an enabling environment to facilitate all States and Union
Territories to transit to the NRLM.
 NRLP would be implemented in 13 high poverty states accounting for about 90 percent of the
rural poor in the country.
 Intensive livelihood investments would be made by the NRLP in 107 districts and 422 blocks of
13 states (Assam, Bihar, Chhattisgarh, Jharkhand, Gujarat, Maharashtra, Madhya Pradesh, Orissa,
Rajasthan, Uttar Pradesh, West Bengal, Karnataka and Tamil Nadu).
 National Social Assistance Programme (NSAP)

NSAP was launched on 15th August, 1995.
Objective of NSAP: National Social Assistance Programme is a social security and welfare programme to
provide support to aged persons, widows, disabled persons and bereaved families on death of primary
bread winner, belonging to below poverty line households.
Components of NSAP
Presently NSAP comprises of five schemes, namely –

1. Indira Gandhi National Old Age Pension Scheme (IGNOAPS),
2. Indira Gandhi National Widow Pension Scheme (IGNWPS),
3. Indira Gandhi National Disability Pension Scheme (IGNDPS),
4. National Family Benefit Scheme NFBS and
5. Annapurna.
Eligibility and scale of assistance: For getting benefits under NSAP the applicant must belong to a Below
Poverty Line (BPL) family according to the criteria prescribed by the Govt. of India.
Salient Features of each of the components:
Indira Gandhi National Old Age Pension Scheme (IGNOAPS):
The eligible age for IGNOAPS is 60 years. The pension is Rs.200 p.m. for persons between 60 years and
79 years. For persons who are 80 years and above the pension is Rs.500/ - per month.
Indira Gandhi National Widow Pension Scheme (IGNWPS):

The eligible age is 40 years and the pension is Rs.300 per month. After attaining the age of 80 years, the
beneficiary will get Rs.500/ - per month.
Indira Gandhi National Disability Pension Scheme (IGNDPS):
The eligible age for the pensioner is 18 years and above and the disability level has to be 80%. The
amount is Rs.300 per month and after attaining the age of 80 years, the beneficiary will get Rs 500/ - per
month. Dwarfs will also be an eligible category for this pension.
National Family Benefit Scheme (NFBS):
Rs. 20000/ - will be given as a lumpsum assistance to the bereaved household in the event of death of
the bread - winner. It is clarified that any event of death (natural or otherwise) would make the family
eligible for assistance. A woman in the family, who is a home maker, is also considered as a ‘bread -
winner’ for this purpose.
Annapurna Scheme:
10 kgs of food grains (wheat or rice) is given per month per beneficiary. The scheme aims at providing
food security to meet the requirements of those eligible old aged persons who have remained
uncovered under the IGNOAPS.
 Prime Minister’s Rural Development Fellowship

The Prime Minister's Rural Development Fellowship (PMRDF) is an initiative of the Ministry of Rural
Development (MoRD) Government of India (GoI), implemented in collaboration with State
Governments.
Objective:
The PMRD Fellowship is anchored in the twin goals of providing short-term catalytic support to the
district administration in underdeveloped, isolated and remote areas of the country to improve
programme delivery and interface with the marginalized sections of the population, as well as
developing a cadre of committed and competent development leaders and facilitators, who are
available as a resource for rural development over the long term.
Role of Prime Minister’s Rural Development Fellows
To begin with, the Fellows would need to spend time and effort in understanding the historical, geo-
physical, agro - ecological, social and economic contexts of the district. The duration of Fellowship under

the PMRDF shall be for a total period of two years and shall include an orientation period not exceeding
three months.
 Rural Self Employment Training Institutes

Objective: To promote self employment for the unemployed rural youth, particularly those below the
poverty line and to provide periodic skill up gradation to keep them abreast of latest technologies.
Background:
With the aim of mitigating the unemployment problem among the youth, a new initiative was tried
jointly by Sri Dharmasthala Manjunatheshwara Educational Trust, Syndicate Bank and Canara Bank in
1982 which was the setting up of the “RURAL DEVELOPMENT AND SELF EMPLOYMENT TRAINING
INSTITUTE” with its acronym RUDSETI near Dharmasthala in Karnataka.
Several centres of the RUDSETI are already operating successfully now under an initiative of Ministry of
Rural Development. Each RSETI offers about 30 to 40 Skill Development Programmes in a financial year
in various avenues. All the programmes are of short duration ranging preferably from 1 to 6 weeks.
 Pradhan Mantri Garib Kalyan Yojana (PMGKY)

 The Pradhan Mantri Garib Kalyan Yojana (PMGKY) notified along with other provisions of
Taxation Laws (Second Amendment) Act, 2016 came into effect from 17 December 2016. It will
remain open until March 31, 2017.
 PMGKY is Union Government’s second income disclosure scheme (IDS) to allow tax evaders to
come clean with unaccounted wealth. It provides for 50 per cent tax and surcharge on
declarations of unaccounted cash deposited in banks.
 Declarant of undisclosed income needs to pay 30% tax, 10% penalty and 33% Pradhan Mantri
Garib Kalyan Cess on the tax, all of which add up to around 50%.
 Besides, declarant must make mandatory deposit of 25% of undisclosed income in the zero-
interest Pradhan Mantri Garib Kalyan Deposit Scheme, 2016 with lock-in period of 4 years.
 Pradhan Mantri Jan-Dhan Yojana:
 Pradhan Mantri Jan Dhan Yojana (PMJDY) or National Mission for Financial Inclusion was
launched on 28 August 2014 to ensure affordable access to financial services viz. Bank
accounts, remittance, credit, insurance and pension.
 This scheme was launched to provide basic banking accounts to 7.5 crore unbanked people with
RuPay debit card and overdraft facility (after six months).

6 pillars of PMJDY:
PMJDY to be executed in the Mission Mode envisages provision of affordable financial services to all
citizens within a reasonable distance. It comprises of the following six pillars:
The first three are to be implemented from (15th August, 2014-14th August, 2015) and the next three
from (15th August 2015-15th August, 2018).
Six pillars of the scheme are:
1. Universal access to banking facilities:
2. Providing Basic Banking Accounts with overdraft facility and RuPay Debit card to all
households:
3. Financial Literacy Programme
4. Creation of Credit Guarantee Fund
5. Micro-insurance
6. Unorganized sector Pension schemes like Swavlamban
Update: As of February, 2017, around 27 crore accounts have been opened under this scheme with
deposits of over Rs.66, 000 crore.
 Direct Benefit Transfer

With the aim of reforming Government delivery system by re-engineering the existing process in welfare
schemes for simpler and faster flow of information/funds and to ensure accurate targeting of the
beneficiaries, de-duplication and reduction of fraud Direct Benefit Transfer (DBT) was started on 1st
January, 2013.
With the rapid rollout of Aadhaar in the country, it was felt possible to move to a system of transferring
cash benefits directly to the poor.
Categories of schemes covered under DBT
The scope of DBT include all welfare/subsidy schemes operated by all the Ministries/ Departments of
Government of India directly or through implementing agencies, which involve cash / kind benefits'
transfers to individuals.
Key Enablers for DBT

The success of an ambitious and a highly desirable initiative like DBT depends on a set of a few critical
factors. For a heterogeneous and a large country like India, it becomes imperative that these critical
success factors are ensured to achieve smooth rollout of a programme like DBT.
The key success factors or enablers for an efficacious Implementation of DBT would include:
JAM Trninty
Business Correspondents (BC) Infrastructure
Payments Bank
Mobile money
Present status:
Updated: July, 2017
 The government has saved a whopping Rs 57,000 crore with its Direct Benefit Transfer
(DBT) scheme.
 According to government data, of the Rs 57,029 crores saved under DBT in 2016-17, the
LPG subsidy scheme 'Pahal' accounted for Rs 29,769 crores.
 Besides, about Rs 14,000 crores were saved in providing subsidies directly to beneficiaries
under the Public Distribution System.
 The Mahatma Gandhi National Rural Employment Guarantee Scheme, that guarantees 100
days of employment for every rural household, saved Rs 11,741 crores, and Rs 399 crores
were saved in DBT transfers for the National Social Assistance Programme, which deals
with, among other things, old age and widow pensions.
 In 2017-18, the beneficiary base rose from 10.71 crores in 2013-14 to 35.62 crores. A total
of 485 schemes have been identified from 60 ministries for the DBT.
 Budget 2017-18: Some of the key announcements related to the above mentioned schemes in
Budget 2017-18 are as follows:
Mission Antyodaya: Govt will undertake a Mission Antyodaya to bring 1 crore households out
of poverty and to make 50,000 gram panchayats poverty free by 2019, the 150th birthday of Gandhiji.
The mission will work with a focused micro plan for sustainable livelihood for every deprived
household. A composite index for poverty free gram panchayat would be developed to monitor
the progress from the baseline.
MGNREGA: The budget provision of Rs. 38,500 crores under MGNREGA in 2016-17 has been increased
to Rs. 48,000 crores in 2017-18. This is the highest ever allocation for MGNREGA. The initiative to geo-

tag all MGNREGA assets and putting them in public domain has established greater transparency.
Government is also using space technology in a big way to plan MGNREGA
works. Women participation has increased from 48 % to 55 %.
The following are some of the allocations made by the government in Budget 2017-18:
Schemes Funds allocated in the Budget 2017-18
MGNREGA (Mahatma Gandhi National Rural 48,000 crores

Employment Guarantee Act)
National Social Assistance Program (NSAP) 9500 crores
Deendayal Antyodaya 4,500 crores
Yojana- National Rural Livelihood Mission
LPG connection to poor households 2500 crores
 Universal Basic Income:

 India is looking at a radical idea for reducing poverty: free money for everyone—no strings
attached!
 The Ministry of Finance’s annual survey of the economy, explores how the country might replace
its various welfare programs with a universal basic income, or a uniform stipend paid to every
adult and child, poor or rich.
Why Does India need UBI?

 In India, the idea is especially appealing because of the weakness of existing welfare programs,
which largely take the form of subsidies paid to sellers of grain, fuel, fertilizer and other
essentials.
 By making everyone eligible, a universal basic income obviates the messy task of identifying
who is and who isn’t in need of assistance.
 And by paying money directly into bank accounts, it would allow India to do away with the vast
administrative machinery currently needed to supply the poor with cheap wheat, rice and
other goods.
 Conclusion: India is on its path to great economic development. But it is very important that it
takes everyone along in this development. It becomes very important to improve the quality of
life for its 1.2 billion citizens and lay the foundations for a truly prosperous future–a future that
will impact the country and its people for generations to come.

WorkSheet

2. True /False
3. MCQs
4. Match the column
Happy Learning!!!

Summary Sheet
ESI- Employment
Important Points
videos and notes
Mock Test

 Employment Generation in India: Why is it important?
To understand the importance of employment, we need to have an idea about the working age
population of India. India’s working age population (15-64 years) is now 63.4% of the total, as against
just short of 60% in 2001. This poses a formidable challenge and a huge opportunity. To reap this
demographic dividend which is expected to last for next 25 years, India needs to equip its workforce
with employable skills and knowledge so that they can contribute substantively to the economic growth
of the country.
(Source: The office of the Registrar General of India and Census Commissioner had released ‘single year
age data’ for the 2011 Census, which refers to the number of people at each year of age in the
population).
Working Age Population:

The working age population is defined as those aged 15 to 64. The basic indicator for employment is
the proportion of the working age population aged 15-64 who are employed.
Demographic Dividend:
Demographic Dividend refers to a demographically linked economic boost caused by a rise in the
working age population (15-59 years or in some cases 15-64 years) and consequent drop in
the dependency ratio. A country is expected to reap the demographic dividend when share of its
working population is larger than share of its non-working population. India is currently going through
a phase of demographic dividend.
Dependency Ratio:
Dependency ratio refers to the ratio of persons of ages under 15 years and over 64 years to the
persons of ages 15-64 years. The persons below 15 years and above 64 years are defined dependent
while persons between 15-64 years age are defined as economically productive.
 Types of Unemployment in India:
Unemployment:
Unemployment may be defined as “a situation in which the person is capable of working both
physically and mentally at the existing wage rate, but does not get a job to work”.
In other words unemployment means only involuntary unemployment wherein a person who is willing
to work at the existing wage rate does not get a job.

Open Unemployment: Open unemployment is a situation where in a large section of the labour force
does not get a job that may yield them regular income. They are able to work and are also willing to
work but there is no work for them. This type of unemployment can be seen and counted in terms of
the number of unemployed persons. Hence it is called open unemployment.
Structural Unemployment: It occurs due to structural changes in the economy. Structural changes can
be due to change in technology (from labour intensive technology to capital intensive technology) or
change in the pattern of demand. In a developing country like India, structural unemployment exists
both in the rural and the urban areas.
Frictional Unemployment: It occurs when a worker is shifting from one job to the other. During the
mobility period, he may unemployed for some time. It is a temporary phenomenon. In other words,
Frictional unemployment is the time period between jobs when a worker is searching for, or
transitioning from one job to another.
Cyclical Unemployment: It occurs because of cyclical fluctuations in the economy. Phases of boom,
recession, depression and recovery are typical characteristics of a capitalist economy. In boom phase,
high level of economic activity results in high level of employment whereas recession and depression
phases marked with low demand results in more unemployment and during the recovery phase
unemployment is slowly reduced.
Under-employment: It is a situation under which employed people are contributing to production less
than they are capable of. It can be in terms of time (visible under-employment) or type of work (invisible
under-employment). Part-time workers come under this category.
Disguised Unemployment: A disguisedly unemployed person is the one who seems to be employed but
actually he is not. His contribution to the total output is zero or negligible. When more people are
engaged in a job than actually required, a state of disguised unemployment is created. It is mostly seen
in rural areas.
Seasonal Unemployment: It occurs only during seasonal months of the year. In India, it is very common
in agriculture sector. In certain type of industries also this type of unemployment is found.
Casual Unemployment: In industries such as building construction, catering or agriculture, where

workers are employed on a day- to-day basis, there are chances of casual unemployment occurring due
to short-term contracts, which are terminable any time.

Chronic Unemployment: When unemployment tends to be a long-term feature of a country it is called
“chronic unemployment. Underdeveloped countries suffer from chronic unemployment on account of
the vicious circle of poverty.
 Measurement of Unemployment:
There are three measures or estimates of unemployment. These are developed by National Sample
Survey Organization (NSSO).
Usual Status Unemployment: Also known as open unemployment or chronic unemployment. This
measure estimates the number of persons who remained unemployed for a major part of the year. This
measure gives the lowest estimates of unemployment.
Labour force:
 Labor force (also called work force) is the total number of people employed or seeking
employment in a country or region. (Thus labour force constitutes of both employed and
unemployed).
 One is classified as ‘not in labour force’; if he or she was engaged in relatively longer period in
any one of the non-gainful activities or we can say those who are neither seeking nor available
for work.
Weekly Status Unemployment: The estimate measures unemployment with respect to one week. In
other words according to this estimate a person is said to be employed for the week even if he/she is
employed only for a day during that week.
Current Daily Status Unemployment: It considers the activity status of a person for each day of the
preceding seven days. The reference period here is a day. If a person did not find work on a day or some
days during the survey week, he/she is regarded as unemployed. Normally if a person works for four
hours or more during a day, he or she is considered as employed for the whole day.
 What is the status of employment in India?

 Scenario of Employment Growth:
 As per the National Sample Survey Office (NSSO) data during 1999-2000 to 2004-05, employment
on usual status (US) basis increased by 59.9 million persons from 398.0 million to 457.9 million
as against the increase in labour force by 62.0 million persons from 407.0 million to 469.0 million.
 After a period of slow progress during 2004-05 to 2009-10, employment generation picked up
during 2009-10 to 2011- 12, adding 13.9 million persons to the workforce, but not keeping pace
with the increase in labour force (14.9 million persons).
 Structural changes: There have also been structural changes for the first time, the share of the
primary sector in total employment has dipped below the halfway mark (declined from 58.5 per
cent in 2004-05 to 48.9 per cent in 2011-12), while employment in the secondary and tertiary
sectors increased to 24.3 per cent and 26.8 per cent respectively in 2011-12 from 18.1 per cent
and 23.4 per cent respectively in 2004-05.
 Self employment: Self employment continues to dominate, with a 52.2 per cent share in total
employment.
 What is critical is the significant share of workers engaged in low-income generating activities.
There are other issues of concern like poor employment growth in rural areas, particularly among
females.
 Data from the Census, 2011:

 Unemployment grew faster for illiterates than for literates:
Based on the data of the Census, 2011, the following observations can be made:
 Of the 116 million Indians who were either seeking or available for work, 32 million were illiterate
and 84 literate.
 Among literates, unemployment rates were higher among the better qualified, highest of all
among the 7.2 million people with a technical diploma or certificate other than a degree.
 At all levels of education, unemployment rates were higher in rural than in urban areas. At every
level of education, especially at the higher levels, female unemployment exceeded male
unemployment.
 Overall, India’s unemployment rate grew from 6.8 p.c. in 2001 to 9.6 p.c. in 2011, based on official
Census data. Unemployment grew faster for illiterates than for literates.
Unemployment rate:
It is the percent of the labor force that is without work.
Unemployment rate = (Unemployed workers / Total Labour Force) * 100
 Economic Survey 2016-17: What it has to say about the Employment in India:

 Before that we need to know something about the Annual Employment-Unemployment
Survey.
 In order to fill the data gap for ascertaining the Employment-Unemployment Scenario in the
country, Labour Bureau has been entrusted the task of conducting Annual Employment
Unemployment (EUS) Surveys. So far, five annual employment-unemployment surveys have
been conducted by Labour Bureau for the years 2010-11, 2011-12, 2012-13, 2013-14 & 2015-16.
 In the EUS, Labour Force Estimates are derived based on two approaches namely Usual Principal
Status (UPS) Approach and Usual Principal and Subsidiary Status (UPSS) Approach. Accordingly,
Labour Force Participation Rate (LFPR), Worker Population Ratio (WPR) and Unemployment Rate
(UR) based on Usual Principal Status (UPS) approach and Usual Principal and Subsidiary Status
(UPSS) approach for persons aged 15 years & above are estimated on an annual basis.
Labour Force Participation Rate (LFPR):

Labour Force Participation Rate (LFPR) is defined as the number of persons in the labour force per
1000 persons.
Worker Population Ratio (WPR):

Worker Population Ratio (WPR) is defined as the number of persons employed per 1000 persons.
 Important points mentioned in the Economic Survey 2016-17:

 The latest employment and unemployment survey (EUS), 2015-16 estimated labour force
participation rate (LFPR) at all India level based on usual principal status approach was 50.3
percent.
 Comparing LFPR between male and female and across states we find that LFPR of female (23.7
%) is much lower than that of male (75.0 %) with a wide inter-state variation.
 The North-Eastern & Southern states in general have higher female LFPR as compared to
Northern states.
 Survey report also shows that unemployment among female is much higher than male in both
rural and urban areas.

 Considering employment by sector and category there is clear shift of employment from primary
sector to secondary and tertiary sector between the period 2011-12 and 2015-16.
 However, growth in employment by categories reflects increase in casual and contract worker.
 This indicates preference of employers away from regular or formal employment probably
because of unfavourable labour laws.
 The multiplicity of labour laws and difficulty in their compliance has been identified as
impediments to the industrial development and employment generation.
 Share of Employment across Organized –Unorganized Sectors in 2011-12 and 2004-05 (in per
cent): (Source: NITI Aayog)
Year Organized (in %) Unorganized (in %)

2004-05 13 87
2011-12 17.3 82.7
The organized sector is one that is incorporated with the appropriate authority or government and
follows its rules and regulations. On the contrary, the unorganized sector can be understood as the
sector, which is not incorporated with the government and thus, no rules are required to be followed.
While the former is related to business, government, industry involving large-scale operations, the
latter include small scale operation, petty trade, private business, etc.
 The Challenges ahead:
Automation, self-service portals, cost sharing are all dampeners on job creation in the ITeS (Information
Technology Enabled Service) segment. Customers are seeking more productivity and value addition.
While this will require a higher level of skill, it will not result in more new job opportunities. Artificial
Intelligence (AI) is another upcoming area. Positions likely to be demand in the coming years include
data scientists, retail planners, product managers and digital marketers.
 The Way ahead:
India is among the few countries in the world that has a reason to be optimistic. This could be due to
the favourable structural growth story or the presence of a huge demographic dividend or the stability
that is provided by democracy. However, even these assets can only be redeemed if the requisite skills
and capabilities and the right kinds of jobs are available.

The government, on its part, seems to have grasped this change: new 'thrust areas'-such as Digital India,
Skill India, Start UP India and Make in India-all focus on creating an ecosystem that will generate jobs.
 Schemes for Employment Generation (including social security schemes) and Skill
Development:
 Aam Admi Bima Yojana
Aam Aadmi Bima Yojana is a Social Security Scheme for rural landless household. It was launched on 2nd
October, 2007. Under this scheme the head of the family or one earning member in the family of such
a household is covered.
Premium: The premium of Rs.200/- per person per annum is shared equally by the Central Government
and the State Government, so the insured person has to pay no premium.
Eligibility: The member to be covered should be aged between 18 and 59 years.
 Pandit Deendayal Upadhyay Shramev Jayate Karyakram
The Pandit Deendayal Upadhyay Shramev Jayate Karyakram was launched in October 2014 by
Government of India.
Objective: To create conducive environment for industrial development and doing business with ease
and also expanding government support to impart skill training for workers.

This is an umbrella scheme with five schemes under it as follows:
A dedicated Shram Suvidha Portal: That would allot Labour Identification Number (LIN) to nearly 6
lakhs units and allow them to file online compliance for 16 out of 44 labour laws
An all-new Random Inspection Scheme: Utilizing technology to eliminate human discretion in

selection of units for Inspection, and uploading of Inspection Reports within 72 hours of inspection
mandatory
Universal Account Number: Enables 4.17 crore employees to have their Provident Fund account
portable, hassle-free and universally accessible
Apprentice Protsahan Yojana: Will support manufacturing units mainly and other establishments by
reimbursing 50% of the stipend paid to apprentices during first two years of their training
Revamped Rashtriya Swasthya Bima Yojana: Introducing a Smart Card for the workers in the
unorganized sector seeded with details of two more social security schemes. In pursuance of a recent
policy decision of the Government, the Labour and Employment Ministry is handing over the RSBY
scheme to the Ministry of Health and Family Welfare with effect from 1st April 2015.
 Pradhan Mantri Rojgar Protsahan Yojana

 The Pradhan Mantri Rojgar Protsahan Yojana (PMRPY) is a scheme to incentivize employers
registered with the Employees' Provident Fund Organisation (EPFO) for job creation by the
Government paying the 8.33% contribution of employers to the Employee Pension Scheme (EPS)
in respect of new employees having a new Universal Account Number (UAN) for the first three
years of their employment and is proposed to be made applicable for unemployed persons that
are semi-skilled and unskilled.
 The scheme is being implemented by the Ministry of Labour and Employment and is operational
since August, 2016. Thus, all new eligible employees will be covered under the PMRPY Scheme
till 2019 - 20.
 For the textile (apparel) sector, the Government will also be paying the 3.67% Employees
Provident Fund (EPF) contribution of the eligible employer for these new employees.
 NPS Swavalamban (National Pension Scheme – Swavalamban)
The scheme is applicable for all citizens of India (age group of 18-60 years) in the unorganized sector,
person will be deemed to belong to the unorganized sector if that person is not in regular employment
of the Central or a state government, or an autonomous body/ public sector undertaking of the Central
or state government having employer assisted retirement benefit scheme, are not covered by a social
security scheme under any of the following laws:
 Employees' Provident Fund and Miscellaneous Provisions Act,1952

 The Coal Mines Provident Fund and Miscellaneous Provisions Act,1948
 The Seamen's Provident Fund Act, 1966
 The Assam Tea Plantations Provident Fund and Pension Fund Scheme Act 1955
 The Jammu and Kashmir Employees' Provident Fund Act, 1961
 The scheme will be applicable to all persons in the unorganized sector subject to the condition
that the benefit of Central Government contribution will be available only to those persons
whose contribution to NPS is minimum Rs.1,000 and maximum Rs. 12,000 per annum, for both
Tier I and II taken together, provided that the person makes a minimum contribution of Rs. 1000
per annum to his Tier I NPS account.
 Startup India
On 16 January, 2016, Union Government has launched a “Start-up India” action plan to give boost to the
Start-up India Movement. India is now the world’s fastest growing and the third largest start-up
ecosystem. As per the newly launched plan, the Start-ups in India will get a head start on the back of a
19 point action plan.
These 19 action plans can be divided into four categories viz. Simple Rules, Processes and Compliance, Tax
sops, Funding Support and other actions.
 Simple Rules, Processes and Compliance
Compliance regime based on self-certification: To keep the compliance cost low and to allow the start-
ups to focus on their core business, they are allowed to self-certify their compliance with respect to 9
labour and environment laws. With respect to labour laws, Start-ups are exempted from inspection by
authorities for 3 years.
Mobile app and portal: A start-up would be allowed to set up by just filing a form through a mobile app
and online portal.
Faster patent examination: Start-ups will be provided an 80% rebate in filing of patents in comparison
to other companies. The scheme for Start-up Intellectual Property Protection (SIPP) shall facilitate filing
of Patents, Trademarks and Designs by innovative Start-ups.

Faster exits: The Insolvency and Bankruptcy Code 2016 will provide faster process of winding up of
business within a period of 90 days.
Relaxed norms of public procurement: Government procurements often require ‘prior experience’.
Such rules restrict the start-ups from participating in such tenders. To promote the start-ups, they will
be given exemptions from conditions such as ‘prior experience’ or ‘prior turnover’ without any
relaxation in quality standards.
 Tax Sops
Tax exemption on capital gains: To encourage the flow of investments into start-ups, tax exemptions
shall be given to the persons on their capital gains, if such capital gains are invested in the Fund of Funds
recognized by the government.
Tax exemption for 3 years: To facilitate the growth of Start-ups in India through a competitive platform,
the profits of start-ups are given exemption for a 3 year period from income tax. The exemption shall be
available subject to non-distribution of dividend by the Start-up.
 Funding Support
Rs. 10,000-crore fund of funds: To provide funding support to start-ups, a fund will be set up by the
government with an initial corpus of 2,500 crore rupees and a total of 10,000 crore rupees over next
four years. The fund will be act as a Fund of Funds (FoF) i.e. it will not be invested directly in start-ups,
but it will participate in the capital of the SEBI registered venture funds.
Credit Guarantee Fund: To encourage debt funding to start-ups, a credit guarantee mechanism through
National Credit Guarantee Trust Company (NCGTC) is being envisaged with a budgetary Corpus of INR
500 crore per year for the next four years. The loan will be secured by National Credit Guarantee Trustee
Company Ltd. (NCGTC) through a credit guarantee scheme for which Department of Financial Services
will be key agency.
 Other Initiatives
Atal Innovation Mission: The Atal Innovation Mission (AIM) will have two core functions viz.
entrepreneurship promotion through Self-Employment and Talent Utilization (SETU), wherein
innovators would be supported and mentored to become successful entrepreneurs, and innovation
promotion to provide a platform where innovative ideas are generated.

Innovation centres at National Institutes: The government will set up 35 new incubators, 31 innovation
centres at national institutes. Seven new research parks – six in IITs and one in IISc shall be set up by
government with an initial investment of Rs.100 crore each.
Biotechnology Boost: Five new bio clusters, 50 new bio incubators, 150 technology transfer offices and
20 bio connect offices will be established.
NIDHI: The National Initiative for Developing and Harnessing Innovations is a grand challenge
programme to support and award 10 lakh rupees to 20 student innovations from Innovation and
Entrepreneurship Development Centres (IEDCs).
Uchhattar Avishkar Yojana: It is a joint programme of Ministry of HRD and Department of Science and
Technology that aimed at fostering ‘very high quality’ research among IIT students. The scheme will
make a bridge between the academics and the practical working on field.
 National Skill Development Mission
The National Skill Development Mission launched by the Ministry of Skill Development and
Entrepreneurship on July 15, 2015, aims to create convergence across sectors and States in terms of skill
training activities.
Mission Statement
To rapidly scale up skill development efforts in India, by creating an end-to-end, outcome-focused
implementation framework, which aligns demands of the employers for a well-trained skilled
workforce with aspirations of Indian citizens for sustainable livelihoods.
Mission Strategy: National Skill Development Mission will initially consist of seven sub-missions under
its purview. Each sub-mission will act as a building block for achieving the overall objectives of the
Mission.
Sub-missions:
Seven sub-missions have been proposed initially to act as building blocks for achieving overall.
Objectives of the Mission:
They are: (i) Institutional Training, (ii) Infrastructure, (iii) Convergence, (iv) Trainers, (v) Overseas
Employment, (vi) Sustainable Livelihoods, (vii) Leveraging Public Infrastructure.
Financing: The implementation of skilling activities under the Mission will be as per the budget
provisions of various schemes under their respective heads of account. The administrative expenses of
the Mission will be borne from the budget of Ministry of Skill Development and Entrepreneurship.
 Deen Dayal Upadhyaya Grameen Kaushalya Yojana
The Ministry of Rural Development implements DDU-GKY to drive this national agenda for inclusive
growth, by developing skills and productive capacity of the rural youth from poor families. It was
launched in September, 2014.
Features
 Enable Poor and Marginalized to Access Benefits: Demand led skill training at no cost to the rural
poor
 Inclusive Program Design: Mandatory coverage of socially disadvantaged groups (SC/ST 50%;
Minority 15%; Women 33%)
 Shifting Emphasis from Training to Career Progression: Pioneers in providing incentives for job
retention, career progression and foreign placements
 Greater Support for Placed Candidates: Post-placement support, migration support and alumni
network
 Proactive Approach to Build Placement Partnerships: Guaranteed Placement for at least 75%
trained candidates
 Enhancing the Capacity of Implementation Partners: Nurturing new training service providers
and developing their skills
 Regional Focus: Greater emphasis on projects for poor rural youth in Jammu and Kashmir
(HIMAYAT). In the North-East region and 27 Left-Wing Extremist (LWE) districts it is named as
ROSHINI.
 Standards-led Delivery: All program activities are subject to Standard Operating Procedures that
are not open to interpretation by local inspectors. All inspections are supported by geo-tagged,
time stamped videos/photographs.
Eligibility: Rural Youth: 15 - 35 Yrs and SC/ST/Women/PCTG/PWD: upto 45 Yrs
Implementation Model: DDU-GKY follows a 3-tier implementation model. The DDU-GKY National Unit
at MoRD functions as the policy-making, technical support and facilitation agency. The DDU-GKY State
Missions provide implementation support; and the Project Implementing Agencies (PIAs) implement the
programme through skilling and placement projects.
 Make In India Scheme:

In order to make India a manufacturing hub, PM Narendra Modi launched the Make In India Campaign
at Vigyan Bhawan in New Delhi on September 26, 2014. The promotion is intended to appeal foreign
companies to set up their manufacturing units in India and to obtain larger foreign investment.
Achievable Targets
 Target of an increase in manufacturing sector growth to 12-14% per annum over the medium
term.
 An increase in the share of manufacturing in the country’s Gross Domestic Product from 16% to
25% by 2022.
 To create 100 million additional jobs by 2022 in manufacturing sector.
 Creation of appropriate skill sets among rural migrants and the urban poor for inclusive growth.
 An increase in domestic value addition and technological depth in manufacturing.
 Enhancing the global competitiveness of the Indian manufacturing sector.
 Ensuring sustainability of growth, particularly with regard to environment.
 World Bank’s Ease of Doing Business: 2017
Make In India scheme’s progress can be gauged from the World Bank’s Ease of Doing Business Index:
In 2014, India was ranked at 134 (out of 189) nations.
India has been placed at 130th position among the 190 countries in the recently released World Bank’s
ease of doing business index for the year 2017. The index was released as part of the World Bank’s
annual report Doing Business 2017: Equal Opportunity for All. This report had revised India’s rank to
130 from earlier 131st for the year 2016. A higher ranking of country in this list means that its regulatory
environment is more conducive and favourable for the starting and operation of firms.
India Related Facts:
 In the ranking, India has made a substantial improvement in some areas such as electricity
connection. But it has slipped in other areas, including payment of taxes and enforcing contracts.
 India has embarked on a fast-paced reform path and has acknowledged a number of substantial
improvements.
 Some the improvement mentioned are electricity connections to businesses, paying taxes, electronic
system for paying employee state insurance contributions, the Companies (Amendment) Act,
electronic filing of integrated customs declarations, passage of the commercial courts and the
Insolvency and Bankruptcy Code.

 Pradhan Mantri Kaushal Vikas Yojana
The scheme aims to provide skills training for the youth. It is being implemented by Ministry of Skill
Development and Entrepreneurship (through the National Skill Development Corporation) and focuses
on Class 10 and 12 dropouts. It has an initial outlay of Rs.1500 crores.
Salient Features:
The Skill training would be based on the National Skill Qualification Framework (NSQF) and industry led
standards. Under the scheme, a monetary reward is given to trainees on assessment and certification
by third party assessment bodies. The average monetary reward is around Rs.8,000 per trainee. Skill
training would be done on the basis of recent skill gap studies conducted by the NSDC for the period
2013-17.
 Pradhan Mantri Yuva Yojana:

The Union Ministry of Skill Development and Entrepreneurship has launched of Pradhan Mantri Yuva
Yojana (PMYY) to scale up an ecosystem of entrepreneurship for youngsters on 10th November, 2016.
Salient Features: PMYY is MSDE’s flagship scheme on entrepreneurship education and training. The
scheme spans over five years (2016-17 to 2020-21) with a project cost of 499.94 crore rupees. It will
provide entrepreneurship education and training to over 7 lakh students in 5 years through 3,050
institutes.
The institutes under the PMYY include 2,200 institutes of higher learning (colleges, universities, and
premier institutes), 500 ITIs, 300 schools and 50 entrepreneurship development centres through
Massive Open Online Courses (MOOCs).
 PowerTex India Scheme:

Union Textiles Minister, Ms. Smriti Irani launched PowerTex India Scheme on 1st April 2017
at Bhiwandi in Thane district of Maharashtra. It is a gamut of schemes aimed at development of
powerloom sector in India with a special focus on small powerloom weavers.

 Components of PowerTex India Scheme:
 In-situ upgradation scheme of Plain Powerlooms
 Group Workshed Shceme (GWS)
 Yarn Bank Scheme
 Common Facility Centre
 Pradhan Mantri Credit Scheme for Powerloom weavers
 Solar Energy Scheme
 Tax venture Capital Fund
 Financial assistance
 National Career Service (NCS): NCS project is being implemented by the Union Ministry of Labour
and Employment. It was launched in 2015. It is an ICT based portal developed to provide a wide
variety of employment related services to job seekers and youth through technology.
 National Policy on Skill Development and Entrepreneurship

 The National Policy on Skill Development was first formulated in 2009 and it provided the
framework for skill development activities in the country.
 Over the years, changes in the macro environment, and the experience gained through
implementation of various skill development programmes in the country have necessitated
changes in the policy.
 Accordingly, the National Skill Development Policy, 2015 was formulated, and it supercedes the
Policy of 2009.
Vision:
To create an ecosystem of empowerment by Skilling on a large Scale at Speed with high Standards and
to promote a culture of innovation based entrepreneurship which can generate wealth and
employment so as to ensure Sustainable livelihoods for all citizens in the country.
Financing: National Skill Development Fund (NSDF) has been set up by Government of India with the
objective of encouraging skill development in the country. A public Trust set up by Government of India
is the custodian of the Fund. The Fund acts as a receptacle for all donations, contribution in cash or kind
from all contributors (including Government, multilateral organizations, corporations etc) for
furtherance of the objectives of the Fund.
 National Apprenticeship Promotion Scheme:

On July 06, 2016, The Union Cabinet has approved a National Apprenticeship Promotion Scheme (NAPS)
for providing apprenticeship training to over 50 lakh youngsters in order to create more jobs. The
Scheme has an outlay of 10,000 crore rupees and a target of training 50 lakh apprentices by 2019-20.
 Other Schemes:
 Niryat Bandhu Scheme: The objective of the Niryat Bandhu Scheme is to reach out to the new
and potential exporters and mentor them through orientation programmes, counselling sessions,
individual facilitation, etc., for being able to get into international trade and boost exports from
India.
 Nai Manzil: It aims to engage constructively with Poor Minority youth and help them obtain
sustainable and gainful employment opportunities that can facilitate them to be integrated with
mainstream economic activities.
 Nai Roshni: It is a scheme for leadership development among Minority Women. The objective is
to empower and instill confidence among minority women by providing knowledge, tools and
techniques for interacting with Government systems, banks and other institutions at all levels.
 Hunar Haat: Hunar Haat (Skill Haat) is an exhibition of handicrafts, embroidery etc made by the
artisans from the Minority Communities organized by the Ministry of Minority Affairs. They will
be provided free of cost stall, the arrangements for their transport and their daily expenses.
 USTAAD: Upgrading the Skills in Training in Traditional Arts/Crafts for Development (USTAAD) is
a 100% central sector scheme. The scheme aimed at capacity building and updating the
traditional skills of master craftsmen/artisans. These trained master craftsmen/artisans will train
the minority youths in various specific traditional arts/crafts.
 World Youth Skills Day:
World Youth Skills Day that annually falls on July 15 is one of new UN International Days of observance.
It was established by the UN General Assembly on November 11, 2014. Theme for 2017: Skills for All.
Ministry of Skill Development and Entrepreneurship (MSDE) celebrated the second anniversary of Skill
India Mission on the World Youth Skills day. Skill India Mission was launched on this day in July, 2015.
100 GST training centres, 51 Pradhan Mantri Kaushal Kendras and 100 Yoga training centres were
inaugurated on this occasion. Ministry of Skill Development and Entrepreneurship
(MSDE) has announced a national training Programme to certify GST practitioners under its scheme of

Pradhan Mantri Kaushal Vikas Yojana (PMKVY). It would facilitate the country’s transition to the new tax
regime.
Update: July, 2017:
Foundation stone of country’s biggest Global Skill Park laid in Bhopal:

 Union Minister of State for Skill Development and Entrepreneurship Rajeev Pratap Rudy and
MP Chief Minister Shivraj Singh Chouhan has laid the foundation stone of the country’s biggest
Global Skill Park in Bhopal.
 The park will function on the spirit of ‘With Industry -For Industry’.
 Budget 2017-18: The following announcements were made in the Budget 2017-18 with the
motive to increase employment and enhance skill development.
Pradhan Mantri Kaushal Kendras (PMKK) - PMKK have already been promoted in more than 60 districts.
Government now proposes to extend these Kendras to more than 600 districts across the country. 100
India International Skills Center will be established across the country. These centers would
offer advanced training and also courses in foreign languages.
SANKALP - In 2017-18, government also proposes to launch the Skill Acquisition and Knowledge
Awareness for Livelihood Promotion Programme (SANKALP) at a cost of Rs. 4,000 crore. SANKALP will
provide market relevant training to 3.5 crore youth.
STRIVE - The next phase of Skill Strengthening for Industrial Value Enhancement (STRIVE) will also be
launched in 2017-18 at a cost of Rs. 2,200 crores. It will focus on improving the quality and market
relevance of vocational training provided in ITIs and strengthen the apprenticeship
programmes through industry cluster approach.
Work Sheets

2. True /False
3. MCQs
4. Match the column

Happy Learning!!!

Summary Sheet
ESI- Health
Important Points
videos and notes
Mock Test

 Health: What is it? The term ‘health’ is a positive and dynamic concept. In common parlance,
health implies absence of disease. The World Health Organization (WHO) has defined health as:
“a state of complete physical, mental and social well-being and not merely the absence of disease
or illness or infirmity”.
 Health: A State Subject: Health is a State Subject in India. That is, it is mentioned in the State List
of the Seventh Schedule of the Indian Constitution.
 Health Care in India: India's health challenges are diverse. Communicable diseases, notably
Tuberculosis and Malaria, continue to constitute a major part of the country's disease burden. At
the same time the threat of Non-communicable Disease (NCD) including diabetes, hypertension,
cancer and mental illness is clearly perceived. It is also crucially relevant that maternal and infant
mortality continue to remain unacceptably high in several parts of the country.
 Maternal Health Care: Maternal health care is a rather wide term. Often, the term is confused
with only the period of time, when the women gives birth to the child. However maternal health
care is a concept that encompasses family planning, preconception, prenatal (antenatal) and
postnatal care.
We can understand how India is making advances in various parameters related to maternal
healthcare better by going through data that is brought out by the National Family Health survey – 4
(NFHS – 4), 2015-16.
 Some of the key findings of the NFHS – 4 are:
Antenatal Care (ANC):
 NFHS-4 findings reveal that there is better care for women during pregnancy and childbirth -
contributing to reduction of maternal deaths and improved child survival.
 Almost all mothers have received antenatal care for their most recent pregnancy and increasing
numbers of women are receiving the recommended four or more visits by the service providers.
 The number of pregnant women receiving more than 4 ANC visits has also gone up by 38.37% in
the last decade, from 37% in NFHS-3 to 51.2% in NFHS-4.
 States which have shown remarkable improvement in providing ANC to pregnant women are
Uttar Pradesh, Chhattisgarh, Assam, West Bengal, Odisha, Jharkhand and Rajasthan, although in
terms of absolute values, the percentage of women receiving ANC continues to remain low. ANC
visits have gone down in Uttarakhand, Tamil Nadu, Goa and Kerala over the last decade.

Total Fertility Rate (TFR): Overall, the Total Fertility Rate (TFR) or the average number of children per
woman has also gone down from 2.7 in NFHS-3 to 2.2 in NFHS-4.
Institutional births:
 More and more women now give birth in health care facilities and rates have more than doubled
in the last decade in some States like Chhattisgarh (by as much as 390%), Jharkhand (by 238%),
Uttar Pradesh (by 229%), Bihar (by 220%), Assam (by 215%), Madhya Pradesh (by 208%) and
Rajasthan (by 183%).
 However, in terms of absolute values, institutional births continues to remain extremely low in
Nagaland (32.8%), Meghalaya (51.4%), Arunachal Pradesh (52.3%), Jharkhand (61.9%) and Bihar
(63.8%), which are the bottom five states with respect to institutional births.

Maternal Death: Maternal death is defined as death of women while pregnant or within 42 days of
termination of pregnancy from any cause related to or aggravated by pregnancy or its management. The
maternal mortality ratio is maternal death per 100,000 live births in one year.
 Globally, about 800 women die every day of preventable causes related to pregnancy and
childbirth; 20 per cent of these women are from India.
 Annually, it is estimated that 55,000 women die due to preventable pregnancy-related causes in
India.
 But there is a ray of hope as the Maternal Mortality Ratio – the number of maternal deaths per
100,000 live births – reduced from 212 in 2007 to 170 in 2016.
Health of women in India:
 As a natural process, females do gain considerable amount of weight during pregnancy and this
carries on even after child birth. But many of them ignore this change and remain unaware of the
complications which arise due to them.
 More than 40 percent of women in India are underweight when they begin pregnancy, according
to a new study published by Princeton University. The findings are a concern as body mass and
weight gain during pregnancy are important indicators of maternal health.
Women with Low BMI (Body Mass Index):
 As per NFHS 3, every third woman in India was undernourished (35.5 % with low Body Mass
Index) and every second woman (15-49 years) was anemic (55.3%).
 About 15.8 % were moderately to severely thin, with BMI less than 17. Bihar (45%), Chhattisgarh
(43%), Madhya Pradesh (42%) and Odisha (41%) were the states with the highest proportion of
undernourished women.
 In chronically undernourished women, pregnancy and lactation have an adverse effect on
maternal nutritional status. Low pre pregnancy weight and low pregnancy weight gain are
associated with low birth weight and all its attendant adverse consequences.
 Recent findings from NFHS 4 (2015-16) highlight that nutritional status of women and girls (in the
age group 15-49 years) has improved for all States.
 Overall, there has been a decrease from 35.5% (NFHS-3) to 22.9% (NFHS-4) in the prevalence of
women with low BMI. The decrease has been by almost 50% in the states of Tripura, J&K,
Haryana, Tamil Nadu and Kerala.
Anemia in Women: It is seen that overall, the levels of anemia among women and girls (15-59 age
bracket) has stagnated over the last decade from 55.3% in NFHS-3 to 53% in NFHS-4. In terms of
percentage points, States which have witnessed maximum decrease in the levels of anemia are- Sikkim
(24.6), Assam (23.3), Mizoram (15.6), J&K (11.7), Tripura (10.6) and Chhattisgarh by 24.6 (10.5).
Alternatively, 8 States/ UTs (Punjab, Himachal Pradesh, Meghalaya, Delhi, Haryana, Uttar Pradesh, Tamil
Nadu and Kerala) have seen an increase in the prevalence of anemia.
 Child Healthcare:
Situation of Child Mortality in India:
Neo-natal Mortality Rate is 28/1000 live births.

Causes of Child Mortality in India:
 The major causes of child mortality in India (as per WHO, 2012) are - Neonatal causes (53%),
Pneumonia (15%), Diarrhoeal diseases (12%), Measles (3%) and others.
 Besides these, malnutrition is a contributory factor in 33% child deaths.
Immunization rates:

 NFHS 4 (2015-16) shows that there have been promising gains in child health care.
 The immunization rates have gone up. The number of children aged 12-23 months who were fully
immunized (BCG, measles and 3 doses each of Polio and DPT) has gone up from 43.5% in NFHS-
3 to 62% in NFHS-4.
 In terms of percentage points, maximum increase is seen in Punjab, Bihar, Meghalaya, Rajasthan
and Uttar Pradesh.
 However, the number of children receiving full immunization has gone down in Tamil Nadu,
Himachal Pradesh, Haryana, Maharashtra and Uttarakhand.
Current Status of Malnutrition in India:
What is malnutrition?
Malnutrition indicates that children are either too short for their age or too thin.
 Children whose height is below the average for their age are considered to be stunted.
 Similarly, children whose weight is below the average for their age are considered thin for their
height or wasted.
 Together, the stunted and wasted children are considered to be underweight – indicating a lack
of proper nutritional intake and inadequate care post childbirth.

What is the extent of malnutrition in India?
 India’s performance on key malnutrition indicators is poor according to national and
international studies.
 According to UNICEF, India was at the 10th spot among countries with the highest number of
underweight children, and at the 17th spot for the highest number of stunted children in the
world.
 It is estimated that malnutrition is a contributing factor in about one-third of all deaths of children
under the age of 5.
 Figure 1 looks at the key statistics on malnutrition for children in India.
 Over the decade between 2005 and 2015, there has been an overall reduction in the proportion
of underweight children in India, mainly on account of an improvement in stunting.
 While the percentage of stunted children under 5 reduced from 48% in 2005-06 to 38.4% in 2015-
16, there has been a rise in the percentage of children who are wasted from 19.8% to 21% during
this period.
 A high increase in the incidence of wasting was noted in Punjab, Goa, Maharashtra, Karnataka,
and Sikkim.
 The prevalence of underweight children was found to be higher in rural areas (38%) than urban
areas (29%).

 According to WHO, infants weighing less than 2.5 Kg are 20 times more likely to die than heavier
babies.
 In India, the national average weight at birth is less than 2.5 Kg for 19% of the children.
 The incidence of low birth-weight babies varied across different states, with Madhya Pradesh,
Rajasthan and Uttar Pradesh witnessing the highest number of underweight childbirths at 23%.
 Further, more than half of India’s children are anaemic (58%), indicating an inadequate amount
of haemoglobin in the blood.
 This is caused by a nutritional deficiency of iron and other essential minerals, and vitamins in the
body.
 NSSO: Key Indications of Social Consumption in India: Health
The National Sample Survey Office (NSSO), Ministry of Statistics and Programme Implementation has
released the key indicators of Social Consumption in India: Health, generated from the data collected
during the period January to June 2014 in its 71st round survey.
The salient features of the report are:
 Urban India is sicker than the rural hinterland despite the mushrooming of health and wellness
clinics and super-specialty hospitals, besides better per capita earnings.
 And this could well be attributed to increasing pollution levels and unhealthy dietary habits.
 A government health survey has revealed that around 11.8% of urban and 8.9% of rural
population reported ailments during a 15-day reference period.
 Women were found to be more vulnerable to diseases in both cities and villages.
 The survey found that 13.5% of women, as compared to 10.1% of men, fell sick in urban areas,
while the figures were 9.9% and 8%, respectively, in rural India.
 What's worrisome is that a high chunk of the population (86% in rural and 82% in urban areas)
remains outside any scheme of health expenditure support.
 The NSSO survey reiterates that people rely more on private hospitals, with over 70% spells of
ailment (72% in rural areas and 79% in urban areas) being treated in the private sector.
 It shows that higher amount was spent for treatment per hospitalized case by people in the
private hospitals (Rs. 25,850) than in the public hospitals (Rs. 6,120).
 The highest expenditure was recorded for treatment of Cancer Rs. 56,712) followed by that for
Cardio-vascular diseases (Rs. 31,647).
 Also, private institutions dominated both rural (58%) and urban areas (68%) in treating
inpatients. Allopathy remains the preferred treatment in rural as well as urban areas.

 The survey found that over 90% of rural and urban population relies on allopathic treatment
despite the government's efforts to promote alternative medicine.
 National Health Policy, 2017: Salient Features:
 The Union Cabinet has approved The National Health Policy, 2017 replacing the previous one,
which was framed 15 years ago in 2002.
 The aim of the policy: It aims at providing healthcare in an “assured manner” to all and thus will
address current and emerging challenges arising from the ever changing socio-economic,
technological and epidemiological scenarios.
 Highlights:
 It intends on gradually increasing public health expenditure to 2.5% of the GDP.
 The government aims in shifting focus from “sick-care” to “wellness”, by promoting prevention
and well-being.
 It aims to strengthen health systems by ensuring everyone has access to quality services and
technology despite financial barriers.
 It proposes free drugs, free diagnostics and free emergency and essential healthcare services in
public hospitals.
 It focuses on primary health care: The policy advocates allocating two-thirds (or more) of
resources to primary care. It proposes two beds per 1,000 of the population to enable access
within the golden hour (the first 60 minutes after a traumatic injury).
 It promotes ‘Make in India’ initiative by using drugs and devices manufactured in the country.
 It aims to reduce morbidity and preventable mortality of non-communicable diseases (NCDs) by
advocating prescreening.
 It highlights AYUSH (Ayurveda, Yoga & Naturopathy, Unani, Siddha and Homeopathy) as a tool
for effective prevention and therapy that is safe and cost-effective. It proposes introducing Yoga
in more schools and offices to promote good health.
 Quantitative targets listed in the policy:
 Increase Life Expectancy at birth from 67.5 to 70 by 2025.
 Reduce Under Five Mortality to 23 by 2025.
 Reduce infant mortality rate to 28 by 2019.
 To reduce premature mortality from cardiovascular diseases, cancer, diabetes or chronic
respiratory diseases by 25% by 2025.
 Achieve the global 2020 HIV target (also termed 90:90:90; 90% of all people living with HIV know
their HIV status, 90% of all people diagnosed with HIV infection receive sustained antiretroviral
therapy and 90% of all people receiving antiretroviral therapy will have viral suppression).
 Reduction of TFR to 2.1 at national and sub-national level by 2025.
 Reduce neo-natal mortality to 16 and still birth rate to “single digit” by 2025.
 Achieve and maintain elimination status of Leprosy by 2018, Kala-Azar by 2017 and Lymphatic
Filariasis in endemic pockets by 2017.
 To achieve and maintain a cure rate of >85% in new sputum positive patients for TB and reduce
incidence of new cases, to reach elimination status by 2025.
 To reduce the prevalence of blindness to 0.25/ 1000 by 2025 and disease burden by one third
from current levels.
 It seeks to establish regular tracking of disability adjusted life years (DALY) Index as a measure of
burden of disease and its major categories trends by 2022.
 National Nutrition Strategy:
 To bring nutrition to the centre-stage of the national development agenda, government think
tank NITI Aayog has drafted a National Nutrition Strategy.
 The strategy lays down a roadmap for effective action, among both implementers and
practitioners, in achieving nutrition objectives.
 The nutrition strategy envisages a framework wherein the four proximate determinants of
nutrition– uptake of health services, food, drinking water and sanitation and income and
livelihoods–work together to accelerate decline of under nutrition in India.
 The nutrition strategy framework envisages a ‘Kuposhan Mukt Bharat’—linked to Swachh Bharat
and Swasth Bharat. The aim is to ensure that states create customized state/district action plans
to address local needs and challenges.
 The strategy enables states to make strategic choices, through decentralized planning and local
innovation, with accountability for nutrition outcomes.
Key features of the strategy include:
 The Strategy aims to reduce all forms of malnutrition by 2030, with a focus on the most
vulnerable and critical age groups. The Strategy also aims to assist in achieving the targets
identified as part of the Sustainable Development Goals related to nutrition and health.
 The Strategy aims to launch a National Nutrition Mission, similar to the National Health Mission.
This is to enable integration of nutrition-related interventions cutting across sectors like women
and child development, health, food and public distribution, sanitation, drinking water, and rural
development.
 A decentralized approach will be promoted with greater flexibility and decision making at the
state, district and local levels. Further, the Strategy aims to strengthen the ownership of
Panchayati Raj institutions and urban local bodies over nutrition initiatives. This is to enable
decentralised planning and local innovation along with accountability for nutrition outcomes.
 The Strategy proposes to launch interventions with a focus on improving healthcare and
nutrition among children.
 Health related targets in NITI Aayog’s three year short-term action Action Plan:
NITI Aayog has put forth three-year 'Action Agenda' from 2017-18 to 2019-20. This has replaced the five
year plans of the Planning Commission.
The action plan states that: India faces a double burden of disease, wherein communicable diseases still
account for a significant proportion of disease burden. In 2012, out of the total number of Disability-
Adjusted Life Years (DALY) lost, 33% were attributable to these diseases. Non-communicable diseases
accounted for 55% of DALYs with injuries accounting for the remaining 12% in the same year.
The action plan mainly lays down the following goals:
 Over the course of the next three years, the healthcare system in the country must prioritize
public health and shift from being curative to preventive.
 Public Health is the science of protecting and improving the health of families and communities
through promotion of healthy lifestyles, research for disease and injury prevention and detection
and control of infectious diseases.
 Overall, public health is concerned with protecting the health of entire populations.
 Emphasis should be given on the stewardship role of the government. That is, setting and
enforcing rules/incentives to guide the behavior of the health system.
 An important role for preventive health is in targeting risk factors including smoking, high blood
pressure and sanitation. Early screening must be promoted so that diseases can be prevented or
treated at an early stage. This can help to avert costly hospital-based treatment.
The following box lists down specific Health Goals to be achieved by the Year 2020:
(Note: For some of the parameters mentioned the latest estimates are available in NFHS-4; refer those
in the appropriate section of this document)

 Schemes:
The Ministry of Health & Family Welfare is implementing various schemes, programmes and national
initiatives to provide universal access to quality healthcare.
As part of the plan process, many different programmes have been brought together under the
overarching umbrella of the National Health Mission (NHM) with National Rural Health Mission (NRHM)
and National Urban Health Mission (NUHM) as its two Sub-Missions.
 National Rural Health Mission: The National Rural Health Mission (NRHM) was launched on 12th
April 2005. NRHM seeks to provide quality healthcare to the rural population, especially the
vulnerable groups. Under the NRHM, the Empowered Action Group (EAG) States as well as North
Eastern States, Jammu & Kashmir and Himachal Pradesh have been given special focus.
 Major Initiatives under NRHM:
Accredited Social Health Activist (ASHA): Please refer to the Maternal Health Care Section.
Rogi Kalyan Samiti/Hospital Management Society is a simple yet effective management structure. This
committee is a registered society whose members act as trustees to manage the affairs of the hospital
and is responsible for upkeep of the facilities and ensure provision of better facilities to the patients in
the hospital.
The Untied Grants to Sub-Centres (SCs) has given a new confidence to our ANMs – Auxilliary Nurse
Mid-wives (discussed under maternal health care) in the field. The SCs are far better equipped now with

blood pressure measuring equipment, haemoglobin (Hb) measuring equipment, stethoscope, weighing
machine etc. This has facilitated provision of quality antenatal care and other healthcare services.
The Village Health Sanitation and Nutrition Committee (VHSNC) is an important tool of community
empowerment and participation at the grassroots level to address issues of environmental and social
determinants.
Janani Suraksha Yojana (JSY): Please refer to the Maternal Health Care Section.
Janani Shishu Suraksha Karyakram (JSSK): Please refer to the Maternal Health Care Section.
Facility Based Newborn Care: A continuum of newborn care has been established with the launch of
home based and facility based newborn care components ensuring that every newborn receives
essential care right from the time of birth and first 48 hours at the health facility and then at home
during the first 42 days of life. Newborn Care Corners (NBCCs) are established at delivery points to
provide essential newborn care at birth.
National Mobile Medical Units (NMMUs): Support has been provided in 333 out of 672 districts for
1107 Mobile Medical Units (MMUs) under NHM in the country. To increase visibility, awareness and
accountability, all Mobile Medical Units (MMUs) have been repositioned as “National Mobile Medical
Unit Service” with universal colour and design.
National Ambulance Services (NAS): As on date, 31 States/UTs have the facility where people can dial
108 or 102 telephone number for calling an ambulance.
Launch of Kayakalp: It is an initiative for award to Public Health facilities. Kayakalp initiative has been
launched to promote cleanliness, hygiene and infection control practices in public health facilities. Under
this initiative public healthcare facilities shall be appraised and such public healthcare facilities that show
exemplary performance meeting standards of protocols of cleanliness, hygiene and infection control will
receive awards and commendation.
Kilkari and Mobile Academy:
 To create proper awareness among pregnant women, parents of children and field workers about
the importance of Ante-Natal Care (ANC), Institutional Delivery, Post-Natal Care (PNC) and
Immunization, it was decided to implement the Kilkari and Mobile Academy services across India
in phased manner.
 Kilkari is an Interactive Voice Response (IVR) based mobile service that delivers time-sensitive
audio messages (Voice Call) about pregnancy and child health directly to the mobile phones of
pregnant women, mothers of young children and their families.
 The service covers the critical time period–where the most maternal/infant deaths occur from
the 4th month of pregnancy until the child is one year old.
 Kilkari services will be available to states in regional dialect too.
 Mobile Academy is an anytime, anywhere audio training course on interpersonal communication
skills that the ASHA can access from her mobile phone.
 National Urban Health Mission (NUHM)

 National Urban Health Mission (NUHM) was approved by the Union Cabinet on 1st May, 2013 as
a sub-mission under an overarching National Health Mission (NHM) for providing equitable and
quality primary healthcare services to the urban population with special focus on slum and
vulnerable sections of the society. NUHM seeks to improve the health status by facilitating their
access to quality primary healthcare.
 Funding pattern: The Centre-State funding pattern is 60:40 for all the States w.e.f. FY 2015-16,
except the North Eastern States and other hilly States viz. Jammu & Kashmir, Himachal Pradesh
and Uttarakhand, for which the Centre-State funding pattern is 90:10.
 In the case of UTs the entire NUHM programme is fully funded by Central Government.
 Implementation: Urban Health programme is being implemented through Urban Local Bodies
(ULBs), in seven metropolitan cities, viz., Mumbai, New Delhi, Chennai, Kolkata, Hyderabad,
Bengaluru and Ahmedabad.
 Under the Programme the support is being provided by the Asian Development Bank (ADB)
based on progress related to certain indicators.
 The following are the initiatives under NUHM:
Service Delivery Infrastructure: NUHM envisages setting up of service delivery infrastructure which is
largely absent in cities/ towns to specially address the healthcare needs of urban poor and provides:
 Urban–Primary Health Centre (U-PHC): New U-PHCs are established as per gap analysis, as per
norm of one U-PHC for approximately 50,000 urban populations.
 Urban-Community Health Centre (U-CHC) and Referral Hospitals: 30-50 bedded U-CHCs are
established for providing inpatient care. U-CHCs are set up in cities with a population of above 5
lakhs.
Community Process Mahila Arogya Samiti (MAS): MAS have been formed to facilitate community
mobilization, monitoring and referral with focus on preventive and promotive care, facilitating access to
identified facilities and management of grants received.

ASHA/Link Worker: One frontline community worker ASHA serves as an effective and demand–
generating link between the health facility and the urban slum population.
 Schemes related to maternal health care:
Accredited Social Health Activist (ASHA)

One of the key components of all the government health schemes in rural India is to provide every village
in the country with a trained female community health activist ASHA or Accredited Social Health Activist
(presently, about 1 million of them are in service).
Following are the key components of ASHA:
 Eligibility: ASHA must primarily be a woman resident of the village married/ widowed/ divorced,
preferably in the age group of 25 to 45 years. (Minimum education required is 10th standard,
which is relaxed only if no woman with the required qualification is available in the village).
 The ASHAs receive performance-based incentives for promoting universal immunization, referral
and escort services for Reproductive & Child Health (RCH) and other healthcare programmes,
and construction of household toilets.
 ASHA will be the first port of call for any health related demands of deprived sections of the
population, especially women and children, who find it difficult to access health services.
 ASHA will mobilise the community and facilitate them in accessing health and health related
services available at the Anganwadi/sub-centre/primary health centers, such as immunisation,
Ante Natal Check-up (ANC), Post Natal Check-up supplementary nutrition, sanitation and other
services being provided by the government.
Auxiliary nurse midwife (ANM):

 Auxiliary nurse midwife, commonly known as ANM, is a village-level female health worker, who
is known as the first contact person between the community and the health services.
 ANMs are regarded as the grass-roots workers in the health organization pyramid.
 Their services are considered important to provide safe and effective care to village communities.
 ANMs works at health sub-centres. The sub-centre is a small village-level institution that provides
primary health care to the community. The sub-centre works under the Primary Health Centre
(PHC). Each PHC usually has around six such sub-centres. ANMs are expected to be multi-purpose
health workers.
Relationship with ASHA: With the Anganwadi Worker (AWW), the ANM acts as a resource person for
the training of ASHAs. The ANM motivates ASHAs to bring beneficiaries to the institution. The ASHA
brings pregnant women to the ANM for check-ups. The ASHA act as bridge between the ANM and the
village.
Anganwadi Centres:
 Anganwadi is a government sponsored child-care and mother-care center in India. It caters to
children in the 0-6 age group. The word means "courtyard shelter" in Hindi. They were started by
the Indian government in 1975 as part of the Integrated Child Development Services program to
combat child hunger and malnutrition.
 The Anganwadi system is mainly managed by the Anganwadi worker.
 She is a health worker chosen from the community and given 4 months training in health,
nutrition and child-care. She is incharge of an Anganwadi which covers a population of 1000.
 They provide outreach services to poor families in need of immunization, healthy food, clean
water, clean toilets and a learning environment for infants, toddlers and pre-schoolers.
The RMNCH+A Approach: Reproductive, Maternal, Newborn, Child and Adolescent Health
 RMNCH+A approach has been launched in 2013 and it essentially looks to address the major
causes of mortality among women and children as well as the delays in accessing and utilizing
health care and services.
 The RMNCH+A strategic approach has been developed to provide an understanding of
‘continuum of care’ to ensure equal focus on various life stages.
 It also introduces new initiatives like the use of Score Card to track the performance, National
Iron + Initiative to address the issue of anaemia across all age groups and the Comprehensive
Screening and Early interventions for defects at birth , diseases and deficiencies among children
and adolescents.
Indra Gandhi Matritva Sahyog Yojana:

This scheme’s name has been changed to Pradhan Mantri Matritva Vandana Yojana (PMMVY). This
scheme comes under the Ministry of Women and Child Development
Salient features of the scheme are:
 It is a Centrally Sponsored Scheme.

 It includes Conditional Maternity Benefit (CMB) for pregnant and lactating women to improve
their health and nutrition status to better enabling environment by providing cash incentives to
pregnant and nursing mothers.

 It is being implemented using the platform of Integrated Child Development Services (ICDS)
Scheme
 The beneficiaries are paid Rs.6000/ in two installments through bank accounts or post office
accounts.
 Beneficiaries: The beneficiaries would be pregnant women of 19 years of age and above for first
two live births (benefit for still births will be as per the norms of scheme).
 All Government/PSUs (Central & State) employees are excluded from the scheme as they are
entitled for paid maternity leave.
Janani Suraksha Yojana

This scheme was launched in 2005. It is a safe motherhood intervention under the National Health
Mission being implemented with the objective of reducing maternal and neo-natal (infants upto 28 days
after birth) mortality by promoting institutional delivery among the poor pregnant women. This
programme provides cash assistance with delivery and post-delivery care.
The salient features of this scheme are:
 JSY is a 100 % centrally sponsored scheme and it integrates cash assistance with delivery and
post-delivery care
 The success of the scheme is be determined by the increase in institutional delivery among the
poor families.
 The Asha as well as Aanganwadi Worker (AWW) like activists become the effective link between
Government and poor women in this programme.
 Beneficiary: Now, Below Party Line (BPL) women can access JSY benefits irrespective of their age
and number of children. All women from BPL category, Scheduled Castes and Scheduled Tribes
in all States and Union Territories will be eligible for JSY benefits if they have given birth in a
government or private accredited health facility.
 BPL women who prefer to deliver at home can also get JSY benefits.
Janani Shishu Suraksha Karyakaram

 It was launched on 1st June, 2011, this scheme supplements the cash assistance given to a
pregnant woman under Janani Suraksha Yojana
 It is aimed at mitigating the burden of out of pocket expenses incurred by pregnant women and
sick newborns.

 The entitlements under this programme include free drugs and consumables, free diet up to 3
days during normal delivery and up to 7 days for C-section, free diagnostics, and free blood
wherever required.
 Schemes for Child Care Health in India:
 Government interventions for neo-natal health are as under:
India Newborn Action Plan (INAP): It was launched in 2014 to make concerted efforts towards
attainment of the goals of “Single Digit Neo-natal Mortality Rate” and “Single Digit Stillbirth Rate”, by
2030.
Promotion of Institutional Deliveries and Essential Newborn Care:
 Since antenatal and intra-partum events have a bearing on newborn health, institutional
deliveries are being promoted with cash incentives in the form of Janani Suraksha Yojana (JSY).
 Newborn Care Corners (NBCCs) have been operationalized at delivery points to provide essential
newborn care at the time of birth.
 In order to reduce out of pocket expenses, Janani Shishu Swasthya Karyakram (JSSK) entitlements
have been provided to ensure cashless treatment of pregnant woman and her child till one year
of age in public health facilities. This also includes free referral transport.
Home Based Newborn Care (HBNC): It has been initiated by ASHAs for promotion of essential newborn
care including breastfeeding practices, early identification and referral of neo-natal illnesses.
Facility Based Newborn Care (FBNC): It is being scaled up for care of small or sick newborns.
Newer interventions: To reduce newborn mortality the following have also been implemented, Vitamin
K injection at birth, Antenatal corticosteroids in pre-term labour, Kangaroo Mother Care (KMC) and
empowering ANMs to provide injection Gentamycin to young infants for possible serious bacterial
infection.
Maternal and Neonatal Tetanus Elimination (MNTE): WHO had set the global target date of December,
2015 for MNTE validation. However, India has been validated for Maternal & Neonatal tetanus
elimination in May 2015, well before the target date.
 The strategic nutrition related interventions are as under:
Promotion of Infant and Young Child Feeding practices (IYCF): Exclusive breastfeeding for first six
months, complementary feeding beginning at six months and appropriate Infant and Young Child

Feeding practices (IYCF) are being promoted in convergence with the Ministry of Woman and Child
Development.
Establishment of Nutritional Rehabilitation Centres (NRCs): 891 NRCs have been set up at facility level
to provide medical and nutritional care to Severe Acute Malnourished (SAM) children under 5 years of
age who have medical complications.
National Iron Plus Initiative (NIPI): To address anaemia, NIPI has been launched, which includes
provision of supervised bi-weekly Iron Folic Acid (IFA) supplementation by ASHA for children aged 6 to
59 months and Weekly Iron Folic Acid Supplementation (WIFS) for children 5 to 10 years (known as
WIFS-junior).
National Deworming Day (NDD): National Deworming Day is observed on 10th February. A fixed day
strategy is implemented throughout the country in related stressed areas where children between ages
of 1–19 years (with some of States not covering the total range of age groups), receive deworming tablet
(Albendazole) during the National Deworming Day.
Bi-annual Vitamin-A Supplementation is being provided to all children aged 9 to 59 months of age. Bi-
annual Vitamin-A supplementation rounds are conducted in 15 States.
 Pneumonia & Diarrhoea related interventions

Pneumonia and diarrhoea are leading childhood killers, responsible for 15% and 12% of child (0-5 years)
deaths, respectively.
Integrated Action Plan for Pneumonia and Diarrhoea (IAPPD) has been formulated for four states with
highest child mortality (Uttar Pradesh, Madhya Pradesh, Bihar and Rajasthan) to address the two biggest
killers of children, namely - Pneumonia and Diarrhoea.
The strategic interventions targeting pneumonia and diarrhoea are as below:
 Promotion of Integrated Management of Neo-natal and Childhood Illnesses (IMNCI) for early
diagnosis and case management of common ailments of children with special emphasis on
pneumonia, diarrhoea and malnutrition is being promoted for care of children at community as
well as facility level.
 Increase awareness about use of ORS and Zinc
 Interventions to address birth defects, disabilities, delays and deficiencies:

Rashtriya Bal Swasthya Karyakram (RBSK)

 It has been launched to provide child health screening and early interventions services by
expanding the reach of mobile health teams at block level.
 These teams will also carry out screening of all the children in the age group 0–6 years enrolled
at Anganwadi Centres at least twice a year.
 RBSK covers 30 common health conditions. States/UTs may incorporate a few more conditions
based on high prevalence/endemicity.
The strategic interventions to address birth defects, disabilities, delays and deficiencies are:
 Screening of children under RBSK: Child health screening and early intervention services through
early detection of birth defects, diseases, deficiencies, development delays including disability (4
Ds) and reduce out of pocket expenditure for the families.
 Establishment of District Early Intervention Centres (DEICs) in the districts of the country for
providing management of cases referred from the blocks and link these children with tertiary
level health services in case surgical management is required
 Birth Defects Surveillance System (BDSS) is being established to serve as a tool for identifying
congenital anomalies. It is as a collaborative effort between the Ministry of Health and Family
Welfare (MoHFW), Government of India (GoI), World Health Organization (WHO).
 Immunization Activities
Government of India is providing vaccination free of cost against nine vaccine preventable diseases i.e.
Diphtheria, Pertussis, Tetanus, Polio, Measles, severe form of Childhood Tuberculosis, Hepatitis B across
the country and Japanese Encephalitis in selected districts and Meningitis & Pneumonia caused by
Haemophilus Influenza type B in selected states/districts under universal immunization program (UIP).
All cold chain equipment and their functionality are managed through web enabled software to capture
real time data, National Cold Chain Management Information System (NCCMIS).
Mission Indradhanush: The Ministry of Health & Family Welfare has launched “Mission Indradhanush”,
depicting seven colours of the rainbow in December 2014, to fully immunize more than 89 lakh children
who are either unvaccinated or partially vaccinated; those that have not been covered during the rounds
of routine immunization for various reasons.
They will be fully immunized against seven life threatening vaccine preventable diseases which include
diphtheria, whooping cough, tetanus, polio, tuberculosis, measles and hepatitis-B.

Update: May, 2017:
 The Prime Minister's Office has advanced the deadline for the Centre's immunisation
programme, Mission Indradhanush, by more than a year and asked the health ministry to strive
to complete it by December 2018.
 The mission, launched in December 2014 by the health ministry, earlier had a deadline of 2020
to provide full immunisation to more than 90% children in the country.
 The government has so far completed three phases of the mission across 497 districts and the
fourth phase is on in 68 districts across eight states in the Northeast since February this year
(2017).
 The government has added four new vaccinations: rotavirus, measles rubella, inactivated polio
vaccine biavalent and Japanese Encephalitis for adults. With this the total vaccinations have
gone up from seven to eleven.
Pentavalent Vaccine: The Pentavalent vaccine contains five antigens i.e. Hepatitis B, Diphtheria,
Pertussis, Tetanus (DPT–current trivalent vaccine) and Haemophilus influenza b (Hib) vaccine.
Pentavalent vaccination is provided to the children at the age of 6, 10 and 14 weeks as primary dose.
 Let us see some of the recent initiatives of the Health Ministry:
The Pradhan Mantri Surakshit Matritva Abhiyan (PMSMA)

Pradhan Mantri Surakshit Matritva Abhiyan (PMSMA) is aimed at reducing maternal and infant mortality
rates through safe pregnancies and safe deliveries. The national programme will provide special free
antenatal care to about 3 crore pregnant women across the country in order to detect and prevent high
risk pregnancies. The nationwide programme will provide fixed day assured, comprehensive and quality
antenatal care to pregnant women on the 9th of every month.
MAA-Mother’s Absolute Affection

 A nationwide programme launched in an attempt to bring undiluted focus on promotion of
breastfeeding and provision of counselling services for supporting breastfeeding through health
systems.
 The programme has been named ‘MAA’ to signify the support a lactating mother requires from
family members and at health facilities to breastfeed successfully.
 The chief components of the MAA Programme are Community awareness generation,
Strengthening inter personal communication through ASHA, Skilled support for breastfeeding at
delivery points in public health facilities, and monitoring and award/recognition.

National Human Milk Bank and Lactation Counselling Centre Inaugurated:
 The Ministry of Health and Family Welfare inaugurated the ‘Vatsalya – Maatri Amrit Kosh’, a
National Human Milk Bank and Lactation Counselling Centre at the Lady Hardinge Medical
College (LHMC) in collaboration with the Norwegian government, Oslo University and Norway
India Partnership Initiative (NIPI).
 This would be the largest human milk bank and lactation counselling centre available under the
public sector in North India.
 It is a national human milk bank and lactation counseling centre that will collect, pasteurize, test
and safely store milk that has been donated by lactating mothers and make it available for infants
in need.
NITI Aayog has partnered with 6 states to transform Health & Education sectors:
 NITI Aayog has announced partnership with six states (with three states for health sector reforms
and three states for education sector reforms) under its Sustainable Action for Transforming
Human Capital (SATH) initiative.
 NITI Aayog has selected Uttar Pradesh, Assam, and Karnataka to improve healthcare delivery and
key outcomes in these States.
 For Education sector, Madhya Pradesh, Odisha, and Jharkhand have been selected for support to
better learning outcomes.
 SATH programme: Objective of this program is to identify and build three future ‘role model’
states for health and educations systems.
 NITI Aayog along with McKinsey & Company and IPE Global consortium will work in close
collaboration with administrative machinery and institutions in the selected states to accomplish
the end objectives.
 The chosen States have committed to time-bound, governance reforms in respective sectors.
 A Program Management Unit to push for efficiency and efficacy in governance structures and
service delivery will now be available in the six chosen States for a period of 36 months.
Skill for Life Save a Life: Union Government has launched a Skill for Life, Save a Life Initiative on 6th of
June, 2017. Its aim is to promote skill development in the health sector. Under this initiative, various
courses will be initiated targeting specific competencies for healthcare professionals as well as for
general public.

Its objective is to upscale the quantity and quality of trained professionals in the healthcare system. It
will also empower every single citizen of the country to provide first aid and initial care in case of an
emergency.
 New Initiatives under Family Planning

Expanding basket of choices: Three new methods have been introduced in the National Family Planning
program: Injectable Contraceptive DMPA (Antara)- a 3-monthly injection; Centchroman pill (Chhaya)- a
non-hormonal once a week pill; Progesterone-only pills (POP) – for lactating mothers
New Family Planning Media Campaign: A 360 degree holistic Family Planning campaign with a new logo
has been launched with Shri Amitabh Bachchan as the brand ambassador.
 IT Initiatives:
Swasth Bharat Mobile application: “Swasth Bharat Mobile Application” to empower the citizens to find
reliable and relevant health information. The application provides detailed information regarding
healthy lifestyle, disease conditions (A-Z), symptoms, treatment options, first aid and public health
alerts.
E-RaktKosh initiative- It is an integrated Blood Bank Management Information System that has been
conceptualized and developed after multiple consultations with all stakeholders. This web-based
mechanism interconnects all the Blood Banks of the State into a single network. The Integrated Blood
Bank MIS refers the acquisition, validation, storage and circulation of various live data and information
electronically regarding blood donation and transfusion service.
M-Cessation aims at reaching out to those willing to quit tobacco use and support them towards
successful quitting through text messages sent via mobile phones.
National Health Portal (NHP) was launched to provide healthcare related information to the citizens of
India and to serve as a single point of access for consolidated health information.
Online Registration System (ORS): Online Registration System (ORS) is a framework to link various
hospitals across the country for Aadhaar based online registration and appointment system, where
counter based OPD registration and appointment system through Hospital Management Information
System (HMIS) has been digitalized.
National e-Health Authority (NeHA) will be an integrated health information system. It will help avoid
problems arising out of uncoordinated induction of IT systems in hospitals and public health systems. It

will also enforce the laws and regulations relating to the privacy and security of patients' health
information and records. There would be a provision of Electronic Health Records (EHR) of patients.
 Disease Control Initiatives

Tuberculosis:
Bedaquiline was launched as part of the RNTCP (Revised National Tuberculosis Programme). The drug
is a new anti-TB drug for treatment of MDR-TB. This new class of drug is a diarylquinoline that specifically
targets Mycobacterial ATP synthase, an enzyme essential for supply of energy to Mycobacterium
tuberculosis and most other mycobacteria. This drug is indicated for use in the treatment of drug-
resistant TB. Bedaquiline has been introduced at six identified tertiary care centres across India.
HIV/AIDS control: Third line ART programme for People Living with HIV has been launched. The life-
saving third line ART costs nearly Rs. 1.18 lakh per patient per year. Providing these free would not only
safe lives but improve socioeconomic conditions of the patients. This initiative brings India’s ART
programme at par with programmes in the developed countries
The National Framework for Malaria Elimination (NFME)
 It was launched on 11th February 2016. Preventive measures by source reduction, engineering
methods, use of Long Lasting Insecticidal Nets (LLIN), Indoor Residual Spray (IRS), repellents, early
case detection, complete treatment are part of the strategy.
 The Ministry provided Technical Guidelines to the States for prevention and control including
vector control and also uploaded these guidelines on National Vector Borne Disease Control
Programme (NVBDCP) website.
‘National Dengue Day’ was observed on 16th May 2017 throughout the country. ‘India’s 2017 National
Dengue Day theme is “Dengue Free India”, which it aims to achieve through increased community
ownership to prevent dengue related morbidity and mortality in India.
Program for Organ Transplant:
 Government of India has launched National Organ Transplant Programme for carrying out the
activities as per Transplantation of Human Organs and Tissues Act, 1994 training of manpower
and promotion of organ donation from deceased persons.
 Under the said programme, an apex level organization, National Organ and Tissue Transplant
Organization (NOTTO) has been set-up at Safdarjung Hospital, New Delhi for National

networking, National Registry, to provide an online system for procurement and distribution of
Organs & Tissues and to promote Deceased Organ and Tissue Donation
 National Organ and Tissue Donation and Transplant Registry (NOTTR) have been launched.
NOTTO has launched National Registry for maintaining National Waiting list of patients who
require organs/ tissue. Policy and criteria for organ allocation in case of Kidney, Liver, Heart &
Lung and Cornea have been approved.
Budget 2017-18 (Health Sector)

Budget estimates for health show an appreciable increase of more than 27%. From Rs. 37061.55 cr in
2016-17, the budget estimate for 2017-18 has been increased to Rs. 48853 cr. This will help to attend
tertiary care, human resources for health and medical education and to strengthen NHM.
Major Announcements
• 1.5 lakh health sub-centres to be transformed to Health Wellness Centres
• To create additional 5,000 Post Graduate seats per annum to ensure adequate availability of
specialist doctors to strengthen Secondary and Tertiary levels of health care
• Two new All India Institutes of Medical Sciences to be set up in Jharkhand and Gujarat
• Propose to amend the Drugs and Cosmetics Rules to ensure availability of drugs at reasonable
prices and promote use of generic medicines
• For senior citizens, Aadhar based Smart Cards containing their health details will be introduced.
 National Health Programmes:
 The National AIDS Control Programme

About the disease:
AIDS (Acquired immune deficiency syndrome or acquired immunodeficiency syndrome) is a syndrome

caused by a virus called HIV (Human Immunodeficiency Virus). The illness alters the immune system,
making people much more vulnerable to infections and diseases. This susceptibility worsens as the
syndrome progresses.
The National AIDS Control Programme (NACP):
 It was launched in 1992 and it is being implemented as a comprehensive programme for

prevention and control of HIV/ AIDS in India.

 Over time, the focus has shifted from raising awareness to behaviour change, from a national
response to a more decentralized response and to increasing involvement of NGOs and networks
of People living with HIV (PLHIV).
 The NACP I started in 1992 was implemented with an objective of slowing down the spread of
HIV infections so as to reduce morbidity, mortality and impact of AIDS in the country.
 In November 1999, the second National AIDS Control Project (NACP II) was launched to reduce
the spread of HIV infection in India, and to increase India’s capacity to respond to HIV/AIDS on a
long-term basis.
 NACP III was launched in July 2007 with the goal of Halting and Reversing the Epidemic over its
five-year period.
 NACP IV, launched in 2012, aims to accelerate the process of reversal and further strengthen
the epidemic response in India through a cautious and well defined integration process over the
next five years.
NACP - IV Objectives: Reduce new infections by 50% (2007 Baseline of NACP III). Provide comprehensive
care and support to all persons living with HIV/AIDS and treatment services for all those who require it.
New Initiatives under NACP IV
 Establishment and scale up of interventions for Transgenders (TGs) by bringing in community

participation and focused strategies to address their vulnerabilities
 Scale up of Multi-Drug Regimen for Prevention of Parent to Child Transmission (PPTCT) in keeping
with international protocols
 Establishment of Metro Blood Banks and Plasma Fractionation Centre
 Launch of Third Line ART and scale up of first and second Line ART
 Demand promotion strategies specially using mid-media, e.g., National Folk Media Campaign &
Red Ribbon Express and buses (in convergence with the National Health Mission)
HIV and AIDS (Prevention and Control) Bill, 2017
 The Lok Sabha has passed the Human Immunodeficiency Virus (HIV) and Acquired Immune
Deficiency Syndrome (AIDS) (Prevention and Control) Bill, 2017, which will strengthen the rights
of the people infected with the disease. Rajya Sabha has already passed the Bill.
 Under the Bill, central and state governments are obliged to provide for anti-retroviral therapy
(ART) and management of opportunistic infections (infections that take advantage of weakness

in the immune system and occur frequently). The bill also prohibits specific acts of discrimination
by the state, or any other person, against HIV-positive people, or those living with such people.
 The Bill lays down penal provisions for any discrimination practiced against a person with
HIV/AIDS and breach of confidentiality.
 The bill also provides for an ombudsman. According to the provisions of the Bill, an ombudsman
shall be appointed by each state government to inquire into complaints related to the violation
of the Act and the provision of health care services.
 Cases relating to HIV positive persons shall be disposed off by the court on a priority basis.
 There are approximately 21 lakh persons estimated to be living with HIV in India and the
percentage of patients receiving anti-retroviral therapy (ART) treatment currently stands at a
mere 25.82% as against the global percentage of 41%, according to the 2015 Global Burden of
Diseases (GBD).
 Revised National Tuberculosis Control Programme

 The National TB Control Programme was started in 1962 with the aim to detect cases earliest and
treat them.
 In the district, the programme is implemented through the district Tuberculosis Centre (DTC) and
the Primary Health Institutions.
 The District Tuberculosis Programme (DTP) is supported by the state level organization for the
coordination and supervision of the programme.
 The Revised National Tuberculosis Control Programme (RNTCP), based on the DOTS strategy,
began as a pilot project in 1993 and was launched as a national programme in 1997 but rapid
RNTCP expansion began in late 1998
 The Revised National Tuberculosis Control Programme has initiated early and firm steps to its
declared objective of Universal access to early quality diagnosis and quality TB care for all TB
patients'.
NIKSHAY, the web based reporting for TB programme has been another notable achievement initiated
in 2012 and has enabled capture and transfer of individual patient data from the remotest health
institutions of the country.
To reach Universal Access RNTCP will pursue the following approaches:
 Ensuring early and improved diagnosis of all TB patients, through improving outreach, vigorously
expanding case-finding efforts among vulnerable populations, deploying better diagnostics, and
by extending services to patients diagnosed and treated in the private sector
 Improving patient-friendly access to high-quality treatment for all diagnosed cases of TB,
including scaling-up treatment for MDR-TB nationwide
 National Leprosy Eradication Programme

 The National Leprosy Eradication Programme is a centrally sponsored Health Scheme of the
Ministry of Health and Family Welfare, Govt. of India.
 The Programme is headed by the Deputy Director of Health Services (Leprosy) under the
administrative control of the Directorate General Health Services Govt. of India.
 While the NLEP strategies and plans are formulated centrally, the programme is implemented by
the States/UTs. The Programmes also supported as Partners by the World Health Organization,
The International Federation of Anti-leprosy Associations (ILEP) and few other Non-Govt.
Organizations.
Objectives
 Early detection through active surveillance by the trained health workers;

 Regular treatment of cases by providing Multi-Drug Therapy (MDT) at fixed in or centres a nearby
village of moderate to low endemic areas/district;
 Intensified health education and public awareness campaigns to remove social stigma attached
to the disease.
 Appropriate medical rehabilitation and leprosy ulcer care services.
 National Programme for the Health Care of the Elderly:
The unprecedented increase in human longevity in 20th century has resulted in the phenomenon of
population ageing all over the world. The population over the age of 60 years has tripled in last 50 years
in India and will relentlessly increase in near future.
In 2001, the proportion of older people was 7.7% which has increased to 8.14% in 2011 and 8.94% in
2016. Non-communicable diseases requiring large quantum of health and social care are extremely
common in old age, irrespective of socio-economic status.
About the programme: It is an articulation of the International and national commitments of the
Government as envisaged under the UN Convention on the Rights of Persons with Disabilities
(UNCRPD), National Policy on Older Persons (NPOP) adopted by the Government of India in 1999 &
Section 20 of “The Maintenance and Welfare of Parents and Senior Citizens Act, 2007” dealing with
provisions for medical care of Senior Citizen.

Specific Objectives of NPHCE are: To provide an easy access to promotional, preventive, curative and
rehabilitative services to the elderly through community based primary health care approach. To identify
health problems in the elderly and provide appropriate health interventions in the community with a
strong referral backup support. To provide referral services to the elderly patients through district
hospitals, regional medical institutions
 National Mental Health Programme

Psychiatric symptoms are common in general population in both sides of the globe. These symptoms –
worry, tiredness, and sleepless nights affect more than half of the adults at some time, while as many
as one person in seven experiences some form of diagnosable neurotic disorder.
Burden of Disease: The World Bank report (1993) revealed that the Disability Adjusted Life Year (DALY)
loss due to neuro-psychiatric disorder is much higher than diarrhoea, malaria, worm infestations and
tuberculosis if taken individually. According to the estimates daily loss due to mental disorders are
expected to represent 15% of the global burden of diseases by 2020.
Programme: The Government of India has launched the National Mental Health Programme (NMHP) in
1982, keeping in view the heavy burden of mental illness in the community, and the absolute inadequacy
of mental health care infrastructure in the country to deal with it.
NMHP has 3 components: Treatment of Mentally ill; Prevention and promotion of positive mental
health.
Objectives: To ensure availability and accessibility of minimum mental health care for all in the
foreseeable future, particularly to the most vulnerable and underprivileged sections of population.
Agencies like World Bank and WHO have been contacted to support various components of the
programme. Govt. of India has constituted central Mental Health Authority to oversee the
implementation of the Mental Health Act 1986. It provides for creation of state Mental Health Authority
also to carry out the said functions.
Mental Healthcare Bill, 2016:
 The Parliament has passed the ‘Mental Healthcare Bill’ in the Lok Sabha that decriminalizes
suicide attempt by mentally ill people and provides services for people with mental illness.
 The bill aims to provide for mental healthcare and services for persons with mental illness and
ensure these persons have the right to live a life with dignity by not being discriminated against
or harassed.
 Important provisions:
 Rights of persons with mental illness: This provision states that every person will have the right
to access mental healthcare from services which are operated or funded by the government.
 Advance Directive: This provision empowers a mentally-ill person to have the right to make an
advance directive that explains how she/he wants to be treated for the requisite illness and who
her/his nominated representative shall be.
 Mental Health Establishments: This provision states that every mental health establishment has
to be registered with the respective Central or State Mental Health Authority.
 Decriminalizing suicide and prohibiting electro-convulsive therapy: The most notable of all is this
provision effectively decriminalizes suicide attempt under the Indian Penal Code by mentally ill
persons by making it non-punishable. Electro-convulsive therapy, which is allowed only with the
use of anesthesia, is however out of bounds for minors.
 NATIONAL AYUSH MISSION (NAM)

 Department of AYUSH, Ministry of Health and Family Welfare, Government of India has launched
National AYUSH Mission (NAM) during 12th Plan for im-plementing through States/UTs.
 The basic objective of NAM is to promote AYUSH medical systems through cost effective AYUSH
services, strengthening of educational systems, facilitate the enforcement of quality control of
Ayurveda, Siddha and Unani & Homoeopathy (ASU &H) drugs and sustainable availability of ASU
& H raw-materials.
 The NAM contemplates establishment of a National Mission as well as corresponding Missions in
the State level. NAM is likely to improve significantly the Department’s outreach in terms of
planning, supervision and monitoring of the schemes.
Objectives:
• To provide cost effective AYUSH Services, with a universal access through upgrading AYUSH
Hospitals and Dispensaries, co-location of AYUSH facilities at Primary Health Centres (PHCs),
Community Health Centres (CHCs) and District Hospitals (DHs).
• To strengthen institutional capacity at the state level through upgrading AYUSH educational
institutions, State Govt. ASU&H Pharmacies, Drug Testing Laboratories and ASU & H enforcement
mechanism.
• Support cultivation of medicinal plants by adopting Good Agricultural Practices (GAPs) so as to
provide sustained supply of quality raw-materials and support certification mechanism for quality
standards, Good Agricultural/Collection/Storage Practices.

Worksheet

2. True /False
3. MCQs
4. Match the column
Happy Learning!!!

Summary Sheet
ESI- Education
Important Points
videos and notes
Mock Test

 What is Education? Education is a process in which and by which the knowledge, characters and
behavior of the human being are shaped and molded. Education leads to the enlightenment of
mankind.
 Why is education important? Education is an important activity in society; it gives an opportunity
to man to understand the world around him and his place in it. Ideally speaking, it is through
education that members of society, particularly the youth, come to understand the working of
society. Education, properly speaking, should develop a spirit of inquiry and rational thinking in
the youth so as to enable them to understand the society and change it wherever it is found
lacking.
 Literacy Rates in India:
Who is a literate?
According to Census, a person aged seven years or more than seven years who can read and write with
understanding in any language is called a literate person. A person who can merely read but cannot write
is not classified as literate. Any formal education or minimum educational standard is not necessary to
be considered literate.
Literacy Rate:
The total percentage of the population of an area at a particular time aged seven years or above who
can read and write with understanding is called literacy rate.
 The 15th official census in India was calculated in the year 2011.
 In a country like India, literacy is the main foundation for social and economic growth.
 When the British rule ended in India in the year 1947 the literacy rate was just 12%.
 Over the years, India has changed socially, economically, and globally. As per provisional
population totals of Census 2011, literates constitute 74 per cent of the total population aged
seven and above and illiterates form 26 percent.
 Literacy rate has gone up from 64.83 per cent in 2001 to 74.04 per cent in 2011 showing an
increase of 9.21 percentage points.
 The literacy rate for males and females works out to 82.14 per cent and 65.46 per cent
respectively. The increase in literacy rate in males and females during 2001-2011 is in the order
of 6.88 and 11.79 percentage points respectively.
 But still there is a ray of hope as out of total of 217,700,941 literates added during the decade,
female 110,069,001 outnumber male 107,631,940.
 A significant milestone reached in Census 2011 is that a decline of 31,196,847 among illiterates
is noted.
 Out of total decrease of 31,196,847 in number of illiterates, the female 17,122,197 outnumber
males 14,074,650.
 The gap of 21.59 percentage points recorded between male and female literacy rates in 2001
Census has reduced to 16.68 percentage points in 2011.
 Education related data in Socio-Economic Caste Census (SECC), 2011:

From the above given information it can be concluded that: Working in anything other than agriculture
will be a tough ask, given the level of education – fewer than 10 per cent make it to higher secondary or
above and just 3.41 per cent of households have a family member who is at least a graduate.
 Constitutional and legal provisions relating to Education in India:

 Education: Shift from State List to Concurrent List:
 Education was originally included in the State List of the Constitution of India.
 Under the 42nd Amendment Act of 1976, education was transferred to the Concurrent List in the
Seventh Schedule, within the competency of both the Centre and the State Governments, but
with residual powers vesting with the Union Government. This implies that, in case of a conflict,
laws passed by the Parliament shall prevail over those made by State Legislatures, and that, any
State law shall be void to the extent of repugnancy.
 The implications of making education a concurrent subject is that both the Centre and the States
can legislate on any aspect of education from the Primary to the University level. This
amendment makes Central and State government equal partners in framing educational policies.
 Apex Institutions:
 Various apex institutions have been vested by Acts of Parliament with the responsibility to
regulate the standards of education.
 The University Grants Commission (UGC) is empowered to coordinate and maintain minimum
standards of university education.
 The National Assessment and Accreditation Council (NAAC) was established in 1994 to assess the
standards of quality and accredit Universities along with their constituent and affiliated colleges.

 The All India Council for Technical Education (AICTE) was established in 1987 for planned and
coordinated development of the technical education system in the country.
 The National Board of Accreditation (NAB) has been set up to assess and accredit technical
institutions in the country and make recommendations for recognition and de-recognition of
qualifications.
 Fundamental Rights:
 Several provisions relating to Fundamental Rights in the Constitution impact on education. Of
these, the most important are the Right to Education, Religious Instruction in Educational
Institutions and the Right of Minorities to Establish and Administer Educational Institutions.
 Article 28 provides for “Freedom of attendance at religious instruction or religious worship in
certain educational institutions” as a Fundamental Right.
 It mandates that no religious instruction shall be provided in any educational institution wholly
maintained out of State funds and that no minor person attending any State-recognized or State-
aided educational institution shall be required to take part in any religious instruction or attend
any religious worship without the consent of his guardian.
 However, this shall not apply to educational institutions which are administered by the State but
established under any endowment or trust which requires that religious instruction be imparted
in the institution.
 Article 29 (1) guarantees the protection of the linguistic rights of minorities. Any section of
citizens with their own distinct language, script or culture has the Fundamental Right to conserve
it.
 Under Article 29 (1), the Constitution recognizes the study and preservation of one’s mother
tongue as a Fundamental Right.
 Article 29 (2) provides, as a Fundamental Right, that no citizen shall be denied admission to any
educational institution maintained by the State or receiving aid out of State funds on grounds
only of religion, race, caste, language.
 Article 30 relates to cultural and educational rights of minorities. It lays down that all minorities,
whether based on religion or language, shall have the right to establish and administer
educational institutions of their choice.
 Constitutional Provisions for weaker sections:
 The Constitution makes special provision for safeguarding the educational interests of the
weaker, socially and educationally backward sections of society and members of Scheduled
Castes and Tribes.

 Article 15 empowers the State to make any special provision, by law, for the advancement of
socially and educationally backward classes of citizens or for the Scheduled Castes and Scheduled
Tribes with regard to their admission to educational institutions, including private educational
institutions, whether aided or unaided by the State, with the exception of minority educational
institutions.
 Article 46 enjoins the State, as a Directive Principle of State Policy, to promote the educational
and economic interests of the weaker sections of the people, and, in particular, of the Scheduled
Castes and the Scheduled Tribes with special care, and to protect them from social injustice and
all forms of exploitation.
 Right to Education Act (RTE), 2009:
 The RTE was originally included as a non-justifiable Right under the Directive Principles of State
Policy.
 The Constitution (Eighty-sixth Amendment) Act, 2002 inserted Article 21A in the Constitution as
a Fundamental Right, mandating that “The State shall provide free and compulsory education to
all children of the age of six to fourteen years in such manner as the State may, by law,
determine.”
 The consequential legislation envisaged to give effect to Article 21 A was: “The Right of Children
to Free and Compulsory Education Act, 2009 (RTE Act)”, giving every child the right to full time
elementary education of satisfactory and equitable quality in a formal school which satisfies
certain essential norms and standards.
 With this, education has been moved to a rights based framework with the Central and State
Governments having a legal obligation to implement this fundamental child right.
The RTE Act provides for the following:
 Right of children to free and compulsory education till completion of elementary education in a
neighbourhood school.
 Private schools will have to take 25% of their class strength from the weaker section and the
disadvantaged group of the society through a random selection process. Government will fund
education of these children.
 No child can be held back, expelled and required to pass the board examination till the
completion of elementary education.
 It lays down the norms and standards relating inter alia to Pupil Teacher Ratios (PTRs), buildings
and infrastructure, school-working days, teacher-working hours.

 It provides for appointment of appropriately trained teachers, i.e. teachers with the requisite
entry and academic qualifications.
 It prohibits (a) physical punishment and mental harassment; (b) screening procedures for
admission of children; (c) capitation fee; (d) private tuition by teachers and (e) running of schools
without recognition.
Recent updates:
Parliament passes Right of Children to Free and Compulsory Education (Amendment) Bill, 2017:
(August, 2017)
 Parliament has passed the Right of Children to Free and Compulsory Education (Amendment)
Bill, 2017 with Rajya Sabha approving it. Lok Sabha had passed it earlier.
 The amendments are aimed at ensuring that all teachers, in position as on 31st March, 2015,
acquire the minimum qualifications prescribed by the academic authority to extend the period
for such training for four years up to 31st March, 2019.
 The Provision to Section 23(2) of the RTE Act specifies that all teachers at elementary level
who, at the commencement of this Act, did not possess the minimum qualifications as laid
down under the RTE Act, need to acquire these within a period of five years i.e., 31st March,
2015 (This has been amended to give more time to the teachers).
The Union Cabinet has approved the scrapping of the "no-detention policy" in schools till Class VIII
(States have been given an option to decide).
 An enabling provision will be made in the Right of Children for Free and Compulsory Education
amendment bill which will allow states to detain students in class V and class VIII if they fail in
the year-end exam.
 However, the students will have to be given a second chance to improve via an examination
before detaining them.
 The move will allow states to evolve their own policy of detention from Class 5.
 Under the present provision of RTE Act, students are promoted automatically to higher classes
till class VIII.
 Elementary Education in India: Its present status and problems:
Annual Status of Education Report (ASER):

Every year since 2005, NGO Pratham brings out its Annual Status of Education Report (ASER) on the basis
of extensive household surveys conducted to assess children’s schooling status and basic learning levels
in reading and arithmetic.
Key points from the survey:
 Coverage of the survey in 2016: In 2016, the survey reached 589 rural districts. The survey was
carried out in 17,473 villages, covering 350,232 households and 562,305 children in the age group
3-16.
 The 2016 survey found that nearly half of the grade V students were not able to read at grade II
level; and nearly same proportion of grade V students did not have the basic arithmetic skills,
which they should have learned by the end of grade II (ASER, 2016).
 Total Enrollment: In 2013-14, the total enrolment at the elementary level (grades I-VIII) in India
was 19.89 crore, including 12.1 crore in government schools, and 1.1 crore in aided schools.
 Girls share in the enrollment: Girls share in the total enrolment was 48.2% at primary level, and
48.8% at upper primary level.
 Enrollment in the private schools: At the all India level, nearly 39% of children enrolled at the
elementary level were attending private schools.
 Enrollment in schools in rural India: ASER (Rural), 2016 found that 96.7% of children in the age
group 6- 14 years were enrolled in schools in rural India. The survey also found that around 31%
of rural children attend private schools.
Educational Outcomes have worsened except for enrollment:
% of children aged 6-14 not enrolled in school:
 Reading Outcomes: Reading is a foundational skill; without being able to read well, a child cannot
progress in the education system. However, reading outcomes are unacceptably poor,
particularly in Government and rural schools.
 For example, ASER 2016 found that over 75% of all children in Class 3, over 50% in Class 5 and
over 25% in Class 8 could not read texts meant for the Class 2 level.
 At the all-India level, the number of children in rural schools in Class 2 who could not even
recognize letters of the alphabet increased from 13.4% in 2010 to 32.5% in 2014.
 Basic Skills: Available data indicate that in 2014, nearly 20% of children in Class 2 did not recognize
numbers from 1 to 9 and nearly 40% of children in Class 3 were unable to recognize numbers till
100. More disturbingly these proportions have grown progressively and substantially since 2010,
indicating that learning outcomes are deteriorating rapidly at the primary stage.
 In sum, half of all children in Class 5 have not yet learned basic skills that they should have learned
by Class 2. Close to half of all children will finish eight years of schooling but will still not have
learned basic skills in arithmetic.
 Teacher absenteeism: Teacher absenteeism, estimated at over 25% every day, has been
identified as one of the reasons for the poor quality of student learning outcomes.
National Achievement Survey:
 At the disaggregated level, The National Council of Educational Research and Training (NCERT)
has conducted National Achievement Surveys (NAS) periodically since 2001 for Classes 3, 5 and
8.
 The NAS is a school-based national survey covering all States and Union Territories and focusing
on specific classes in particular years.
 It is carried out by NCERT under the mandate of the Sarva Shiksha Abhiyan programme to
“monitor improvement in children’s learning levels and to periodically assess the health of the
government education system as a whole.
 NAS reveals significant differences in the average achievement levels of students between states,
suggesting that the quality of educational outcomes is far from equal across the country.
Update: August, 2017:

 So far four rounds of National Achievement Survey (NAS) have been conducted for class V and
three rounds for classes III & VIII. These surveys give an insight into the learning achievements
of the students in various subjects.
 From 2018, the Government has also decided to conduct a National Achievement Survey with
the district area as its sample base and not the State as a unit.
 This will ensure that all districts are not only represented but the data will be robust to reflect
a decentralized picture of the quality of school education.

 Secondary and Higher Secondary Education in India (IX to XII):
 The main difficulties which remain at the level of secondary education in India are achieving a
GER of 100% by 2017 and universal retention by 2020.
 While the first target could be seriously addressed, it is highly doubtful if it would be possible to
retain the ‘retention’ target by 2020, even if major remedial steps are urgently undertaken.
 Current status: As per Unified-District Information System For Education (UDISE) 2015-16, the
Gross Enrolment Ratio (GER) of boys and girls at secondary level is 79.16 % and 80.97%
respectively and GER of boys and girls at Senior Secondary level is 55.95% and 56.41%
respectively.
 Hence there is no massive gap in GER of boys and girls at secondary and senior secondary level
in the country.
 Over the years, there has been significant and rapid increased participation of the private sector
and NGOs, in secondary education.
 Currently, approximately 51% of the secondary schools and 58% of the higher secondary schools
are privately managed.
 Gaps in average enrolments: From a quantitative standpoint, the gaps in average enrolments
between the general population and specific disadvantaged groups like the girl child, Scheduled
Castes and Scheduled Tribes, Minorities and Children with special needs have decreased.
 However, issues of social access and equity remain complex and have been only partially
resolved.
 Higher Education in India:
There has been an upsurge in the demand for higher education after independence, resulting in a virtual
explosion in the number of universities and colleges in the country.
The institutions of higher learning in India consist of:

1. Central Universities established by an Act of Parliament;
2. State Universities established by State Legislatures;
3. Deemed Universities recognized as such by the Central Government on the
recommendation of the UGC;
4. Private Universities established by various State Governments through their own
legislation; and
5. Institutes of National Importance declared as such by the Government of India by an
Act of Parliament.

 All these institutions are empowered to award degrees. A small number of Central and State
Universities are stand-alone unitary institutions; however, the vast majority has constituent or
affiliated colleges attached to them.
All India Survey on Higher Education (AISHE):
 To portray the status of higher education in the country, Ministry of Human Resource
Development has endeavoured to conduct an annual web-based All India Survey on Higher
Education (AISHE) since 2010-11.
 The survey covers all the Institutions in the country engaged in imparting of higher education.
Data is being collected on several parameters such as teachers, student enrolment, programmes,
examination results, education finance, infrastructure.
 Indicators of educational development such as Institution Density, Gross Enrolment Ratio, Pupil-
teacher ratio, Gender Parity Index, Per Student Expenditure will also be calculated from the data
collected through AISHE.
 These are useful in making informed policy decisions and research for development of education
sector.
The recent report available is All India Survey on Higher Education (AISHE) 2015-16. Important points
in the report are:
 Survey covers entire Higher Education Institutions in the country. Institutions are categorized in
3 broad Categories; University, College and Stand-Alone Institutions.
 There are 799 Universities, 39071 colleges and 11923 Stand Alone Institutions listed on AISHE
web portal and out of them 754 Universities, 33903 Colleges and 7154 Stand Alone Institutions
have responded during the survey. 268 Universities are affiliating i.e. having Colleges
 College density, i.e. the number of colleges per lakh eligible population (population in the age-
group 18-23 years) varies from 7 in Bihar to 60 in Telangana as compared to All India average of
28.
 60% Colleges are located in Rural Area. 11.1% Colleges are exclusively for Women.
 Gross Enrolment Ratio (GER) in Higher education in India is 24.5%, which is calculated for 18-23
years of age group. GER for male population is 25.4% and for females, it is 23.5%. For Scheduled
Castes, it is 19.9% and for Scheduled Tribes, it is 14.2% as compared to the national GER of 24.5%.

Note: The government has set a target of gross enrolment ratio (GER) in higher education of
30% by 2020.
 Scheduled Casts students constitute 13.9% and Scheduled Tribes students 4.9% of the total
enrolment. 33.75% students belong to Other Backward Classes. 4.7% students belong to Muslim
Minority and 1.97% from other Minority Community.
 The total number of foreign students enrolled in higher education is 45,424.
 There are more than 78% colleges running in Private sector; aided and unaided taken together,
but it caters to only 67% of the total enrolment.
 The estimated total number of teachers is 15,18,813. Out of which more than half about 61% are
male teachers and 39% are female teachers.
 At all-India level there are merely 64 female teachers per 100 male teachers.
 Pupil Teacher Ratio (PTR) in Universities and Colleges is 21 if regular enrolment is considered.
Global Ranking of Universities:
 The global ranking of universities is a useful indicator of their institutional performance, based
on a relative assessment in the areas of research and teaching, reputation of faculty members,
reputation among employers, resource availability, share of international students and activities
and other factors.
 Indian universities do not find a place in the top 200 positions in the global ranking of universities.
Even the top ranking institutions in India figure only in the lower echelons of global rankings.
 The Quacquarelli Symonds (QS) World University Rankings 2018 has been released. In the list,
three Indian universities have featured among the top 200 universities.
 The Indian Institute of Technology (IIT)-Bombay, IIT-Delhi and Indian Institute of Science (IISc),
Bengaluru, have featured in the top 200 global universities. For the first, three Indian institutions
have found a place in the list of top 200 universities in the QS Rankings
 IISc Bangalore has been placed at 190 from the152nd place secured last year. Similarly, IIT Delhi
have climbed from 185 to 172 and IIT Bombay has jumped from 219 to 179 this year. IISc has
been placed at 6th position among 959 universities for ‘Citations per Faculty’ in the 2018
rankings. For the first time, the Delhi University (DU) has entered the top 500 group.
 The Massachusetts Institute of Technology (MIT) has been ranked as the world’s best university
for the sixth consecutive year.

Trend in Gross Enrolment Ratio (GER): Gross Enrolment Ratio (GER) has increased during the last 5
years,from 20.8 in 2011- 12 to 24.5 in 2015-16. The increase is more under SC category which has
increased from 14.9 in 2011-12 to 19.9 in 2015-16. In case of ST category, the GER has increased from
11.0 to 14.2 during the period. In comparison to male, the increase in GER is higher for female.
The figures 51 and 52 depict the growth in GER for social category and for the two genders
respectively.
 Adult Education:
Education is the basis of the economic and cultural development of a country. The vast mass of people
living in rural areas forms the majority of the population of the country. If they remain illiterate, no
upliftment of the country is possible. Considerable progress has been made in Literacy rates of the
country but still the literacy levels remain uneven across different States, Districts, Social Groups and
Minorities. The Goal of Adult Education is to establish a Fully Literate Society through improved quality
and standard of Adult Education and Literacy.
National Literacy Mission Authority

 National Literacy Mission Authority (NLMA) has been set up as an independent and autonomous
wing of the Department of Secondary Education and Literacy to promote literacy and adult
education and to achieve the goals spelt out in the National Policy on Education.
 It is the operating and implementing organization at national level for all the activities envisaged
in National Literacy Mission and has to undertake such other activities for adult education as are
considered appropriate.
 To achieve the goal of Adult Education, the National Literacy Mission Authority is implementing
two schemes, namely, Saakshar Bharat Mission and Support to Voluntary Agencies for Adult
Education and Skill Development.
 National Education Policy of India: India had two policies on education in the past- in 1968 and
1986. It serves as a comprehensive framework to guide the development of education in the
country and offers the government of the day an opportunity to leave its imprint on the country’s
education system. The policy provides a broad direction and state governments are expected to
follow it. However, it’s not mandatory. For eg. Tamil Nadu, even today, does not follow the three-
language formula prescribed by the first education policy in 1968.
Key Legacies of NEP I and NEP II:
 The 10+2+3 (10 yrs secondary school + 2 years high school + 3 yrs of undergraduate education)
structure of education, and the three-language formula followed by a majority of schools are
among the most enduring legacies of the first national education policy.
 The prioritisation of science and mathematics in education is another.
 The Sarva Shiksha Abhiyan, Mid Day Meal Scheme, Navodaya Vidyalayas (NVS schools), Kendriya
Vidyalayas (KV schools) and use of IT in education are a result of the NEP of 1986.
Update: In 2016, a committee headed by TSR Subramanian had come up with a draft proposal for the
new education policy.
The significant recommendations of the panel are:
 An Indian Education Service (IES) should be established as an all India service with officers being
on permanent settlement to the state governments but with the cadre controlling authority
vesting with the Human Resource Development (HRD) ministry.
 The outlay on education should be raised to at least 6% of GDP without further loss of time.
Note: The public spending on education has been around 4% of GDP.
 The no detention policy must be continued for young children until completion of class V when
the child will be 11 years old. At the upper primary stage, the system of detention shall be
restored subject to the provision of remedial coaching and at least two extra chances being
offered to prove his capability to move to a higher class
 The mid-day meal (MDM) program should now be extended to cover students of secondary
schools. This is necessary as levels of malnutrition and anaemia continue to be high among
adolescents.

 UGC Act must be allowed to lapse once a separate law is created for the management of higher
education. The University Grants Commission (UGC) needs to be made leaner and thinner and
given the role of disbursal of scholarships and fellowships.
 Top 200 foreign universities should be allowed to open campuses in India and give the same
degree which is acceptable in the home country of the said university.
Update: June, 2017:

 The HRD ministry has appointed a new nine-member panel, headed by space
scientist Krishnaswamy Kasturirangan, to work on a New Education Policy (NEP).
 HRD ministry has chosen experts and educationists from wide-ranging backgrounds to be part
of the panel that is expected to recast India's education policy.
 The HRD ministry had a couple of years ago formed a panel under former cabinet secretary T
S R Subramanian on the New Education Policy. Inputs from the Subramanian panel report
would also be utilized.
 Schemes to address the issues and improve the status of elementary education in India:
 Sarva Siksha Abhiyan (SSA):
SSA has been operational since 2000-2001 to provide for a variety of interventions for universal access
and retention, bridging of gender and social category gaps in elementary education and improving the
quality of learning. It comes under Ministry of Human Resource Development.
Some of the salient features of the scheme are:
 The SSA covers all districts in the country in order to ensure access, retention and quality
improvement in elementary education.
 Provides funding for infrastructure (building), services (teachers), free textbook, bags, uniforms,
transport, hostel etc
 Objectives of this programme are: Open new schools in areas which do not have them and to
expand existing school infrastructures and maintenance.
 This scheme is being run with the support of World Bank.
2015-2016 2016-17 2016-17 2017-18

Actuals (cr) Budget estimates Revised estimates Budget estimates
(cr) (cr) (cr)

SSA 21661 22500 22500 23500
Shagun portal: It is an Initiative to monitor the implementation of SSA. ShaGun, a web portal (Derived
from the words Shaala and Gunvatta) is being developed by Ministry of HRD.
It has two components i.e. one is a Repository of best practices, photographs, videos, studies, newspaper
articles etc on elementary education, State /UT wise. The second part is regarding the online monitoring
of the SSA implemented by States and UTs and will be accessed by Government Officers at all levels
using their specific passwords.
In addition to these, the government is supporting States and UTs to implement national level
initiatives (sub parts of SSA) to improve the quality of education. These include;
The 'Padhe Bharat Badhe Bharat' (PBBB): It is a sub-programme of the SSA, in classes I and II focusing
on foundational learning in early grades with an emphasis on reading, writing and comprehension and
Mathematics.
The Rashtriya Avishkar Abhiyan (RAA): This aims to motivate and engage children of the age group 6-
18 years, in Science, Mathematics and Technology by observation, experimentation, inference drawing
and model building, through both inside and outside classroom activities. Schools have been adopted
for mentoring by Institutions of Higher Education like IIT’s, IISER’s and NIT’s.
Vidyanjali: This is sub-programme under SSA launched to enhance community and private sector
involvement in Government run elementary schools across the country under the overall aegis of the
SSA. The aim of the programme is to strengthen implementation of co-scholastic activities in
government schools through services of volunteers.
Mid Day Meal Scheme

With a view to enhancing enrolment, retention and attendance and simultaneously improving
nutritional levels among children, the National Programme of Nutritional Support to Primary Education
was launched as a centrally sponsored scheme on 15th August 1995. Under this scheme, all the State
governments and Union Territories provide cooked meals to school children from Government and
Government-aided schools.
Coverage: From 2008-09 onwards the programme covers all children study in class I to VIII in all areas
across the country.The Scheme was further revised in April 2008 to extend the scheme to recognized as
well as unrecognized Madarsas / Maqtabs supported under SSA.
Mothers are encouraged to take turns to oversee the feeding of the children, thus ensuring quality and
regularity of the meal.
Update: April, 2017:

Girl students up to class 12 in all Delhi government schools will get midday meal facility. The
government claimed that Delhi will become the “first state” in the country to serve midday meal up
to class 12. For this, the government will set aside Rs.50 crore.
Prashikshak Teacher Education Portal:
 Ministry of Human Resource Development has launched Prashikshak, a teacher education portal
in 2016 for a strong monitoring mechanism, which would contain a database of all 588 (District
Institute for Education and Trainings) DIETs in the country with all relevant information about the
institutes including performance indicators.
 The objective of Prashikshak is to help DIETs make informed decisions about their institutes,
compare the performance of their institute against other DIETs in the state/country as well as
help aspiring teachers make informed decisions about which institute to join.
 Schemes to address the issues and improve the status of secondary and higher secondary
education in India:
 Rashtriya Madhyamik Shiksha Abhiyan (RMSA):
 At the secondary stage the Rashtriya Madhyamik Shiksha Abhiyan (RMSA), is the most important
programme rolled out by the HRD Ministry.
 It has the twin aims of enhancing access to and improving the quality of secondary education in
the country.
 Enrolment is sought to be increased by providing a secondary school within a reasonable distance
of all habitations and by removing gender, socioeconomic and disability barriers to education.
 The prescribed infrastructural and physical facilities include adequate number of class rooms,
laboratories, libraries, art and crafts rooms, toilet blocks, drinking water availability, electricity
connection, telephone and internet connectivity and disabled friendly amenities.
 Equity aspects are sought to be addressed by according special focus on micro planning and
preference in opening schools in areas with concentrations of SC/ST/Minorities.
 Undertaking a special enrolment drive for the weaker sections, providing more female teachers
in schools and separate toilet blocks for girls are some of the significant strategies.

 Under the RMSA, the funding pattern between the Centre and the State Governments is in the
ratio of 75:25. For the North Eastern States, the Centre meets 90% of the funding requirements.
 In spite of this, the State universities and their affiliated colleges suffer from severe fund
constraints and poor governance, leading to poor quality of outcomes.
 The RMSA specially aims to improve access and retain the girl child in secondary and higher
secondary classes; and to ensure that girl students are not denied the opportunity to continue
their education due to distance from school, financial constraints and societal factors.
 The Scheme of Inclusive Education for Disabled at Secondary Stage (IEDSS), launched in 2009-
10, has now been subsumed under the RMSA.
 The Scheme provides assistance to enable all students with disabilities who have completed 8
years of elementary schooling, to pursue a further 4 years of secondary schooling from Class 9 to
12.
 With its specific focus on removing disabilities, the RMSA has opened up opportunities for
children who are not able to enrol themselves in the formal education system through the
modality of national and state open schools and by utilizing contact-centres and multi-media
packages.
2015-2016 2016-17 2016-17 2017-18

(cr) (cr) (cr)
RMSA 3563 3700 3700 3830
Some of the significant initiatives under RMSA for improving quality of education:
Shaala Siddhi: School Standards and Evaluation Framework and its web portal were launched on 7th
November 2015. Developed by the National University of Educational Planning and Administration
(NUEPA), it aims to enable schools to evaluate their performance in a more focused and strategic
manner and facilitate them to make professional judgments for improvement.
Shaala Darpan: The “Shaala Darpan Project” to cover all the 1099 Kendriya Vidyalayas was launched
in 2015. The objective of this project is to provide services based on School Management Systems to
Students, Parents and Communities.
e- PATHSHALA: It is a single point repository of e-resources containing, NCERT textbooks and various
other learning resources. It is a joint initiative of Ministry of Human Resource Development (MHRD),
Govt. of India and National Council of Educational Research and Training (NCERT) developed for
showcasing and disseminating all educational e-resources including textbooks, audio, video,
periodicals, and a variety of other print and non-print materials.
GIS MAPPING: To ensure universal access to schools including secondary schools within a reasonable
distance of any habitation and without any discrimination, the Geographic coordinates of school along
with the school information available in UDISE is being uploaded on the school GIS Web enabled
platform i.e. http://schoolgis.nic.in.
National Achievement Survey for Class X: The National Achievement Survey for Class X has been
undertaken for the first time by MHRD. A summary report on the National Achievement Survey (NAS)
Class X was submitted by NCERT to the Ministry on 4th January, 2016.
Seema Darshan: Ministry of HRD in collaboration with Ministry of Defence and Ministry of Home Affairs,
Govt. of India has organized “Seema Darshan” for students from Kendriya Vidyalayas and Navodaya
Vidyalayas during 22nd-26th January, 2016 during which students visited Akhnoor and Attari Borders.
SARAANSH: It allows the schools to identify areas of improvement in students, teachers and curriculum
to take remedial measures and monitor the progress of student.
Intended beneficiary: Students under CBSE schools in class IX, X, XI or XII
 Schemes to address the issues and improve the status of higher education in India:
 Rashtriya Uchhatar Shiksha Abhiyan
 The Rashtriya Uchchatar Shiksha Abhiyan (RUSA), launched in 2013, aims at providing strategic
funding to eligible state higher educational institutions on the basis of a critical appraisal of State
Higher Education Plans.
 The central 31 funding (in the ratio of 65:35 for general category States and 90:10 for special
category states) would be norm based and outcome dependent.
 The funding would flow from the MHRD through the State Governments / Union Territories to
the State Higher Education Councils before reaching the identified institutions.
2015-2016 2016-17 2016-17 2017-18
(cr) (cr) (cr)
RUSA 926 1300 1300 1300
Cabinet approves creation non-lapsable Madhyamik and Uchchtar Shiksha Kosh:
 The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has accorded its
approval for creation of a non-lapsable pool in the Public Account for secondary and higher,
education known as “Madhyamik and Uchchtar Shiksha Kosh” (MUSK) into which all proceeds
of “Secondary and Higher Education Cess” will be credited.
 The funds arising from the MUSK would be utilized for schemes in the education sector which
would be available for the benefit of students of secondary and higher education, all over the
country.
BHUVAN - RUSA PORTAL: The National Remote Sensing Centre (NRSC) of Indian Space Research
Organisation (ISRO) has developed a mobile application for uploading geo-tagged photographs and
associated details captured by the educational institutions, on Bhuvan-RUSA portal as a part of
implementation of Rashtriya Uchchatar Shiksha Abhiyan (RUSA) funded works.
NATIONAL DIGITAL LIBRARY

 A Project titled “Development of National Digital Library of India, towards building a National
Asset” has been sanctioned to IIT, Kharagpur under NMEICT.
 The objective is to provide access to the knowledge repository in terms of books, e-learning
material, encyclopedia, journals, monographs, reviews, research work, articles, Acts and other
knowledge material etc. for the benefit of learners/professionals/scholars and other interested
people especially located at as also to overcome the constraints of time and also finances.
SWAYAM
 SWAYAM (Study Webs of Active –Learning for Young Aspiring Minds) is an indigenous (Made in
India) IT Platform for hosting the Massive Open Online Courses (MOOCs) with a capacity to
revolutionize the education system by providing best quality education covering all the subjects
and courses being taught in the high schools, colleges and universities in the Country using the
IT system to the students even in the remotest corner of the Country.

 SWAYAM would provide High quality learning experience-using multimedia on anytime,
anywhere basis and provide one-stop web location for interactive e-content for all courses from
School to University level.
SWAYAM PRABHA
 The SWAYAM PRABHA has been conceived as the project for telecasting high quality educational
programmes through 32 DTH channels on 24X7 basis.
 Every day, there will be new content of at least (4) hours which would be repeated 6 times a day,
allowing the student to choose the time of his convenience.
National Academic Depository

In pursuance with Government's vision of Digital India and Commitment in the Budget Speech of 2016-
17, to establish a Digital Depository for school learning certificates, degrees and other academic awards
of Higher Education Institutions, on the pattern of a Securities Depository, Union Cabinet accorded its
approval for establishment and operationalisation of a National Academic Depository (NAD) on 27th
October 2016.
National Institutional Ranking Framework

 The first ever ‘India Rankings 2016’were announced on 4th April 2016.
 Under this system, institutions of higher education would be annually ranked based on objective
and verifiable criteria.
 The ranking framework evaluates each institution on 5 broad parameters, namely:
Teaching/learning resources, Research, Graduation outcomes, Outreach/Inclusive nature and
Public perception.
 The NIRF has been made available separately for Engineering, Management Pharmaceutical,
Architecture, Humanities, Law and for universities as a whole.
 The NIRF would allow ranking based on credible and verified data while capturing the major
performance parameters. Participation in the NIRF would help the Indian educational institutions
participate in the world rankings with greater confidence.

Update: NIRF Survey 2017 (This year it is second edition)
In the second edition of India Rankings, a total of 2995 institutions had participated. It included 232
Universities, 1024 Engineering Institutions, 546 Management Institutions, 318 Pharmacy Institutions
and 637 General Degree Colleges, and others. Many of these had participated in multiple disciplines,
adding to a total of 3319 participants across disciplines.
Toppers of India Rankings 2017 (NIRF 2017):

 Overall: Indian Institute of Science Bangalore
 Engineering: Indian Institute of Technology Madras
 Management: Indian Institute of Management Ahmedabad
 Universities: Indian Institute of Science Bangalore
 Colleges: Miranda House (Delhi)
 Pharmacy: Jamia Hamdard (Delhi)
Global Initiative of Academic Networks (GIAN)

The programme is aimed at tapping the talent pool of scientists and entrepreneurs, internationally to
encourage their engagement with the institutes of Higher Education in India so as to augment the
country’s existing academic resources, accelerate the pace of quality reform, and elevate India’s
scientific and technological capacity to global excellence.
INSPIRE
INSPIRE stands for Innovation in Science Pursuit for Inspired Research.
It is a scheme to attract talent to Science. Its objective is to communicate to the youth of the country
the excitements of creative pursuit of science. It does not believe in conducting competitive exams for
identification of talent at any level. It believes in and relies on the efficacy of the existing educational
structure for identification of talent.
INSPIRE has three components:
 Scheme for Early Attraction of Talent (SEATS) -> Awards and internships
 Scholarship for Higher Education (SHE) and
 Assured Opportunity for Research Careers (AORC) -> Fellowship and Faculty Scheme

Impacting Research Innovation and Technology (IMPRINT) India
 IMPRINT INDIA is a Pan-IIT and IISc joint initiative to develop a roadmap for research to solve
major engineering and technology challenges in ten technology domains relevant to India.
 IMPRINT INDIA aims at direct research in the premier institutions into areas of social relevance.
Vittiya Saksharata Abhiyan (VISAKA)

 The purpose of the `Vittiya Saksharta Abhiyan’ is to actively engage the youth/ students of Higher
Education Institutions to encourage and motivate all payers and payees to use a digitally enabled
cashless economic system for transfer of funds.
 Ministry of Human Resource Development views the institutions of higher education in the
country, faculty members and students to take the lead and act as engines of this
transformational shift.
Ishan Vikas and Ishan Uday: Ishan Uday -- ten thousand fresh scholarships (scholarships are provided in
general degree course, technical and professional courses including medical and para-medical courses.)
Ishan Vikas -- Select Engineering college students from northeast to be taken Premier institutes for
internships. (It gives exposure to students in premier institutes such as- [IITs, National Institutes of
Technology (NITs) and Indian Institutes of Science Education and Research (IISERs)]
Intended beneficiary: College going students in the 8 states of North East
 Update: August, 2017:
The Higher Education Financing Agency is set to take off soon:
 The Higher Education Financing Agency (HEFA) is set to take off soon, with the Ministry of Human
Resource Development (MHRD) asking Centrally funded higher education institutions to send
their project proposals to be financed by the agency.
 Funding from HEFA is expected to boost infrastructure, especially state-of-the-art laboratories,
in key institutions such as the Indian Institutes of Technology (IITs), the Indian Institutes of
Management (IIMs), and the Indian Institutes of Information Technology (IIITs).
 As per the funding mechanism, an institution can claim 10 times the sum it escrows in the first
year.
 The Union Cabinet had approved HEFA in September 2016 as a Special Purpose Vehicle with a
public sector bank (Canara Bank). It would be jointly funded by the promoter/bank and the MHRD
with an authorised capital of ₹2,000 crore. The government equity would be ₹1,000 crore.

 HEFA will leverage the equity to raise up to ₹20,000 crore for the funding of world-class
infrastructure at the IITs, IIMs, the National Institutes of Technology (NITs) and such other
institutions.
 The agency is also expected to mobilise Corporate Social Responsibility (CSR) funds from public
sector units (PSUs) and corporates. These would be released as grants to eligible institutions for
promoting research and innovation.
 Schemes for adult education:
Saakshar Bharat: Saakshar Bharat Programme goes beyond ‘3’ R’s (i.e. Reading, Writing & Arithmetic);
for it also seeks to create awareness of social disparities and a person’s deprivation on the means for its
amelioration and general well being. This programme was formulated in 2009 with the objective of
achieving 80% literacy level at national level, by focusing on adult women literacy seeking – to reduce
the gap between male and female literacy to not more than 10 percentage points.
Jan Shikshan Sansthan: Jan Shikshan Sansthans (JSSs) are established to provide vocational training to
non-literate, neo-literate, as well as school drop outs by identifying skills as would have a market in the
region of their establishment.
The Scope of Work of Jan Shikshan Sansthans (JSSs) will include the following:
 Develop/ Source appropriate curriculum and training modules covering vocational elements
general awareness and life enrichment components.
 Wherever possible, JSS are encouraged to undertake Training equivalent to courses designed by
the Directorate of Adult education, National Institute of Open Schooling and Director General
Employment & Training.
 Provide training to a pool of resource persons and master trainers for conducting training as also
availability of infrastructure and training – specific equipment.
 Schemes for Women Education:
Sarva Shiksha Abhiyan (SSA):
Bridging gender and social category gaps in elementary education is one of the four goals of SSA.
Consequently, SSA attempts to reach out to girls and children belonging to SC, ST and Muslim Minority
communities.
Kasturba Gandhi Balika Vidyalaya (KGBV)

These are residential upper primary schools for girls from SC, ST OBC and Muslim communities. KGBVs
are set up in areas of scattered habitations, where schools are at great distances and are a challenge to
the security of girls. This often compels girls to discontinue their education. KGBV addresses this through
setting up residential schools, in the block itself.
UDAAN-Giving wings to girl students:
In order to promote educational opportunities for girl students, CBSE under the guidance of the Ministry
of Human Resource and Development has launched the Udaan program, designed to provide a
comprehensive platform to deserving girl students who aspire to pursue higher education in
engineering, and assist them to prepare for the IIT JEE while studying in Classes XI and XII. UDAAN not
only mentors the girl students to compete in JEE, it also ensures a means for making payments towards
their fee for engineering courses.
Mahila Samakhya (MS): Mahila Samakhya is an ongoing scheme for women's empowerment that was
initiated in 1989 to translate the goals of the National Policy on Education into a concrete programme
for the education and empowerment of women in rural areas, particularly those from socially and
economically marginalized groups.
 Other Schemes:
E-BASTA scheme: eBasta is a framework to make school books accessible in digital form as e-books to
be read and used on tablets and laptops. The main idea is to bring various publishers (free as well as
commercial) and schools together on one platform. The framework, implemented as a portal, brings
together three categories of stakeholders: the publisher, the school and the student. It provides them
with the following primary functionalities:
Vidyalakshmi Loan Scheme: On the auspicious occasion of Independence Day (15 August,
2015), Finance Ministry launched "VIDYA LAKSHMI PORTAL" scheme. The main aim of Vidya Lakshmi
Portal is to provide easy and effective system to for students regarding educational loans. The portal has
been maintained and developed through NSDL e-Governance Infrastructure Limited under the guidance
of Department of Financial Services in the Finance Ministry, Department of Higher Education, Ministry
of Human Resource Development and Indian Banks Association.
Shala Ashmita Yojana:

The Union Ministry of Human Resource Development (HRD) has launched Shala Asmita Yojana, a
student educational tracking system programme in January, 2017.
ASMITA stands for All School Monitoring and Individual Tracking Analysis.
The scheme is basically a tracking system for over 25 Crore students from class 1st to 12th. Shala Asmita
Yojana aims to track the educational journey of school students from Class I to Class XII across the 15
lakhs private and government schools in the country. ASMITA will be an online database which will carry
information of student attendance and enrolment, learning outcomes, mid-day meal service and
infrastructural facilities.
Right To Light Scheme:

Right to Light Program is one such scheme by the central government where school going students will
get solar powered lamps for their study purpose in the evening or night. The program was launched in
UP (September, 2016) soon whereas the program has already launched in the states like Assam, Bihar,
Orissa and Jharkhand (July, 2016). In this programme the central government along with state
government has decided to distribute 1 Cr. solar lamps to the students. Students who live in below
poverty line are eligible for this scheme. Student must belong to Bihar, Orissa, Jharkhand and Assam
along with Uttar Pradesh.
 Important bills and programmes update:
Update: July, 2017:
 Indian Institutes of Information Technology (Public- Private Partnership) Bill, 2017:

Parliament has passed a bill to grant statutory status to the Indian Institutes of Information
Technology in private-partnership.
Key Facts:
 The Bill will declare the existing IIITs in PPPS as ‘Institutions of National Importance with powers
to award degrees.
 This coveted status will entitle them to use the nomenclature of Bachelor of Technology (B.Tech)
or Master of Technology (M.Tech) or Ph.D degree as issued by Institution or University of National
Importance.
 By granting formal degree, IIITs will enhance the prospects of graduating students in job market
and will also enable them to attract enough students to develop a strong research base in the
country in the field of IT.
 IITs earmark 14% special quota for girls from 2018:
 In order to address the decline of women candidates at the premier engineering institutions of
the country, the Indian Institutes of Technology have decided to admit more women from the
2018 academic session.
 The decision was taken at the Joint Admission Board (JAB) of the IITs. The board approved a quota
of supernumerary (over and above the actual intake) seats for women in a phased manner,
reaching up to 20% by 2026.
 Around 8.8% women were admitted to IITs in 2014, and the figure went up to 9% in 2015, but in
2016 it came down to 8%.
 Concerned by the slump in number of female students entering IITs, the JAB set up a panel under
the chairmanship of professor Timothy Gonsalves to find ways to rectify the situation in the
institutes.
 At present only 8% of IIT students are women. The IIMs too witnessed a three-year low of gender
diversity in 2016 despite ongoing efforts.
 Indian Institutes of Management Bill, 2017:
 The Lok Sabha has approved the Indian Institutes of Management Bill 2017 that promises to grant
administrative, academic and financial autonomy to the elite B-Schools and allow them to award
degrees to their graduates.
 India has 20 IIMs. The bill, which was approved by the cabinet in January, will grant greater
autonomy to these schools and ensure they are “board-driven, with the chairperson and director
selected by the board”.
 This means neither the human resource development (HRD) ministry nor the president of India
will have a say in the selection of top executives at these B-schools. The government will have no
say on the appointments or fees at these institutes.
 There will be a periodic, independent review of the IIMs, which would be allowed to award
degrees once the law is in place. Until now, since they haven’t been governed by an act of
Parliament nor overseen by the University Grants Commission (UGC), IIMs have been awarding
students post-graduate diplomas.
 The bill contains a provision for a “Coordination Forum of IIMs.” But it will have limited power
and work as an advisory body, consisting of 33 members, and its chairman will be selected by a
search-cum-selection committee. The HRD minister will not head it.
 The bill says the central government may frame rules to give additional powers and duties to IIM
boards and decide on the terms and condition of service of directors although the appointment
will be made by the board. It will notify the IIM coordination forum to be headed by an eminent
person.
 NITI Aayog has partnered with 6 states to transform Health & Education sectors:
 NITI Aayog has announced partnership with six states (with three states for health sector reforms
and three states for education sector reforms) under its Sustainable Action for Transforming
Human Capital (SATH) initiative.
 NITI Aayog has selected Uttar Pradesh, Assam, and Karnataka to improve healthcare delivery and
key outcomes in these States.
 For Education sector, Madhya Pradesh, Odisha, and Jharkhand have been selected for support to
better learning outcomes.
 SATH programme: Objective of this program is to identify and build three future ‘role model’
states for health and educations systems.
 NITI Aayog along with McKinsey & Company and IPE Global consortium will work in close
collaboration with administrative machinery and institutions in the selected states to accomplish
the end objectives.
 A Program Management Unit to push for efficiency and efficacy in governance structures and
service delivery will now be available in the six chosen States for a period of 36 months. It is
expected that these three years of focused attention and support from the premier think tank
will lead to a marked transformation and also provide a model for other States to replicate and
adapt.
Worksheet

2. True /False
3. MCQs
4. Match the column

Happy Learning!!!

Summary Sheet
ESI- Sustainable Development and
Environmental Issues
Important Points
videos and notes
Mock Test

 Sustainable development: What is it?
Sustainable development recognizes that growth must be both inclusive and environmentally sound to
reduce poverty and build shared prosperity for today’s population, and to continue to meet the needs
of future generations.
Three pillars of sustainable development: The three pillars of sustainable development – economic
growth, environmental stewardship, and social inclusion – carry across all sectors of development,
from cities facing rapid urbanization to agriculture, infrastructure, energy development and use, water
availability, and transportation.
In this document, we will be concentrating on environmental issues.
The entire document will be divided into following sections:

 Important Conventions and Protocols
 India’s National Action Plan on Climate Change (NAPCC)
 Pollution Related Acts
 Environment and Biodiversity Related Acts and Coastal Regulation Zone.
 Important Conventions and Protocols adopted during various Conferences:
Convention: Usually a treaty or international agreement between two parties, members or even
nations.
Protocol: A document that is legally binding that allows alterations and amendments to the main
treaty. It usually addresses specific issues.
 United Nations Conference on Environment and Development (UNCED):
The United Nations Conference on Environment and Development (UNCED), also known as the Earth
Summit was a major United Nations conference held in Rio de Janeiro from 3 to 14 June 1992. In 2012,
the United Nations Conference on Sustainable Development was also held in Rio, and is also commonly
called Rio+20 or Rio Earth Summit 2012.

The Earth Summit resulted in the following documents:
 Rio Declaration on Environment and Development
 Agenda 21
 Forest Principles
The following Conventions (Rio Convention) were opened for signature:
 Convention on Biological Diversity
 United Nations Framework Convention on Climate Change (UNFCCC)
 United Nations Convention to Combat Desertification
 Convention on Biological Diversity (CBD):
Biodiversity knows no political boundaries and its conservation is therefore a collective responsibility of
all nations. Convention on Biological Diversity (CBD) is a step towards conserving biological diversity or
biodiversity with the involvement of the entire world.
The convention called upon all nations to take appropriate measures for conservation of biodiversity
and sustainable utilization of its benefits. All UN member states—with the exception of the United
States—have ratified the treaty.
The Convention has three main goals:

 Conservation of biological diversity (or biodiversity)
 Sustainable use of its components
 Fair and equitable sharing of benefits arising from genetic resources.
Meeting of the parties to the convention (Important Conference of Parties):
Conference of Parties (CoP):

Conference of Parties is the governing body of the Convention and advances the implementation of
the convention through the decisions it takes at its periodic meetings.
The meeting of the parties to the Convention on Biological Diversity takes place every two years. On 29
January 2000, the Conference of the Parties to the Convention on Biological Diversity adopted a
supplementary agreement to the Convention known as the Cartagena Protocol on Biosafety. At the
2010 10th Conference of Parties (COP) to the Convention on Biological Diversity in October in Nagoya,
Japan, the Nagoya Protocol was adopted.

 Cartagena Protocol
The Cartagena Protocol on Biosafety (CPB), the first international regulatory framework for safe transfer,
handling and use of Living Modified Organisms (LMOs). The Biosafety Protocol seeks to protect biological
diversity from the potential risks posed by genetically modified organisms resulting from modern
biotechnology.
Living Modified Organism (LMO):

Living modified organism is defined as any living organism that possesses a novel combination of
genetic material obtained through the use of modern biotechnology.
 Nagoya Protocol
The Nagoya Protocol is about “Access to Genetic Resources and the Fair and Equitable Sharing of
Benefits Arising from their Utilization”, one of the three objectives of the CBD. The Protocol was
adopted on 29 October 2010 in Nagoya, Japan, and entered into force on 12 October 2014. It has been
ratified by 60 parties. The Nagoya Protocol is intended to create greater legal certainty and
transparency for both providers and users of genetic resources.
Genetic resources (GRs):

Genetic resources (GRs) refer to genetic material of actual or potential value. Genetic material is
any material of plant, animal, microbial or other origin containing functional units of heredity.
Examples include material of plant, animal, or microbial origin, such as medicinal plants,
agricultural crops and animal breeds.
 The International Treaty on Plant Genetic Resources for Food and Agriculture:
This treaty was adopted by the Thirty-First Session of the Conference of the Food and Agriculture
Organization of the United Nations on 3 November 2001. It is popularly known as the International Seed
Treaty.

The Treaty aims at: Recognizing the enormous contribution of farmers to the diversity of crops that feed
the world; Establishing a global system to provide farmers, plant breeders and scientists with access to
plant genetic materials; Ensuring that recipients share benefits they derive from the use of these genetic
materials with the countries where they have been originated.
 UNFCCC: United Nations Framework Convention on Climate Change:

The United Nations Framework Convention on Climate Change (UNFCCC) is an international
environmental treaty.
The objective of the treaty is: To "stabilize greenhouse gas concentrations in the atmosphere at a level
that would prevent dangerous anthropogenic interference with the climate system“. The treaty itself
set no binding limits on greenhouse gas emissions for individual countries. As of March 2014, UNFCCC
has 196 parties (almost all countries).
Meeting of the parties to the convention (Important Conference of Parties):
 The parties to the convention have met annually since 1995.

 The first COP meeting was held in Berlin, Germany in March, 1995.
 In 1997, the Kyoto Protocol (3rd COP) was concluded and established legally binding obligations
for developed countries to reduce their greenhouse gas emissions.
 The 2010 Cancun agreement stated that future global warming should be limited to below 0
°C (3.6 °F) relative to the pre-industrial level.
 The 21st COP (2015) was held in Paris in 2015.
 The 22nd COP (2016) will be held at Marrakesh, Morocco.
Important article under UNFCCC: Article 3(1) states that Parties should act to protect the climate system
on the basis of "common but differentiated responsibilities", and that developed country Parties should
"take the lead" in addressing climate change.
Common But Differentiated Responsibilities (CBDR):

 It puts the obligation to reduce current emissions on developed countries on the basis that
they are historically responsible for the current levels of greenhouse gases in the
atmosphere.
 CBDR divides countries into two categories.

 Historically biggest polluting developed countries like US, UK, France, Japan, Russia etc.
(they are polluting the earth since Industrial Revolution).
 Recently polluting developing countries like China, India, Brazil, etc. (polluting since 1950s).
 “Common” in Common But Differentiated Responsibility means every country (both
developing and developed) must take part in the fight against climate change.
 “But differentiated responsibilities” means historically biggest polluters should do more
compared to the recent polluters that is responsibilities proportional to pollution caused.
 Kyoto protocol:
 The Kyoto Protocol is an international agreement linked to the United Nations Framework
Convention on Climate Change, which commits its Parties by setting internationally binding
emission reduction targets.
 Recognizing that developed countries are principally responsible for the current high levels of
GHG emissions in the atmosphere as a result of more than 150 years of industrial activity, the
Protocol places a heavier burden on developed nations under the principle of "common but
differentiated responsibilities."
 The Kyoto Protocol was adopted in Kyoto, Japan, on 11 December 1997 and entered into force
on 16 February 2005.
 The detailed rules for the implementation of the Protocol were adopted at COP 7 in Marrakesh,
Morocco, in 2001, and are referred to as the "Marrakesh Accords."
 There are currently 192 Parties to the protocol. USA never ratified Kyoto Protocol.
Canada withdrew in 2012.
Commitment period of Kyoto Protocol: There are two commitment periods of Kyoto Protocol: The first
commitment period under the Kyoto Protocol was from 2008-2012. The second commitment period of
the Kyoto Protocol or Doha Amendment for 2013-2020 period was adopted in 2012. (In Doha, Qatar, on
8 December 2012, the "Doha Amendment to the Kyoto Protocol" was adopted.)
India related update: (August, 2017)

 India has ratified the second commitment period of the Kyoto Protocol that commits countries
to contain the emission of greenhouse gases, reaffirming its stand on climate action.
 India deposited its Instrument of Acceptance of the Doha Amendment to the Kyoto Protocol
under the UN Convention on Climate Change.
 With this, India became the 80th country to accept the amendment relating to the second
commitment period of the Kyoto Protocol, the international emissions reduction treaty.

 India’s ratification of the Kyoto Protocol will encourage other developing countries also to
undertake this exercise.
Classification of Parties: Kyoto Protocol:
 Annex I: Developed countries (US, UK, Russia etc) + Economies in transition (EIT) (Ukraine,
Turkey, some eastern European countries etc)
 Annex II: Developed countries. Annex II is a subset of Annex I. Required to provide financial and
technical support to the EITs and developing countries to assist them in reducing their
greenhouse gas emissions.
 Annex B: Annex I Parties with first or second-round Kyoto greenhouse gas emissions targets. The
first-round targets apply over the years 2008–2012 and the second-round Kyoto targets, which
apply from 2013–2020. They have compulsory binding targets to reduce GHG emissions.
 Non-Annex I: Parties to the UNFCCC not listed in Annex I of the Convention are mostly low-
income developing countries. No binding targets to reduce GHG emissions.
 LDCs: Least-developed countries. No binding targets to reduce GHG emissions.
 Developing countries may volunteer to become Annex I countries when they are sufficiently
developed.
The Kyoto Protocol emission target gases include:

 Carbon dioxide (CO2),
 Methane (CH4),
 Nitrous oxide (N2O),
 Sulphur Hexafluoride (SF6),
 Groups of hydro fluorocarbons (HCFs) and
 Groups of Per fluorocarbons (PFCs).
Flexible Market Mechanisms – Kyoto Protocol: Countries bound to Kyoto targets have to meet them
largely through domestic action— that is, to reduce their emissions onshore. But they can meet part of
their targets through three “market-based mechanisms”: Clean Development Mechanism (CDM);
Emission Trading; Joint Implementation (JI).

Clean Development Mechanism (CDM) – Kyoto Protocol
 The Clean Development Mechanism (CDM), defined in the Kyoto Protocol, allows a country with
an emission-reduction or emission-limitation commitment under the Kyoto Protocol (Annex B
Party) to implement an emission-reduction project in developing countries.
 Such projects can earn saleable certified emission reduction (CER) credits, each equivalent to one
tonne of CO2, which can be counted towards meeting Kyoto targets.
 Developed countries emit more and lose carbon credits. They provide financial assistance to
developing and least developed countries to create clean energy (solar, wind energy etc.) and
gain some carbon credits to meet their Kyoto Quota (Kyoto units) of emissions without violations.
Joint Implementation (JI) – Kyoto Protocol
 The mechanism known as “joint implementation,” allows a country with an emission reduction
commitment under the Kyoto Protocol (Annex B Party) to earn emission reduction units (ERUs)
from an emission-reduction project in another Annex B Party, each equivalent to one tonne of
CO2, which can be counted towards meeting its Kyoto target.
International Emissions Trading:
 Emissions trading, allows countries that have emission units to spare - emissions permitted to
them but not "used" - to sell this excess capacity to countries that are over their targets. Thus, a
new commodity was created in the form of emission reductions or removals. Carbon is now
tracked and traded like any other commodity. This is known as the "carbon market."
Non-Compliance of Kyoto and Penalties: If a country does not meet the requirements for
measurements and reporting said country loses the privilege of gaining credit through joint
implementation projects. If a country goes above its emissions cap, and does not try to make up the
difference through any of the mechanisms available, then said country must make up the difference plus
an additional thirty percent during the next period.
 Important Summits:

 Lima Summit, 2014
COP20 or CMP10 or Lima Summit was held in Lima, Peru, in December 2014. 2014 United Nations
Climate Change Conference is the 20th yearly session of the Conference of the Parties (COP 20) to the
1992 United Nations Framework Convention on Climate Change (UNFCCC) and the 10th session of the
Meeting of the Parties (CMP 10) to the 1997 Kyoto Protocol.
The overarching goal of the conference was to reduce greenhouse gas emissions (GHGs) to limit the
global temperature increase by 2030 to 2 degrees Celsius above 1850 baseline or Pre Industrial era. No
agreement was reached due to lack of consensus between developed and developing countries.
Last-minute deal to end the impasse at Lima Summit:
The last minute deal urged developed countries to provide financial support to developing countries to
meet their “ambitious mitigation” goals (Slightly in favor of Common But Differentiated Responsibility).
The agreement urges parties to take national pledges by finalizing their Intended Nationally Determined
Contributions (INDC) by November 2015 (Before Paris Summit).
Intended Nationally Determined Contributions (INDCs) is a term used under the United Nations
Framework Convention on Climate Change (UNFCCC) for reductions in greenhouse gas
emissions that all countries that signed the UNFCCC were asked to publish in the lead up to the 2015
United Nations Climate Change Conference held in Paris, France in December 2015.
 Paris summit, 2015
2015 United Nations Climate Change Conference (COP 21 or CMP 11) took place from November 30 to
December 11, 2015 in Paris. Paris Summit is one of the most important environmental conferences
because of the INDC commitments made by major polluters. The conference objective is to achieve a
legally binding and universal agreement on climate to be signed in 2015, and implemented by 2020.
Prior to the conference, 146 national climate panels publicly presented draft national climate
contributions (so-called Intended Nationally Determined Contributions, INDCs).

The aims of Paris Agreement are as below:
 Keep the global temperature rise this century well below 2 degrees Celsius above the pre-
industrial level.
 Pursue efforts to limit the temperature increase even further to 1.5 degrees Celsius.
 Strengthen the ability of countries to deal with the impacts of climate change.
Salient Features:
 Paris Accord talks about limiting the amount of greenhouse gases emitted by human activity to
the same levels that trees, soil and oceans can absorb naturally, beginning at some point between
2050 and 2100.
 It also mentions the need to review each country’s contribution to cutting emissions every five
years so they scale up to the challenge.
 Rich countries should help poorer nations by providing “climate finance” to adapt to climate
change and switch to renewable energy.
 In 2018, Parties will take stock of the collective efforts in relation to progress towards the goal
set in the Paris Agreement.
 There will also be a global stock take every 5 years to assess the collective progress towards
achieving the purpose of the Agreement and to inform further individual actions by Parties.
 India’s Intended Nationally Determined Contributions:
 It was announced in October, 2015 (Lima summit urged every country to announce its INDCs by
Nov, 2015)
 Reduce emission intensity by 33 to 35 per cent by 2030 compared to 2005 levels.
Emission intensity:
Emission intensity is the volume of emissions per unit of GDP. Reducing emission intensity means
that less pollution is being created per unit of GDP.
 Produce 40 per cent of electricity from non-fossil fuel based energy resources by 2030, if
international community helps with technology transfer and low cost finance.
 Create an additional carbon sink of 2.5 to 3 billion tonnes of carbon dioxide equivalent by 2030
through additional forest and tree cover.
Paris Agreement to enter into force:

The agreement would come into force thirty days after the date on which at least 55 Parties to the
Convention accounting in total for at least an estimated 55 % of the total global greenhouse gas
emissions have deposited their instruments of ratification, acceptance, approval or accession with the
Depositary.
India has ratified the Paris Agreement on climate change on the 147th birth anniversary of Mahatma
Gandhi (2nd October, 2016). On 5 October 2016, the threshold for entry into force of the Paris
Agreement was achieved. The Paris Agreement came into force on 4 November 2016. To date the Paris
Agreement has been signed by 194 Parties and ratified or otherwise joined by 159 Parties
representing 68% of global emissions.
Money required to achieve India’s INDC:
At least USD 2.5 trillion (at current prices) is required between now and 2030 to implement all planned
actions. A total of INR 170.84 billion is collected through cess on coal production. This is being used for
funding clean energy projects. National Adaptation Fund has been created with initial allocation of Rs
3500 million. Tax free infrastructure bonds of INR 50 billion being introduced for funding renewable
energy projects.
 International Solar Alliance: India and France had launched International Solar Alliance (ISA) at
the Conference of Parties (CoP21) Climate Conference in Paris, France. The idea of alliance was
mooted by Indian PM Narendra Modi to harness solar power as a major step to mitigate carbon
gas emissions.
Salient Features: Aims to bring solar rich 121 tropical countries located fully or partly between the Tropic
of Cancer and Capricorn together to tap solar energy. These tropical countries are potential members
of alliance and shall be united by the shared vision to bring clean, renewable solar energy within the
reach of all. It will function from the Gurgaon based National Institute of Solar Energy (NISE).
Recent update related to Paris Climate Change Agreement: June, 2017:
President Donald Trump has announced that the United States is set to withdraw from the historic
2015 Paris Accord as the accord was hurting his country and economy very badly. However, he has
said that he is open for a “new transaction” on terms that are fair to the US.

 India’s emission profile compared to other countries:
 United Nations Convention to Combat Desertification (UNCCD):
UNCCD is a Convention to combat desertification and mitigate the effects of drought through national
action programs (NAP). NAP incorporates long-term strategies supported by international cooperation
and partnership arrangements. It is the only internationally legally binding framework set up to address
the problem of desertification.
 Montreal Protocol:
The Montreal Protocol is an international treaty designed to protect the ozone layer. It came into force
in 1989. It aims at reducing the production and consumption of ozone depleting substances (ODS) in
order to protect the earth’s fragile ozone layer.
It has been ratified by 197 parties making it universally ratified protocol in United Nations history. India
became its signatory member on 19th June 1992. It is also highly successful international arrangement,
as it has phased-out more than 95% of the ODS so far in its main mandate less than 30 years of its
existence. With International cooperation this treaty has successfully led the phase-out operation of
production & consumption of major Ozone Depleting Substance (ODS) viz. CFCs, HCFCs, Carbon
tetrachloride (CTC) and Halons globally in span of 27 years.
Kigali Agreement:
 A historic global climate deal was reached in Kigali, Rwanda at the Twenty-Eighth Meeting of the
Parties to the Montreal Protocol on Substances that Deplete the Ozone Layer (MOP28) in
November, 2016.
 The Kigali Amendment which amends the 1987 Montreal Protocol aims to phase out
Hydrofluorocarbons (HFCs), a family of potent greenhouse gases by the late 2040s.
 Under Kigali Amendment, in all 197 countries, including India have agreed to a timeline to reduce
the use of HFCs by roughly 85% of their baselines by 2045.
Hydrofluorocarbons (HFCs)
HFCs are a family of greenhouse gases (GHGs) that are largely used in refrigerants in home,
car air-conditioners and air sprays etc. These factory-made gases had replaced CFCs under
the 1987 Montreal Protocol to protect Earth’s fragile protective Ozone layer and heal the
ozone hole over the Antartica.
 The Kigali Agreement or amended Montreal Protocol for HFCs reduction will be binding on
countries from 2019.
 Countries like India, Pakistan, Pakistan, Iran, Saudi Arabia will be freezing HFC use by 2028 and
reducing it to about 15% of 2025 levels by 2047.
 Intergovernmental Panel on Climate Change: It is a scientific intergovernmental body under the
auspices of the United Nations. It was first established in 1988 by two United Nations
organizations, the World Meteorological Organization (WMO) and the United Nations
Environment Programme (UNEP). Membership of the IPCC is open to all members of the WMO
and UNEP. The IPCC produces reports that support the United Nations Framework Convention
on Climate Change (UNFCCC).
 Other Important Organizations:

 The World Wide Fund for Nature: The World Wide Fund for Nature (WWF) is an international
non-governmental organization founded on April 29, 1961, and is working on issues regarding
the conservation, research and restoration of the environment. The group's mission is "to stop
the degradation of the planet’s natural environment and to build a future in which humans live
in harmony with nature."
 The Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES):
 CITES (the Convention on International Trade in Endangered Species of Wild Fauna and Flora is
an international agreement between government entered into force in 1975.
 It is the only treaty to ensure that international trade in plants and animals does not threaten
their survival in the wild.
 CITES is administered through United Nations Environment Programme (UNEP).
 Roughly 5,000 species of animals and 29,000 species of plants are protected by CITES against
overexploitation through international trade.
 CITES works by subjecting international trade in specimens of selected species to certain controls.
 All import, export, re-export and introduction covered by the Convention has to be authorized
through a licensing system.
 TRAFFIC – The Wildlife trade monitoring network:

 TRAFFIC, the wildlife trade monitoring network, is an international organization dedicated to
ensuring that trade in wild plants and animals is not a threat to the conservation of nature.
 TRAFFIC is a joint programme of World Wide Fund for Nature (WWF) and the World Conservation
Union (IUCN).
 TRAFFIC also works in close co-operation with the Secretariat of the Convention on International
Trade in Endangered Species of Wild Fauna and Flora (CITES).
 Founded in 1976, TRAFFIC’s headquarters are now located in Cambridge, United Kingdom
 India's National Action Plan On Climate Change
 India’s National Action Plan on Climate Change (NAPCC) was launched in 2008.
 Government is implementing the National Action Plan on Climate Change (NAPCC) with a view
to enhance the ecological sustainability of India’s development path and address climate change.

There are Eight National Missions which form the core of the National Action Plan:
1. National Solar Mission

2. National Mission For Enhanced Energy Efficiency (NMEEE)
3. National Mission On Sustainable Habitat
4. National Water Mission (NWM)
5. National Mission For Sustaining The Himalayan Ecosystem (NMSHE)
6. National Mission For A Green India
7. National Mission For Sustainable Agriculture (NMSA)
8. National Mission on Strategic Knowledge for Climate Change (NMSKCC)
 Pollution Related Acts

 The Water (Prevention and Control of Pollution) Act of 1974 and Amendment, 1988
The main objective of this act is to provide prevention and control of water pollution.
Some important provisions of this Act are given below:
The Act vests regulatory authority in State Pollution Control Boards to establish and enforce effluent
standards for factories. A Central Pollution Control Board performs the same functions for Union
Territories and formulates policies and coordinates activities of different State Boards. The Act grants
power to SPCB and CPCB to test equipment and to take the sample for the purpose of analysis.
 The Air (Prevention and Control of Pollution) Act of 1981 and amendment, 1987
The main objectives of this Act are to improve the quality of air and to prevent, control and abate air
pollution in the country.
Important provisions of this Act: The Air Act’s framework is similar to that of the Water Act of 1974.
The Air Act expanded the authority of the central and state boards established under the Water Act, to
include air pollution control. Under the Air Act, all industries operating within designated air pollution
control areas must obtain “consent” (permit) from the State Boards.
 Environment & Biodiversity Acts:

The most important legislation in this category is The Environment (Protection) Act of 1986. Through
this Act Central Government gets full power for the purpose of protecting and improving the quality of
the environment.
 Environment (Protection) Act of 1986:
The Act is an “umbrella” for legislations designed to provide a framework for Central Government,
coordination of the activities of various central and state authorities established under previous Acts,
such as the Water Act and the Air Act.
In this Act, main emphasis is given to “Environment”, defined to include water, air and land and the
inter-relationships which exist among water, air and land and human beings and other living creatures,
plants, micro-organisms and property.
The main provisions of this Act are given below:
 The Act explicitly prohibits discharges of environmental pollutants in excess of prescribed

regulatory standards.
 There is also a specific prohibition against handling hazardous substances except those in
compliance with regulatory procedures and standards.
 The Act provides provision for penalties. For each failure or contravention the punishment
included a prison term up to five years or fine up to Rs. 1 lakh, or both.
 The Act imposed an additional fine of up to Rs. 5,000 for every day of continuing violation.
 If a failure or contravention occurs for more than one year, offender may be punished with
imprisonment which may be extended to seven years.
 This “Citizens’ Suit” provision requires that the person has to give notice of not less than 60 days
of the alleged offence of pollution to the Central Government.
 Genetic Engineering Appraisal Committee (GEAC)
The Genetic Engineering Appraisal Committee (GEAC) is the apex body constituted in the Ministry of
Environment and Forests under 'Rules for Manufacture, Use, Import, Export and Storage of Hazardous
Microorganisms/Genetically Engineered Organisms or Cells 1989', under the Environment Protection
Act, 1986. Aim of ‘Rules 1989’ is to protect environment, nature and health in connection with
application of gene technology and micro-organisms.
 Wild Life (Protection) Act of 1972 and Amendment, 1982
In 1972, Parliament enacted the Wild Life Act (Protection) Act. Harming endangered species listed
in Schedule 1 of the Act is prohibited throughout India. Hunting species, like those requiring special
protection (Schedule II), big game (Schedule III), and small game (Schedule IV), is regulated through
licensing. A few species classified as vermin (Schedule V), may be hunted without restrictions. Wildlife
wardens and their staff administer the act. An amendment to the Act in 1982, introduced a provision
permitting the capture and transportation of wild animals for the scientific management of animal
population.
 The Wild Life (Protection) Amendment Act, 2006

The Act provides for creating
 National Tiger Conservation Authority and
 Tiger and Other Endangered Species Crime Control Bureau (Wildlife Crime Control Bureau).
 Animal Welfare Board of India: Statutory advisory body advising the Government of India on
animal welfare laws, and promotes animal welfare in the country of India. It works to ensure that
animal welfare laws in the country are followed; provides grants to Animal Welfare
Organizations; and considers itself "the face of the animal welfare movement in the country." It
was established in 1960 under Section 4 of The Prevention of Cruelty to Animals Act, 1960. The
subject of Prevention of Cruelty to Animals is under Ministry of Environment and Forests.
Update: March, 2017:
 The Animal Welfare Board of India (AWBI), will now be permanently chaired by a senior MoEF
official, according to a notification made public by the government.
 The notification specifies that for the next three years, the Board would be chaired by the Director-
General (Forests) for its term.
 In its 55-year history the organization has always been chaired by somebody outside government,
such as veterinarians, animal welfare activists or retired judges. This is the first time that a
government official is chairing the body.

Indian government has also started some conservation projects for individual endangered species like
Hungal (1970), Lion (1972), Tiger (1973), Crocodiles (1974), Brown-antlered Deer (1981) and Elephant
(1991-92).
India Rhino Vision 2020: It is a partnership the Assam Forest Department, World Wide Fund for Nature
(WWF), Bodoland Territorial Council, International Rhino Foundation (IRF) and US Fish and Wildlife Service.
Its goal is to attain a wild rhino population of at least 3,000 in the Indian state of Assam by the year 2020.
 Forest (Conservation) Act of 1980:
First Forest Act was enacted in 1927. Alarmed at India’s rapid deforestation and resulting environmental
degradation, Centre Government enacted the Forest (Conservation) Act in 1980. It was enacted to
consolidate the law related to forest, the transit of forest produce and the duty livable on timber and
other forest produce. Forest officers and their staff administer the Forest Act.
Under the provisions of this Act, prior approval of the Central Government is required for diversion of
forestlands for non-forest purposes. The Act deals with the four categories of the forests, namely
reserved forests, village forests, protected forests and private forests.
Biodiversity Act 2000: The legislation aims at regulating access to biological resources so as to
ensure equitable sharing of benefits arising from their use. The Biological Diversity Bill was introduced
in the Parliament in 2000 and was passed in 2002.
Salient features of the biodiversity legislation are:
 This bill seeks to check biopiracy, protect biological diversity and local growers through a three-
tier structure of central and state boards and local committees.
 The Act provides for setting up of a National Biodiversity Authority (NBA), State Biodiversity
Boards (SBBs) and Biodiversity Management Committees (BMCs) in local bodies. The NBA will
enjoy the power of a civil court.
 All foreign nationals or organizations require prior approval of NBA for obtaining biological
resources and associated knowledge for any use.
 Indian individuals/entities require approval of NBA for transferring results of research with
respect to any biological resources to foreign nationals/organizations.

 Before applying for any form of IPRs (Intellectual Property Rights) in or outside India for an
invention based on research on a biological resource obtained from India, prior approval of NBA
will be required.
 The monetary benefits, fees, royalties as a result of approvals by NBA will be deposited
in National Biodiversity Fund.
 The Scheduled Tribes and Other Traditional Forest Dwellers (Recognition Of Forest Rights) Act,
2006:
Forest Rights Act, 2006 provides for the restitution of deprived forest rights across India. The Act is
provides scope of integrating conservation and livelihood rights of the people.
Salient Features
Nodal Agency for the implementation is Ministry of Tribal Affairs (MoTA). This Act is applicable for Tribal
and Other Traditional Forest Dwelling Communities.
The Act provides for recognition of forest rights of other traditional forest dwellers provided they have
for at least three generations prior to 13.12.2005 primarily resided in and have depended on the forests
for bonafide livelihood needs. The maximum limit of the recognizing rights on forest land is 4 ha.
The Act recognizes the right of ownership access to collect, use, and dispose of minor forest produce by
tribals. Minor forest produce includes all non-timber forest produce of plant origin, including bamboo,
brush wood, stumps, cane, tussar, cocoons, honey, wax, lac, leaves, medicinal plants and herbs, roots,
tubers and the like. As per the Act, the Gram Sabha has been designated as the competent authority for
initiating the process of determining the nature and extent of individual or community forest rights.
 National Green Tribunal Act, 2010
Act of the Parliament of India which enables creation of NGT to handle the expeditious disposal of the
cases pertaining to environmental issues. The specialized architecture of the NGT will facilitate fast track
resolution of environmental cases and provide a boost to the implementation of many sustainable
development measures. NGT is mandated to dispose the cases within six months of their respective
appeals.

The Chairman of the tribunal who is the administrative head of the tribunal also serves as a judicial
member. The Chairman of the tribunal is required to be a serving or retired Chief Justice of a High Court
or a judge of the Supreme Court of India.
The Tribunal has Original Jurisdiction on matters of “substantial question relating to environment” (i.e.
a community at large is affected, damage to public health at broader level) & “damage to environment
due to specific activity” (such as pollution).
 Acts for Protecting Coastal Environment and Wetlands
 Coastal Regulation Zone (CRZ)
The coastal stretches of seas, bays, estuaries, creeks, rivers and back waters which are influenced by
tidal action are declared "Coastal Regulation Zone" (CRZ) in 1991. India has created institutional
mechanisms such as National Coastal Zone Management Authority (NCZMA) and State Coastal Zone
Management Authority (SCZMA) for enforcement and monitoring of the CRZ Notification.
These authorities have been delegated powers under Section 5 of the Environmental (Protection) Act,
1986 to take various measures for protecting and improving the quality of the coastal environment and
preventing, abating and controlling environmental pollution in coastal areas.
 Wetlands (Conservation and Management) Rules 2010
MoEF has notified the rules in order to ensure that there is no further degradation of wetlands. The rules
specify activities which are harmful to wetlands such as industrialization, construction, dumping of
untreated waste and reclamation and prohibit these activities in the wetlands. Under the Rules,
wetlands have been classified for better management and easier identification. Central Wetland
Regulatory Authority has been set up to ensure proper implementation of the Rules.
Worksheet

2. True /False
3. MCQs
4. Match the column
Happy Learning!!!

Summary Sheet
Gender Issues
Important Points
videos and notes
Mock Test

 What is Gender Equality? Gender equality refers to the equal rights, responsibilities and
opportunities of women and men and girls and boys. Gender equality implies that the interests,
needs and priorities of both, women and men are taken into consideration, recognizing
the diversity of different groups women and men (for example: women belonging to ethnic
minorities, lesbian women or women with disabilities).
 Gender Inequality: Inequality is when some people or things are privileged over others. So, it
follows that gender inequality is when one or more genders are privileged over others. It means
treating people unequally because of their gender.
 Gender Inequality in India: Gender inequality in India persists despite high rates of economic
growth, and is particularly apparent among marginalized groups. Women participate in
employment and decision making much less, than men. This disparity is not likely to be
eliminated soon. India’s poor performance on women’s empowerment and gender equality is
reflected in many indicators, particularly, the low sex ratio.
 How is gender inequality measured?
The Human Development Report (HDR) is an annual milestone published by the Human Development
Report Office of the United Nations Development Programme (UNDP). The latest report was launched
on 21 March 2017.
As part of this report, Gender Inequality Index (GII) is brought out.
 Gender Inequality Index (GII)

 Gender inequality remains a major barrier to human development.
 The GII is an inequality index. It measures gender inequalities in three important aspects of
human development—reproductive health, measured by maternal mortality ratio and
adolescent birth rates; empowerment, measured by proportion of parliamentary seats occupied
by females and proportion of adult females and males aged 25 years and older with at least some
secondary education; and economic status, expressed as labour market participation and
measured by labour force participation rate of female and male populations aged 15 years and
older.
 The higher the GII value the more disparities between females and males and the more loss to
human development.

India related data:
 India is ranked 125 of 159 countries in the Gender Inequality Index (GII).
 The ratio of maternal mortality is 174 against every 100,000 live births.
 Only 12.2 per cent of Parliament seats are held by women.
 26.8 per cent of women above the age of 15 years are part of India’s labour force — compared
to 79.1 per cent men.
 Women’s empowerment in terms of mean number of years of schooling is only 4.8 years,
compared to 8.2 years for males.
The following are some of the gender issues in India:
 Female Foeticide and Infanticide:
Female foeticide is the practice of killing a foetus after determining the sex of the foetus through an
ultrasound test.
Female infanticide is the intentional killing of infant girls within one year of their births.
 Gender Composition of Population 2011 (As per Census, 2011):
Sex ratio is used to describe the number of females per 1000 of males. Sex ratio is a valuable source
for finding the population of women in India and what is the ratio of women to that of men in India.
 Overall Sex ratio at the National level has increased by 7 points since Census 2001 to reach 940
at Census 2011.
 This is the highest Sex Ratio recorded since Census 1971 and a shade lower than 1961.

 Increase in Sex Ratio is observed in 29 States/UTs.
 Three major States (J&K, Bihar & Gujarat) have shown decline in Sex Ratio as compared to Census
2001.
We see a decline in sex ratio in 2011 when compared to the sex ratio in 1901. The girls have not vanished
overnight. This is a result of decades of sex determination tests and female foeticide that has acquired
genocide proportions along with female infanticide. This is only the tip of the demographic and social
problems confronting India in the coming years. Skewed sex ratios have moved beyond the states of
Punjab, Haryana, Delhi, Gujarat and Himachal Pradesh.
 Child Sex Ratio (0-6 years)
In India, the Child Sex Ratio is defined as the number of females per thousand males in the age group
0–6 years in a human population.

 The Child Sex Ratio at India level (914) as per Census 2011 is lowest since Independence.
 Overall Sex Ratio has shown improvement since 1991, decline in Child Sex Ratio (0-6) has been
unabated since 1961 census.
 Increasing trend in the Child Sex Ratio (0-6) seen in Punjab, Haryana, Himachal Pradesh, Gujarat,
Tamil Nadu, Mizoram and Andaman and Nicobar Islands.
 In all remaining 27 States/UTs, the Child Sex Ratio show decline over Census 2001.
 The decreasing sex ratio in this age group (0-6 years) has a cascading effect on population over a
period of time leading to diminishing sex ratio in the country. One thing is clear – the imbalance
that has set in at this early age group is difficult to be removed and would remain to haunt the
population for a long time to come.

 The data reflects a grim picture of the status of the girl child in the country and majority of the
states. The magnitude of the decline can be seen by the fact that 18 States / UTs out of 36 have
registered a decline in Child Sex Ratio (CSR) during 2011.
 Child Marriage: Child marriage in India has been practiced for centuries, with children married
off before their physical and mental maturity. The problem of child marriage in India remains
rooted in a complex matrix of religious traditions, social practices, economic factors and deeply
rooted prejudices. Regardless of its roots, child marriage constitutes a gross violation of human
rights, leaving physical, psychological and emotional scars for life.
Legal Age of Marriage: The legal age for marriage is 18 for women, 21 for men, according to the
Prohibition of Child Marriage Act (PCMA) of 2006.
Data related to Child Marriages in India: (Source: Census, 2011)
 The graph depicts a negligible decline in incidence of child marriage among girls (from 2.5 per
cent in Census 2001 to 2.4 per cent in Census 2011).
 The decline in number of girls married below the legal age in rural India between the two
Censuses was marginally higher than in the whole of the country.
 However the incidence of child marriage among girls increased substantially in urban India from
178 percent in 2001 to 2.45 per cent in 2011.
 While these percentage figures seem very low it is important to highlight that the absolute
number of girls married below legal age was 5.1 million.
 A decrease in trend in the incidence of child marriage amongst boys is noticed as well.
 At the national level' the incidence of child marriage among boys below the legal age has
plummeted from 9.6 per cent to 2.5 per cent between 2001 and 2011.
 There is also a substantial drop in child marriages among boys in rural as well as urban areas.

Note: % of Ever married within a particular age group or up to a certain age
= (Number of Ever married within a particular age group or up to a certain age / Persons within a
particular age group or up to a certain age) * 100
Where ever married = Currently married + Widowed + Divorced + Separated
 Absolute number of child marriages in India:

 While 12.9 percent of the girls have got married in the age of 10-17 years, 43.6 per cent of girls
got married between ages 18 to 20 years.
 However, at the same time, while only 4.9 per cent of the boys got married in the age range of
10-17 years, a much larger percentage i.e. 11.2 per cent got married in the 18-below 21 age
group, which constitutes child marriage amongst boys.
 ln terms of numbers we find that 69.5 lakh boys and 51.6 lakh girls have been married before
their respective legal age according to Census 2011.
 While there has been a decline in the incidence of child marriage nationally (from 54 per cent in
1992-93 to 33 per cent today) and in nearly all states, the pace of change remains slow, especially
for girls in the age group 15-18 years.
 Child marriage is more prevalent in rural areas (48 per cent) than in urban areas (29 per cent).
There are also variations across different groups, particularly excluded communities, castes and
tribes – although some ethnic groups, such as tribal groups, have lower rates of child marriage
compared with the majority population.
 Given that our country follows the social norm of boys getting married to younger brides it is
clear that keeping the legal age of boys at 21 is absolutely necessary to ensure that girls are not
married off before the age of 18.
 Dowry and Domestic Violence:
Dowry: Dowry, the giving of gifts or money to a groom on behalf of the bride's family, is common
practice in India, a marital tradition which dates back centuries.

Data related to Dowry deaths and conviction:
 The National Crime Records Bureau (NCRB) states that in 2015, as many as 7,634 women died
in the country due to dowry harassment. Either they were burnt alive or forced to commit
suicide over dowry demand.
 Twenty-one dowry deaths are reported across the country every day.
 Data further reveals that after registration of dowry deaths, police have charge-sheeted
around 93.7 per cent of the accused, of which only 34.7 per cent have been convicted. The
remaining cases are still pending in various courts.
 Domestic Violence
 The patriarchal mindset of the Indian society had made domestic violence against women a
‘normal’ and ‘accepted’ practice.
 Women were beaten up for trivial things like not cooking tasty food or getting late at doing some
domestic work. Even in cases where the parents are aware of the violence their daughters are
being subjected to, they persuaded them to bear everything patiently.
Following are some of the measures taken to prevent from Domestic Violence:
 For the Protection of women from Domestic Violence an Act was enacted in the year 2005 which
is called as the Domestic Violence Act. The main objective of the Act is to eradicate the domestic
violence against women and to provide protection to women from the domestic violence.
 Some measures have also been taken by the international community for eradication of domestic
violence against women and 25th November has been declared as the International day to
prevent violence against women.
 Public awareness campaigns are vital to breaking down centuries old thinking on this topic as
well as de-stigmatizing the act of reporting abusive husbands or their families. Positive media
coverage of women who’ve gone to the police after being threatened or abused by their
husbands in relation to a dowry has been key to encouraging other women do the same.
 Social media is also starting to play a role in this regard, with many blogs, Twitter and Facebook
pages solely dedicated to providing information about and possible solutions to infanticide,
feticide and dowry-related deaths and abuse, though rates of illiteracy and inaccessibility to the
internet in many parts of the country mean that online activity should always be accompanied
by offline activity.
Data related to domestic violence in India:

 In 2015, over 113,000 cases were filed under the section called “cruelty by husband and relatives”
by the NCRB, up 80% from 2006 when about 63,000 cases were filed, data show.
 The increase in number of cases could be because of an actual increase in crime or because of a
rise in reporting off such cases, as awareness of the law grows, and more women are empowered
to report abuse to the police, rather than an increase in the number of crimes.
 It is unclear whether data from the National Crime Records Bureau shows actual trends in
domestic violence.
 Almost 30% of married Indian women between the ages of 15 and 49 years reported experiencing
spousal violence at least once, according to the National Family Health Survey-4, conducted over
2015-2016.
 This proportion has reduced from 27.2% of women who reported violence by spouses in 2005-
2006.
 Though cases recorded with the NCRB reduced in Andhra Pradesh, a higher proportion of women
(43.2%) reported facing spousal violence in 2015-2016 over 2006-2006 (33%), according to NFHS
data.
 Issues related to women in the workforce

 The world confirms that women have proved their stupendous presence in almost every industry
and in huge numbers.
 They are strong, smart, technically competent and emotionally valiant in comparison to their
male counterparts.
 As such they are rightly called as the new age economy turners.
 But despite achieving such huge laurels, women still face many obstacles in their work place.
The following are some of the problems faced by the working women:
Lesser number of economic opportunities
 An aspect of life in India is that women are generally confined to home thus restricting their
mobility and face seclusion. The women face constraints beyond those already placed on them
by other hierarchical practices.
 These cultural rules place some Indian women, particularly those of lower caste, in a paradoxical
situation: when a family suffers economically, people often think that a woman should go out
and work, yet at the same time the woman's participation in employment outside the home is

viewed as "slightly inappropriate, subtly wrong, and definitely dangerous to their chastity and
womanly virtue".
 When a family recovers from an economic crisis or attempts to improve its status, women may
be kept at home as a demonstration of the family's morality and as a symbol of its financial
security.
 Even professional women find discrimination to be prevalent: two-thirds of the women in one
study felt that they had to work harder to receive the same benefits as comparably employed
men.
 Women in India face enormous challenges for their participation in the economy, in a way that
mirrors the many injustices they suffer in the society at large.
Wrong methods employed to measure women’s work
 The labour force includes not only the employed but also unemployed persons who are actively
seeking jobs.
 In India, substantial numbers of women who are not counted in the labour force are, as described
in the official statistics, ‘attending to domestic duties’ in their own households.
 National Sample Survey reports tell us that, in 2009-10, out of every 1,000 females (all ages) in
India’s rural areas, 347 were attending to domestic duties.
 In the case of urban females, this number was even bigger: 465 per 1000.
 Compare this to the number of rural and urban men who were attending to domestic duties: only
5 per 1,000 and 4 per 1,000 respectively.
Why is India’s female labour participation rate so low? Part of the answer lies in the methods
employed to measure women’s work.
 A woman’s work in her own household is not counted as an economic activity, and does not get
reported in the national income statistics.
 This is unlike the case of services by a paid domestic help, which is considered an economic
activity and is counted in the national income.
 As is well known, women’s domestic duties include childbirth, caring for the young and old,
cooking, and a range of other activities that are crucial for the upkeep of the family.
 However, society undervalues these immense contributions made by women. And, to some
extent, official statistics reproduces the prejudices in the society.
 Data related to women in the workforce:

(Source: Employment – Unemployment Survey 2011-12)
 It is distressing to observe that the females in India, particularly in urban areas have very low
Labour Force Participation rate.
 Only 17.9 per cent of the females in urban areas are in the labour force, i.e., either employed or
available for employment, as against 73.3 percent males in the urban areas.
 Despite such low Labour Force Participation Rate among the urban females the rate of
unemployment is as high as 12.5 percent as against 3.4 percent for urban males.
 At All India level, female LFPR is estimated to be 25.4 per cent as compared to 77.4 per cent in
male category.
 The Worker Population Ratio (WPR) is estimated to be 50.8 per cent at All India level.
 In rural areas, the WPR is estimated to be 52.9 per cent as compared to 44.9 in the urban areas.
 The female WPR is estimated to be 23.6 per cent at All India level as compared to the male WPR
of 75.1 per cent.
 The unemployment rate is estimated to be 3.8 per cent at All India level.
 In rural areas, unemployment rate is 3.4 per cent whereas in urban areas, the same is 5.0 per
cent.
 Despite relatively low LFPR, the unemployment rate is significantly higher among females as
compared to males.
 At all India level, the female unemployment rate is estimated to be 6.9 per cent whereas for
males, the unemployment rate is 2.9 per cent.
 In urban areas, the female unemployment rate is estimated to be 12.5 per cent at All India level.
Data from Census, 2011:

 Gender Budgeting:
What is it?
Women and girls face various forms of vulnerability throughout the life cycle. They may face
discrimination before or after birth; violence, harassment or abuse; neglect due to dependence and lack
of access to resources; social prejudice; and exploitation – whether economic, political, social or
religious. They are vulnerable to exploitation and discrimination regardless of where they are positioned
on the economic and social spectrum. Additionally, their vulnerability increases significantly if they are
poor, socially disadvantaged or live in a backward or remote area.
Gender Budgeting is a tool that can be used to address these vulnerabilities. It is a tool for gender
mainstreaming. Gender mainstreaming is the process of assessing the implications of any planned
policy, action or legislation on women or men. The ultimate aim is to ensure gender equality.
Gender budgeting uses the budget as an entry point to apply a gender lens to the entire policy process.
It is concerned with gender sensitive formulation of legislation, policies, plans, programmes and
schemes; allocation and collection of resources; implementation and execution; monitoring, review,
audit and impact assessment of programmes and schemes; and follow-up corrective action to address
gender disparities.

 Schemes/Initiatives of the Government of India to improve the sex ratio and Child Sex ratio in
India:
 Pre-conception and Pre-natal Diagnostic Techniques (Prohibition of Sex Selection) Act (PC-
PNDT): This Act was enacted on 20 September 1994 with the intent to prohibit prenatal
diagnostic techniques for determination of the sex of the foetus leading to female foeticide. It
was amended and effectively implemented in 2003 and strictly amended in 2011.
The features of the Act are:
 Sex selection and sex determination are prohibited.

 No person conducting pre-natal diagnostic procedures shall communicate to the pregnant
woman concerned or her relatives the sex of the foetus by words, signs or in any other manner.
 All clinics conducting ultrasound must be registered and only doctors qualified under the Act can
use diagnostic techniques such as ultrasound.
 All clinics should display the following notice prominently: ‘Disclosure of sex of the foetus is
prohibited under the law’ in English as well as the local language.
 Doctors or clinics advertising sex determination tests in any form are liable for punishment.
 Beti Bachao, Beti Padhao Yojana:

The Beti Bachao, Beti Padhao (BBBP) scheme was launched on 22 January 2015 by Modi. It aims to
address the issue of the declining child sex ratio image (CSR) and is a national initiative jointly run by
the Ministry of Women and Child Development, the Ministry of Health and Family Welfare and
the Ministry of Human Resource Development.
Initial focus
 100 districts with low sex ratio.
 61 more districts added in 2016
 Implemented under the overall guidance and supervision of concerned District
Magistrate/Deputy Commissioners.
 Atleast 1 district in each state.
 In 100 critical districts, improve sex ratio by 10 points in a year
 Reduce gender difference under-5 child mortality
 Increase girls in secondary schools
 Separate toilets for girls (by 2015)
 Celebrate girl child day- 24th Jan

Updates:
The hashtag #SelfieWithDaughter was promoted on social media in June 2015, which started
when Sunil Jaglan the sarpanch of the village Bibipur in Haryana took a selfie with his
daughter Nandini and posted on Facebook on 9 June 2015. The hashtag garnered worldwide
fame.
In August 2016, Olympics 2016 bronze medallist Sakshi Malik was made brand ambassador
for BBBP.
Budget outlay:
2014-15 34.90 crore
2015-16 59.40 crore
2016-17 (BE) 100 crore
2016-17 (RE) 43 crore
2017-18 (BE) 200 crore
 Sukanya Samriddhi Yojana:

Union Government’s Sukanya Samridhi Yojna under Beti Bachao Beti Padhao (BBBP) campaign was
launched in February, 2015 in Jaunpur district in the state of Uttar Pradesh.
Salient Features:
 This scheme encompasses all the girls of every economic strata till they are 10 years of age to
open Sukanya Samridhi Account in Post offices and in the Banks. This account will be opened by
girl’s parents or legal guardians.
 In the account, a minimum of one thousand Rupees and maximum of One lakh fifty thousand
Rupees can be deposited annually, upon which interest will be accrued. The interest rate will be
quarterly revised by the government.
 When the girl child attains the age of 18 years, she herself would become eligible to operate the
account.
 Under the scheme, the girl child can withdraw 50 per cent of the money after reaching age of 18
for higher education. The 18 years deadline will also help preventing child-marriages.
 Project Tejaswini:
The Government of India has come up with a project called Tejaswini for the Socio-Economic
Empowerment of Adolescent Girls and Young Women.
 A financing agreement for IDA credit of US$ 63 million (equivalent) has been signed for the same
with the World Bank on 23rd February, 2017.
 The project seeks to empower the adolescent girls (aged between 14 and 24) with basic life skills
and thereafter provide further opportunities to acquire market driven skill training or completion
of secondary education, depending on the inclination of the beneficiary.
 The project will be delivered in 17 Districts of Jharkhand.
 The project has three main components, (i) Expanding social, educational and economic
opportunities (ii) Intensive service delivery (iii) State capacity-building and implementation
support.
 About 680,000 adolescent girls and young women in the project Districts are expected to benefit
from the program.
 The closing date for the project is 30th June, 2021.
 Child Marriages in India: There is a legal framework to prevent child marriage and protect
children.
The laws available are:

 The Prohibition of Child Marriage Act, 2006
 Dowry Prohibition Act, 1961
 Other laws that may provide protection to a child bride include the Juvenile Justice (Care and
Protection of Children) Act, 2000, the Domestic Violence Act, 2005, and the Protection of Children
from Sexual Offences Act, 2012.
 The Prohibition of Child Marriage Act, 2006:

The Prohibition of Child Marriage Act (PCMA), 2006 was notified in January 2007 to overcome the
constraints of the previous legislations in effectively dealing with the problem of child marriages in India
and to put in place a comprehensive mechanism. It came into force on 1 November 2007.
Whom does it apply to? It applies to all citizens of India irrespective of religion, without and beyond
India. It however, does not apply to the State of Jammu and Kashmir.
What does this law provide for?
The basic premise of the law is:
• To make a child go through a marriage is an offence.

• Child or minor is a person up to 18 years in the case of girls and 21 years in the case of boys.
The provisions of this law can be classified into three broad categories:
A. Prevention
B. Protection
C. Prosecution of Offenders
Prevention:
Under the Law:
 Child Marriage Prohibition Officers (CMPOs) are to be appointed in every state to prevent child
marriages, ensure protection of the victims as well as prosecution of the offenders.
 The Courts have the power to issue injunction for prohibiting child marriages from taking place.
Protection:
 The law makes child marriages voidable by giving choice to the children in the marriage to seek
annulment of marriage.
 It gives a legal status to all children born from child marriages and makes provisions for their
custody and maintenance.
The Child Marriage Prohibition Officer has been empowered:
 To provide necessary aid to victims of child marriage

 To provide legal aid
 To produce children in need of care and protection before the Child Welfare Committee or a
 First Class Judicial Magistrate, where there is no Child Welfare Committee.
Prosecution of Offenders:
 The law provides for punishment for an adult male above 18 years of age marrying a child.
 It also lays down punishment for those performing/conducting/ abetting a child marriage.
 The law clearly states that women offenders in any of the above categories cannot be punished
with imprisonment. However, they can be penalized by way of imposition of a fine.
 Juvenile Justice (Care and Protection of Children) Act, 2000:
 The Juvenile Justice (Care and Protection of Children) Act 2015 has come into force on January
15, 2016. It replaces the Juvenile Justice Act, 2000.
 The JJ Act 2000 dealt with two categories of children viz. ‘child in conflict with law’ and ‘child in
need of care and protection’.
 As per JJ Act, 2000, a juvenile is a person who is below 18 years of age. This act has a provision
that a child in conflict with law cannot be treated as an adult.
 If a child is convicted for any offence, he may spend a maximum of three years in institutional
care.
 This act empowered the Child Welfare Committees (CWCs) to deal with child in need of care and
protection.
 Juvenile Justice Boards (JJB) were empowered to deal with child in conflict with law.
Important Provisions of the amended Act are:
 It treats all the children below 18 years equally, except that those in the age group of 16-18 can
be tried as adults if they commit a heinous crime.
 A child of 16-18 years age, who commits a lesser offence (a serious offence), may be tried as an
adult if he is apprehended after the age of 21 years.
 A heinous offence attracts a minimum seven years of imprisonment. A serious offence attracts
three to seven years of imprisonment and a petty offence is treated with a three year
imprisonment.
 No child can be awarded the death penalty or life imprisonment.
 It mandates setting up of Juvenile Justice Boards (JJBs) in each district with a metropolitan
magistrate and two social workers, including a woman. The JJBs will conduct a preliminary inquiry
of a crime committed by a child within a specified time period and decides whether he should be
sent to rehabilitation centre or sent to a children’s court to be tried as an adult. The board can
take the help of psychologists and psycho-social workers and other experts to take the decision.
 A Children’s court is a special court set up under the Commissions for Protection of Child Rights
Act, 2005, or a special court under the Protection of Children from Sexual Offences Act, 2012. In
absence of such courts, a juvenile can be tried in a sessions court that has jurisdiction to try
offences under the Act.

 The Act has also tried to make the adoption process of orphaned, abandoned and surrendered
children more streamlined while adopting some of the concepts from the Hague Convention on
Protection of Children and Cooperation in Respect of Inter-Country Adoption.
 Protection of Children from Sexual Offences Act, 2012
 The Protection of Children from Sexual Offences (POCSO) Act 2012 is applicable to the whole of
India.
 The POCSO Act 2012 defines a child as any person below the age of 18 years and provides
protection to all children under the age of 18 years from sexual abuse.
 It also intends to protect the child through all stages of judicial process and gives paramount
importance to the principle of "best interest of the child".
The National Commission for the Protection of Child Rights (NCPCR) and State Commissions for the
Protection of Child Rights (SCPCRs) have been made the designated authority to monitor the
implementation of the Act.
National Commission for Protection of Child Rights:

 The National Commission for Protection of Child Rights (NCPCR) was set up in March 2007
under the Commissions for Protection of Child Rights (CPCR) Act, 2005, an Act of Parliament
(December 2005).
 NCPCR is a statutory body under the CPCR Act, 2005 under the administrative control of the
Ministry of Women & Child Development, Government of India.
 The Commission's Mandate is to ensure that all Laws, Policies, Programmes, and
Administrative Mechanisms are in consonance with the Child Rights perspective as enshrined
in the Constitution of India and also the UN Convention on the Rights of the Child.
 The Child is defined as a person in the 0 to 18 years age group.
 Government Schemes related to Child Development:

 Integrated Child Development Services (ICDS): It is under Ministry of Women and Child
Development. It is a welfare programme which provides food, preschool education and primary
healthcare to children under 6 years of age and to their mothers.

The following services are sponsored under ICDS:
Immunization: Children should be given full vaccinations against six preventable diseases: poliomyelitis,
diphtheria, pertussis, tetanus, tuberculosis and measles. Pregnant women should receive a vaccination
against tetanus that reduces maternal and neonatal mortality.
Supplementary nutrition: Vitamin A tablets, food grains and rice, and fortified food packages are
available for children and mothers who are showing signs of malnourishment. Weight-for-age growth
cards should be maintained for all children under six years of age - children below the age of 3 should
be weighed once a month and children aged 3-6 should be weighed quarterly.
National Nutrition Mission
There are two components of the National Nutrition Mission as follows:
 Information, Education and Communication (IEC) Campaign against malnutrition
 Multi-sectoral Nutrition Programme
The key objectives of these programmes are as under:
 To create awareness relating to malnutrition amongst pregnant women, lactating mothers,
promote healthy lactating practices and importance of balanced nutrition;
 To improve maternal and child under-nutrition in 200 high burdened districts and to prevent
and reduce the under-nutrition prevalent among children below 3 years;
 To reduce incidence of anaemia among young children, adolescent girls and women.
Health checkup: Various health services should be provided for children including treatment of
diarrhoea, de-worming and distribution of simple medicines (along with weight and height monitoring,
and immunisations). Ante-natal and post-natal check-ups should be provided for pregnant women and
new mothers.
Referral services: If, after a health check-up, children or mothers are in need of medical attention they
should be referred to the Primary Health Centre or sub-centre. Severely malnourished children should
be referred to Nutrition Rehabilitation Centres (NRCs) and young children with disabilities should be
referred to specialists.
Pre-school non formal education: In addition, children aged 3-6 should be able to access pre-school
non-formal education under ICDS

Nutrition and Health information: Women and adolescent girls (aged 15-45) should also be able to
access nutrition and health education, providing them with advice and support to help them look after
their own health, nutrition and development needs as well as that of their children and families.
To achieve this, there are 2 schemes (MBP and SABLA) under ICDS as given below:
 Maternity Benefit Programme (MBP) - Jan 2017
 Under the scheme, all Pregnant Women and Lactating Mothers (PW&LM), excluding the
Pregnant Women and Lactating Mothers who are in regular employment with the Central
Government or State Governments or Public Sector Undertakings or those who are in receipt of
similar benefits under any law for the time being are eligible.
 The cash incentive of Rs.6,000/- is payable in three instalments for the first two live births.
 The cash transfer would be Aadhaar linked through the individual bank/post office account etc.
in DBT mode.
 It is a Centrally Sponsored Scheme and the cost sharing between Centre and States is 60:40 for
all the States and UTs (with legislature), 90:10 for NER and Himalayan States and 100% GoI share
for UTs without legislatures
 SABLA: The Rajiv Gandhi Scheme for Empowerment of Adolescent Girls (RGSEAG) Sabla is a
centrally sponsored program of Government of India initiated on April 1, 2011 under Ministry of
Women and Child Development
The objectives of the program are:
 Enable the Adolescent girls for self-development and empowerment

 Improve their nutrition and health status.
 Promote awareness about health, hygiene, nutrition, adolescent reproductive and sexual health
(ARSH) and family and child care.
 Upgrade home-based skills, life skills and integrate with the National Skill Development Program
(NSDP) for vocational skills.
 Mainstream out of school adolescent girls into formal/non formal education.
 Provide information/guidance about existing public services such as PHC, CHC, Post Office, Bank,
Police Station, etc.
The program would cover adolescent girls 11–18 years old under all ICDS (Integrated Child Development
Services) projects in selected 200 districts in all states/UTs in the country. The target group would be
subdivided into 11-15 and 15–18 years.
 ICDS Child Protection Scheme: Another component under ICDS is Child Protection Scheme. The
ICPS is a Centrally sponsored program for child protection, being implemented across the country
from 2009-10.
The salient features of ICPS include financial support to States/UTs for:

 Setting up and maintenance of various types of Homes or Shelters run by States/UTs or by
voluntary organizations;
 Setting up of dedicated service delivery structures at Central, State and District level;
 Statutory Support Services in the districts like Juvenile Justice Board, Child Welfare Committees;
 Support for emergency outreach services for children in difficult circumstances;
 Support for family based non-institutional care through sponsorship, foster care, adoption and
after care programme.
 RAJIV GANDHI NATIONAL CRECHE SCHEME FOR THE CHILDREN OF WORKING MOTHERS
 Another component under ICDS is National Creche Scheme.
 A crèche is a facility which enables parents to leave their children while they are at work and
where children are provided stimulating environment for their holistic development.
 Crèches are designed to provide group care to children, usually up to 6 years of age, who need
care, guidance and supervision away from their home during the day
 Ministry is implementing the Rajiv Gandhi National Crèche Scheme for the Children of Working
Mothers which provides day care facilities to the children in the age group of 0-6 years from
families with monthly income of less than Rs.12,000/-.
 The scheme, inter-alia, also provides development services i.e. supplementary nutrition, health
care inputs like immunization, polio drops, basic growth monitoring and recreation to such
children.
 Kishori Shakti Yojana

 Kishori Shakti Yojana (KSY) seeks to empower adolescent girls (11-18 years), so as to enable them
to take charge of their lives. It is viewed as a holistic initiative for the development of adolescent
girls.
 The programme through its interventions aims at bringing about a difference in the lives of the
adolescent girls. It seeks to provide them with an opportunity to realize their full potential.

 This scheme is a redesign of the already existing Adolescent Girls (AG) Scheme being
implemented as a component under the centrally sponsored Integrated Child Development
Services (ICDS) Scheme.
 The new scheme dramatically extends the coverage of the earlier scheme with significant content
enrichment, strengthens the training component, particularly in skill development, aspects
aimed at empowerment and enhanced self-perception.
 It also fosters convergence with other sectoral programmes, addressing the interrelated needs
of adolescent girls and women.
 The National Early Childhood Care and Education (ECCE): The Early Childhood Care and
Education for children up to 6 years of age focuses on laying foundation for lifelong development,
for enhancing school readiness and human capital formation. This is done by promoting free,
universal, inclusive, enjoyable, joyful and contextualized opportunities for laying foundation and
attaining full potential.
 Dowry system and Domestic Violence in India:
 The Dowry Prohibition Act, 1961
 The Dowry Prohibition Act prescribes a minimum punishment of two years imprisonment and
fine to anyone demanding dowry.
 Because of this Dowry Prohibition Act, a person who gives or takes, or helps in the giving or taking
of dowry can be sentenced to jail for 5 years and fined Rs.15000/- or the amount of the value of
dowry, whichever is more.
 This Act is prohibited to give or to agree to give, directly or indirectly, any property or valuable
security, in connection with a marriage.
 The giving of or agreeing to the giving of any amount either in cash of kind, jewellery, articles,
properties, etc. in respect of a marriage is absolutely prohibited by the Dowry prohibition Act.
 Even the making of a demand for dowry is also now prohibited and it is punishable with
imprisonment of 5 years and a fine of Rs.10000/-.
 In Order to provide more teeth to dowry prevention laws, the Government has decided to make
it mandatory for couples to make list of gifts exchanged during the ceremonies of marriage.
 Protection of Women from Domestic Violence Act, 2005:
The Protection of Women from Domestic Violence Act, 2005 protects women from physical, sexual,
verbal, emotional and economic abuse at home.
Salient features of Protection of Women from Domestic violence Act 2005:

 Includes physical and mental ill-treatment.
 Primarily meant for the protection of wife or female live-in partners.
 Law also extends to sisters, widows or mothers.
 Harassment in the form of dowry demands also included in this law.
 Gives women right to secure housing.
 Court can also issue protection orders that prevent the abuser to harass the women by acts at her
workplace.
 Act proposes appointment of protection officers and NGOs.
 Breach of protection order is a non-bailable offense.
Update 2016: The Supreme Court in its landmark judgement has widened the scope of the Protection
of Women from Domestic Violence Act, 2005 by making it gender-neutral.
Key provisions:
 The SC order paves way for prosecution of women and even non-adults for subjecting a woman
relative to violence and harassment.
 It strikes down two words (adult male) from Section 2(q) of Act which deals with respondents
who can be sued and prosecuted under it for harassing a married woman in her matrimonial
home.
 It also allows a woman to seek legal action against her daughter-in-law and even her minor
grandchildren for domestic violence.
Other provisions to protect women against dowry and domestic violence are:
 To stop the offences of cruelty by husband or his relatives on wife, Section 498-A has been added
in the Indian Penal Code, and Section 198-A has been added in the Criminal Procedure Code since
the year 1983.
 In the case of suicide by a married woman, within 7 years from the date of her marriage, the
Court may presume that such suicide has been abetted, encouraged by her husband or his
relatives. Provision to this effect has been added in the Indian Evidence Act, by adding Section
113-A since the year 1983.
 Sec.304-B is incorporated in the Indian Penal Code in 1983.
 It deals with Dowry Death. It states that where the death of a woman is caused by any burns or
bodily injury or occurs otherwise than under normal circumstances within seven years of her
marriage and it is shown that soon before her death she was subjected to cruelty or harassment
by her husband or any relative of her husband for, or in connection with, any demand for dowry,
such death shall be called “dowry death” and such husband or relative shall be deemed to have
caused her death.
Issues with IPC Section 498 A:
 Section 498A is considered to be most draconian provision of the IPC with respect to dowry. It
says that if the husband or a relative of the husband of a woman, subjects the woman to cruelty,
he shall be punished with imprisonment for a term which may extend to three years and shall
also be liable to fine.
 Here, the offence of cruelty is considered to be non-compoundable and non-bailable. This means
that once a case is lodged, there cannot be compromise. This is seen as a big loophole in the
Indian law because being a non-compoundable offence; the dowry laws have been misused to
harass the groom’s family.
Update: 2017
In 2017, the Supreme Court has in a landmark judgement put an end to misuse of section 498A of the
IPC that is dowry-related offences in order to put an end to the automatic arrest of the husband and
his family members.
Important provisions of the judgement:
 Every complaint under Section 498A should henceforth have to be referred to Family Welfare
Committees - to be constituted at every district. No arrest shall be affected till report of such
committee is received.
 A bench headed by Justice A K Goel also ruled that there will be no routine impounding of
passports or issuance of Red Corner Notice for NRI accused.
 Personal appearance of all family members and particularly outstation members may not be
required. However, these directions will not apply to the offences involving tangible physical
injuries or death.
 The committee would interact with the parties personally or by means of telephonic or
electronic communication and give a report within a month to the authority which referred
the complaint to it.
 The report may be then considered by the investigating officer or the magistrate on its own
merit.

 Complaints under Section 498A and other connected offences may be investigated only by a
designated investigating officer of the area.
The court passed the order keeping in view the fact that many a times the anti-dowry harassment law,
framed in 1983 following a spate of dowry-related deaths, is allegedly misused.
 Other initiatives:
Update: March, 2017
Commonwealth launches Peace in the Home programme to stamp out domestic violence:
 The Commonwealth is launching an initiative to help member states tackle domestic violence.
 The programme, which is being launched on Women’s Day, will continue through till 2018,
when there is expected to be an accord on ending domestic violence in the Commonwealth.
 The “Peace in the home”programme will include toolkits to help governments across the
Commonwealth involve multiple agencies — such as schools, doctors and hospitals, as well as
government — and law enforcement agencies to work together effectively, and will help
countries highlight and share details of initiatives that had been particularly successful at
dealing with domestic violence.
 There will also be a mentoring programme for women, and an initiative to address the issue of
violence around elections and politics.
 According to the UN estimates one in three women has suffered from one form or another
domestic violence.
 Initiatives/Schemes to protect women from problems faced by women in their work life:
Following are some of the legislations:
Sexual Harassment of Women at Workplace Act, 2013:

 To provide a safe and secure environment to women at the workplace, the Sexual Harassment
of Women at Workplace (Prevention, Prohibition and Redress) Act, 2013 came into effect from
December 2013.
 The Act covers all women in workplaces in the organized and unorganized sectors and creates an
effective complaints and redress mechanism in the form of an Internal/Local Complaints
Committee.
National Commission for Women Act, 1990:
 It is an act to constitute a National Commission for Women and to provide for matters connected
therewith.
 It has been given a broad mandate to make recommendations to the Government on measures
for the effective implementation of the legal safeguards for women; review the existing laws
affecting women and recommend amendments.
 It consists of a chairperson and five members to be nominated by the central Government.
The Indecent Representation of Women Act, 1986:
 It prohibits indecent representation of women in any form in any advertisement, publication,

writing, painting, in any other manner.
 It prohibits selling, distribution and circulation of any book, pamphlet & such other material
containing indecent representation of women.
 It prescribes punishment for a term extending to two years and fine extending to two thousand
rupees on first conviction. Second and subsequent convictions attract a higher punishment.
Immoral Traffic Prevention Act, 1956:
 It prohibits Trafficking in human beings and contravention is punishable.

 The act defines the terms ‘Brothel’ and ‘Prostitution’.
 It provides for punishment for keeping brothel or allowing premises to be used as a brothel.
 It makes knowingly living on the earnings of prostitution of another person as punishable.
 Under this act, providing, inducing or taking person for the sake of prostitution is punishable.
 It provides for establishment of protective homes and special courts.
Criminal Justice Amendment Act, 2013:
 New provisions penalizing acid attack, sexual harassment, voyeurism and stalking have been
introduced.

 Provision for rape has been expanded to include rape committed by a person in a position of
dominance, a member of the armed forces deployed in an area or on women incapable of giving
consent.
 The act has mandated an increased penalty for gang rape and causing serious injury to the victim
resulting her to remain in a vegetative state.
 Now, it is an obligation on all hospitals (public/private) to provide free medical treatment to
victims.
The Maternity Benefit Act, 1961:

It regulates the employment of women in factories, mines, the circus industry, plantations and shops or
establishments employing ten or more persons, except the employees who are covered under the
Employees' State Insurance Act, 1948, for certain periods before and after child-birth and provides for
maternity and other benefits.
The Act was recently amended in 2016, to make it more helpful to women.
The amendments to Maternity Benefit Act, 1961 are as follows:
 Increase Maternity Benefit from 12 weeks to 26 weeks for two surviving children and 12 weeks
for more than two children.
 12 weeks Maternity Benefit to a 'Commissioning mother' and 'Adopting mother'.
 Facilitate 'Work from home'.
 Mandatory provision of Creche in respect of establishment having 50 or more employees.
 Every establishment shall intimate in writing and electronically to everywoman at the time of her
initial appointment about the benefits available under the Act.
 Apart from these legislations, government has also introduced some schemes for women
which are as follows:
One Stop Centre Scheme
 Ministry of Finance, Government of India has established ‘Nirbhaya Fund’ with an initial corpus
of Rs. 1000 cr (as per the announcement in Budget 2013-14) for women safety pertaining to the
strategic areas of prevention, protection and rehabilitation.
 For subsequent financial years of 2014-15 and 2015-16 an amount of Rs. 1000 cr (each financial
year) has been provided under the Nirbhaya Fund.

 Using this fund, Ministry of Women and Child Development (MWCD), has formulated a Centrally
Sponsored Scheme for setting up One Stop Centre, a sub-scheme of umbrella Scheme for
National Mission for Empowerment of women including Indira Gandhi Mattritav Sahyaog Yojana.
 These Centres will be established across the country to provide integrated support and assistance
under one roof to women affected by violence, both in private and public spaces in phased
manner.
Universalization of Women Helpline Scheme:
The Women Helpline (Helpline) will provide 24 hour emergency response to all women affected by
violence both in public and private sphere would be integrated with this women helpline. The proposed
Women Helpline will utilize the infrastructure of existing Chief Minister Helpline functioning in some
States through 181 as well as that of 108 services. It will be established in every State/ UT.
UJJAWALA:
 A Comprehensive Scheme for Prevention of trafficking and Rescue, Rehabilitation and Re-
integration of Victims of Trafficking and Commercial Sexual Exploitation.
 The scheme has five components viz, Prevention, Rescue, Rehabilitation and Re-Integration of
Victims of Trafficking and Commercial Sexual Exploitation
 The fund under the scheme is released to the implementing agencies which mainly includes
NGOs.
 The Government of India share is 90% of the total cost of the project.
 A total number of 289 projects have been sanctioned as on 30th November, 2014 which includes
165 Rehabilitation Homes.
SWADHAR Greh Scheme
Under the Scheme, Swadhar Greh will be set up in every district with capacity of 30 women with the
following objectives:
 To cater to the primary need of shelter, food, clothing, medical treatment and care of the women
in distress and who are without any social and economic support.
 To enable them to regain their emotional strength that gets hampered due to their encounter
with unfortunate circumstances.
 To provide them with legal aid and guidance to enable them to take steps for their readjustment
in family/society. To rehabilitate them economically and emotionally.

 For big cities and other districts having more than 40 lakh population or those districts where
there is a need for additional support to the women, more than one Swadhar Greh could be
established. The capacity of Swadhar Greh could be expanded up to 50 or 100 on the basis of
need assessment and other important parameters.
 Swadhar scheme is being implemented through implementing agencies i.e. Social
Welfare/Women and Child Welfare Departments of State Governments, Women’s Development
Corporations, Urban Local Bodies, reputed Public/Private Trusts or Voluntary Organizations.
Support to Training and Employment Programme for Women (STEP):
STEP Scheme was launched as Central Sector Scheme in 1986-87 with a view to make significant impact
on women by upgrading skills for employment on sustainable basis and income generation for
marginalized and asset-less rural and urban women especially those in SC/ST households and families
below poverty line.
The scheme covers ten sectors of employment i.e. agriculture, animal husbandry, dairying, fisheries,
handlooms, handicrafts, khadi and village industries, sericulture, waste land development and socio-
forestry. The Government of India share is 90% of the cost project.
Mahila E-haat
 The Ministry of Women & Child Development launched “Mahila E-Haat” a bilingual portal on 7th
March, 2016.
 This is a unique direct online marketing platform leveraging technology for supporting women
entrepreneurs/SHGs/NGOs for showcasing the products / services which are
made/manufactured/ undertaken by them.
 It is an initiative for meeting aspirations and needs of women. This was done keeping in mind
that technology is a critical component for business efficiency and to make it available to the
majority of Indian women entrepreneurs / SHGs / NGOs.
 This exclusive portal is the first in the country to provide a special, focused marketing platform
for women. Being a bilingual portal, it aims at financial inclusion and economic empowerment of
women. This unique e-platform showcases products and services.
Start Up India Scheme for Women Entrepreneurs:

 NITI Aayog has finalized the scheme to promote the participation of women in workforce. The
scheme was unveiled on 1 April 2017 with the initial funding of Rs. 100 crore. The scheme will

help and encourage women to become entrepreneurs in the field of technology with the
coordinated efforts by the government and NASSCOM.
 Initially, the Start Up India scheme for women would be launched in 10 cities to make it result
oriented. The scheme will address the concern with government funding and venture capital
funding to nurture the business ideas brought by women.
 The government has consulted to NASSCOM and discussed with the US based technology giants,
including Facebook and Google to give a robust backing to the Start Up scheme for the women.
 Budget 2017-18: What are the benefits for women in this budget?
 In the current Budget, the funds directed to women and child development schemes in various
ministries have been raised from Rs 1,56,528 crore in 2016-17 to Rs 1,84,632 crore in 2017-18.
 It has seen an announcement of establishing Mahila Shakti Kendras at the village level in 14 lakh
Integrated Child Development Scheme (ICDS) anganwadi centres to “provide one-stop
convergent support services for empowering rural women with opportunities for skill
development, employment, digital literacy, health and nutrition.” For this, Rs 500 crore has been
allocated.
 However, apart from schemes exclusively directed towards the welfare of women, some gender-
neutral announcements may benefit women as well.
 It has been announced that participation of women in the MGNREGA has increased to 55 per
cent from less than 48 per cent in the past. Since the Budget provision under MGNREGA has been
increased from Rs.38,500 crores in 2016-17 to Rs.48,000 crores in 2017-18, it may translate into
increased employment opportunities for women in rural India.
 A sum of Rs.4,000 crore for SANKALP is allocated for providing market training to 3.5 crore youth.
 Along with this, the next phase of Skill Strengthening for Industrial Value Enhancement (STRIVE)
at a cost of Rs.2,200 crore will focus on “improving the quality and market relevance of vocational
training.”
 Incredible India 2.0 Campaign, setting up of five Special Tourism Zones anchored on SPVs,
increased allocations for Deendayal Antyodaya Yojana- National Rural Livelihood Mission for the
promotion of skill development and livelihood opportunities for people in rural areas, and
extension of the Pradhan Mantri Kaushal Kendras from 60 to 600 districts are likely to bring
employment and employability to women’s doorsteps.

Worksheet

2. True /False
3. MCQs
4. Match the column
Happy Learning!!!

Summary Sheet
ESI- Urbanization
Important Points
videos and notes
Mock Test

 What is Urbanization? The process of society’s transformation from a predominantly rural to a
predominantly urban population is defined as ‘urbanization’. It includes two things: an increase
in the number of people living in urban settlements and an increase in the percentage of the
population engaged in non-agricultural activities, living in such places.
 Important Definitions (for Census 2011):
The definition of urban areas is as follows:
 All places with a municipality, corporation, cantonment board or notified town area committee,
etc
 All other places which satisfied the following criteria:
 A minimum population of 5,000
 At least 75 per cent of the male main working population engaged in non-agricultural pursuits;
 A density of population of at least 400 persons per sq. km.
The first category of urban units is known as Statutory Towns. These towns are notified under law by the
concerned State/UT Government and have local bodies like municipal corporations, municipalities,
municipal committees, etc., irrespective of their demographic characteristics as reckoned on 31st December
2009.
The second category of Towns is known as Census Town. These were identified on the basis of Census 2001
data.
Urban Agglomeration (UA):
 An urban agglomeration is a continuous urban spread constituting a town and its adjoining
outgrowths (OGs) (explained below), or two or more physically contiguous towns together with
or without outgrowths of such towns.
 An Urban Agglomeration must consist of at least a statutory town and its total population (i.e. all
the constituents put together) should not be less than 20,000 as per the 2001 Census.
 In varying local conditions, there were similar other combinations which have been treated as
urban agglomerations satisfying the basic condition of contiguity. Examples: Greater Mumbai UA,
Delhi UA, etc.

Note: The top three most populated urban agglomerations (UA) in India, viz. Greater Mumbai, Delhi and
Kolkata, far exceed in population than the rest of the UAs in India. These three urban centres have therefore
been given the title of Mega Cities (these have a population of more than 10 million).
Out Growths (OG):
 An Out Growth (OG) is a viable unit such as a village or a hamlet or an enumeration block made
up of such village or hamlet and clearly identifiable in terms of its boundaries and location.
 Some of the examples are railway colony, university campus, port area, military camps, etc.,
which have come up near a statutory town outside its statutory limits but within the revenue
limits of a village or villages contiguous to the town.
 While determining the outgrowth of a town, it has been ensured that it possesses the urban
features in terms of infrastructure and amenities such as pucca roads, electricity, taps, drainage
system for disposal of waste water etc. educational institutions, post offices, medical facilities,
banks etc. and physically contiguous with the core town of the UA.
 Data related to number of number of UAs/Towns as per Census 2011:
 Other important Data (as per Census 2011):

 For the first time since Independence, the absolute increase in population is more in urban areas
that in rural areas.
 Rural – Urban distribution: 68.84% & 31.16%
 Level of urbanization increased from 27.81% in 2001 Census to 31.16% in 2011 Census.
 The proportion of rural population declined from 72.19% to 68.84%.
Growth Rate of Population (in %):
The slowing down of the overall growth rate of population is due to the sharp decline in the growth rate
in rural areas, while the growth rate in urban areas remains almost the same.
Sex Ratio:
 The improvement in overall sex ratio is largely in urban areas.

 Though the Urban Child sex ratio is far worse than in the rural areas, the fall in Child sex ratio in
rural areas is around 4 times that in urban areas. In fact the decline is more gradual in urban
areas.
 There is a decline of 8.9 million children in Rural areas, while in Urban areas has shown increase
of 3.9 million.
Literacy Rates (in %)
 The improvement in literacy rate in rural area is two times that in urban areas.
 The rural urban literacy gap which was 21.2 percentage points in 2001, has come down to 16.1
percentage points in 2011.
Rural Areas:
All areas which are not categorized as Urban area are considered as Rural Area.
Number of Rural Units (or Villages) in India:
Census 2001 6,38,588

Census 2011 6,40,867
Increase 2,279
Top/Bottom three states in India: In terms of Urban population:

Top/Bottom three states in India: In terms of Rural population:
 Messy and Hidden Urbanization in India:

 Messy urbanization in India is reflected in the nearly 6.55 crore Indians who, according to the
2011 Census, live in urban slums, as well as the 13.7% of the urban population that lives below
the national poverty line.
 It is also reflected in the increasing uncontrolled expansion of cities.
 Hidden urbanization is seen in the large share of India’s population that lives in unorganized
settlements that possess urban characteristics but do not satisfy the civic criteria required to be
officially classified as urban, the report said.
 Urban Governance: 74th Amendment of the Constitution of India:

 This amendment Act has added Part IX-A to the Constitution of India.
 It is entitled as ‘The Municipalities’ and has inserted provisions from Articles 243-P to 243-ZG.
 In addition, the Act has also added Twelfth Schedule to the Constitution. It contains 18 functional
items of municipalities listed under Article 243-W.
Purpose:
 It gives constitutional status to the municipalities and has brought them under the purview of
judicial review.
 In other words, the state governments are under a constitutional obligation to add this new
system of municipalities in accordance with the provisions of the Act.
 The Act aims at revitalizing and strengthening the urban governments so that they may function
as effective units of local government.
 Effect of Urbanization:
With a high rate of urbanization significant changes have taken place. The effect of urbanization can be
summed up as follows:
Positive effect:
 Migration of rural people to urban areas.
 Employment opportunities in urban centres.
 Transport and communication facilities.
 Educational facilities.
 Increase in the standard of living.
Urbanization can yield positive effects if it takes place up to a desirable limit.
Extensive urbanization or indiscriminate growth of cities may result in adverse effects. They may be
as follows:
 Problem of over population

 Disintegration of Joint family
 High Cost of living:
 Increase in Crime rates
 Impersonal relations
 Problem of Pollution
 Stress
 Schemes / Programmes by the Government of India for urban development:
Note:
Update: July, 2017:
Government has mergerd Ministries of Urban Development, Housing and Urban Poverty
Alleviation:
 The government has merged the urban development and housing and urban poverty
alleviation ministries. Now this will be known as Ministry of Housing and Urban
Affairs (MoHUA). This is third time the ministries have been merged.
 The merger would help ensure cohesiveness in formulating policies related to urban issues and
cut the flab in bureaucracy.
 Smart Cities Mission:
Objectives:
 In the approach to the Smart Cities Mission, the objective is to promote cities that provide core
infrastructure and give a decent quality of life to its citizens, a clean and sustainable environment
and application of 'Smart' Solutions.
 The focus is on sustainable and inclusive development and the idea is to look at compact areas,
create a replicable model which will act like a light house to other aspiring cities.
Core Infrastructure Elements:
 Adequate water supply,
 Assured electricity supply,
 Sanitation, including solid waste management,
 Efficient urban mobility and public transport,
 Affordable housing, especially for the poor,
 Robust IT connectivity and digitalization,
 Good governance, especially e-Governance and citizen participation,

 Sustainable environment,
 Safety and security of citizens, particularly women, children and the elderly, and
 Health and education.
Coverage and Duration: The Mission will cover 100 cities and its duration will be five years (FY2015-16
to FY2019-20). The Mission may be continued thereafter in the light of an evaluation to be done by the
Ministry of Housing and Urban Affairs (MoHUA) and incorporating the learning into the Mission.
How Many Smart Cities in Each State/UT?
 The total number of 100 Smart Cities has been distributed among the States and UTs on the basis
of an equitable criterion.
 The formula gives equal weightage (50:50) to urban population of the State/UT and the number
of statutory towns in the State/UT.
 Based on this formula, each State/UT will, therefore, have a certain number of potential Smart
Cities, with each State/UT having at least one.
 The number of potential Smart Cities from each State/UT will be capped at the indicated number.
This distribution formula has also been used for allocation of funds under Atal Mission for
Rejuvenation and Urban Transformation - AMRUT.
 The distribution of Smart Cities will be reviewed after two years of the implementation of the
Mission. Based on an assessment of the performance of States/ULBs in the Challenge, some re-
allocation of the remaining potential Smart Cities among States may be required to be done by
the Ministry of Urban Development.
Current Update:
A new batch of 30 Smart cities has been announced. With the addition of these 30 smart cities, the
total cities picked up under the Smart City Mission have reached 90. Total proposed investment for
the development of 30 cities is Rs.57,393 crores. It includes Rs.46,879 crores for ensuring core
infrastructure and Rs.10,514 crores technology-based solutions for improving governance, service
delivery and utilization of infrastructure.
Financing of Smart Cities:
 The Smart City Mission will be operated as a Centrally Sponsored Scheme (CSS) and the Central
Government proposes to give financial support to the Mission to the extent of Rs.48,000 crores
over five years i.e. on an average Rs.100 crore per city per year.

 An equal amount, on a matching basis, will have to be contributed by the State/ULB; therefore,
nearly Rupees one lakh crore of Government/ULB funds will be available for Smart Cities
development.
 Atal Mission for Rejuvenation and Urban Transformation (AMRUT)

The purpose of Atal Mission for Rejuvenation and Urban Transformation (AMRUT) is to:
 ensure that every household has access to a tap with assured supply of water and a sewerage
connection;
 increase the amenity value of cities by developing greenery and well maintained open spaces
(e.g. parks); and
 reduce pollution by switching to public transport or constructing facilities for non-motorized
transport (e.g. walking and cycling).
The AMRUT scheme makes States equal partners in planning and implementation of projects, thus
actualizing the spirit of cooperative federalism by making the following change.
Earlier, the Ministry of Urban Development used to give project-by-project sanctions but in the AMRUT
this has been replaced by approval of the State Annual Action Plan once a year by the MoUD (now
Ministry of Housing and Urban Affairs (MoHUA)) and the States have to give project sanctions and
approval at their end.
Coverage: Five hundred cities will be taken up under AMRUT. The list of cities will be notified at the
appropriate time.
Fund allocation: The total outlay for AMRUT is Rs. 50,000 crore for five years from FY 2015-16 to FY
2019-20 and the Mission will be operated as a Centrally Sponsored Scheme.
2015-2016 2016-17 2016-17 2017-18
(cr) (cr) (cr)
AMRUT 4185 7295 9559 9000

 Pradhan Mantri Awas Yojna
Pradhan Mantri Awas Yojna (PMAY) is a mission started with an aim ‘Housing For All’ (HFA) scheme by
NDA Government to be achieved by the year 2022, that is when India will be completing its 75 years of
Independence.
The mission started in 2015 and will be attained in seven years i.e., during 2015 – 2022.
Objectives of Pradhan Mantri Awas Yojna (PMAY) – Housing for All

A comprehensive mission of PMAY Housing Scheme aims to create:
 Affordable homes with water connection, toilet facilities, 24x7 electricity supply and complete
access.
 2 crore houses to be built across nation’s length and breadth for the urban poor by 2022.
 Targeting the Lower Income Groups (LIG) and Economically Weaker Section of our society (EWS),
basically the urban poor by the year 2022.
 2 million non-slum urban poor households are proposed to be covered under the Mission
Pradhan Mantri Awas Yojna (PMAY) Targeted group or beneficiary

 Indian women of all religions and castes. Everyone will be equally eligible no biased treatment
on basis of caste or religion.
 People who come from low income and economically weaker sections of the society.
 ST (Scheduled Tribes).
 SC (Scheduled Castes).
How Pradhan Mantri Awas Yojna (PMAY) will work:

PMAY Housing Scheme will work by providing central assistance to Urban Local Bodies (ULBs) as well as
other employed agencies through States/UTs.
The following are the options available:
 Credit Linked Subsidy: Under the Credit Linked Interest Subsidy component, interest subsidy of
6.5 percent on housing loans availed upto a tenure of 15 years will be provided to Economically
Weaker Sections / Low Income Groups categories, wherein the subsidy pay-out would be about
Rs.2.3 lakh per house for both the categories. This subsidy will be available only for amount upto
12 lakhs.

 Slum rehabilitation for Slum Dwellers: Central grant of Rs. one lakh per house, on an average,
will be available under the slum rehabilitation programme.
 Affordable Housing in Partnership and Beneficiary-led individual house construction or
enhancement: Central assistance at the rate of Rs.1.5 lakh per house for EWS category will be
provided under this category.
 The scheme will be implemented as a Centrally Sponsored Scheme except the credit linked
subsidy component, which will be implemented as a Central Sector Scheme.
 The Mission also prescribes certain mandatory reforms for easing up the urban land market for
housing, to make adequate urban land available for affordable housing.
 Houses constructed under the mission would be allotted in the name of the female head of the
households or in the joint name of the male head of the household and his wife.
 All statutory towns as per Census 2011 and towns notified subsequently would be eligible for
coverage under the Mission.
Update: Feb 2017

Cabinet approves amendments to Credit Linked Subsidy Scheme under PMAY-U
The Union Cabinet approved certain amendments to the Credit Linked Subsidy Scheme (CLSS) under
the Pradhan Mantri Awas Yojana – Urban (PMAY-U).
Under CLSS, a subsidy is provided on home loans taken by eligible urban poor (Economically Weaker
Section (EWS)/ Lower Income Group (LIG) for buying or constructing a house.
The amendments seek to:
 increase the off-take in EWS and LIG segments under PMAY-U,
 reach out to the middle income group,
 make procedures easy for the primary pending institutions under the scheme, and
 provide incentives to the primary lending institutions for increased participation
Amendments approved include:
 Currently, eligible beneficiaries seeking housing loans are eligible for an interest subsidy of 6.5
% for a period of 15 years or the tenure of loan, whichever is shorter.
 The amendments propose to increase the threshold of 15 years to 20 years. This scheme will
be renamed as the CLSS for EWS/ LIG.
 Currently, only EWS and LIG are eligible for the subsidy. The amendments propose to introduce
a new CLSS for the middle income groups.

 Primary Lending Institutions that have joined CLSS will have the option to extend their mandate
to CLSS for middle income groups with appropriate changes.
 Rs 1,000 crore will be allocated towards CLSS for middle income groups in Budget 2017-18.
Update: March, 2017:

 The government’s credit-linked interest subsidy scheme for housing loans taken by people in
mid-income groups has been made effective from 1 January, 2017.
 Middle income groups with annual incomes above Rs 6 lakhs and up to Rs 18 lakhs per year are
eligible for interest subsidy on housing loans under the new CLSS (MIG).
 Under the scheme, an interest subsidy of 4% on housing loans of up to Rs 9 lakh for those with
an income of Rs 12 lakh per year and of 3% on housing loans of up to Rs 12 lakh for those
having an income of Rs 18 lakh per year will be given.
Update: September, 2017:

 The central government has announced new public private partnerships (PPP) to promote
private investments in affordable housing in line with its Housing for All target by 2022.
 The policy seeks to assign risks among the government, developers and financial institutions,
to “those who can manage them best, besides leveraging under-utilized and unutilized private
and public lands.”
What are the eight models?

 Out of the eight PPP models, two involve extending central assistance of around Rs.2.5 lakh
per house to be built by private builders even on private land as interest subsidy on bank loans
in upfront payment under the Credit Linked Subsidy Component (CLSS) component of
the Pradhan Mantri Awas Yojana (Urban).
 Under the second option, central assistance of Rs.1.50 lakh per each house to be built on
private lands would be provided, in case the beneficiaries do not intend to take bank loan.
 The other six options include promoting affordable housing with private investments using
government land. A few of the models include allocating government land to private firms
based on the least cost of construction.
 Under this option, private builders can design, build and transfer houses built on government
lands to public authorities. Payment to builders will be made by the public authority based on
progress of project as per agreed upon milestones and buyers will pay to the government.
 Under the six government land-based PPP models, beneficiaries can avail central assistance of
Rs.1 to 2.50 lakh per house as provisioned under different components of PMAY (Urban).
 Beneficiaries will be identified as per the norms of PMAY (Urban).
Three Phases of Pradhan Mantri Awas Yojna (PMAY)

 PMAY Phase 1: From April 2015 to March 2017, this phase will begin the development of total
100 cities that must be completed during this phase.
 PMAY Phase 2: From April 2017 to March 2019, after Phase 1, the development of total number
of 200 more cities will be covered.
 PMAY Phase 3: From April 2019 to March 2022, All the remaining cities of India will complete its
PMAY housing development process.
The above are the features of the Pradhan Mantri Awas Yojana (Urban).
The following are the features of Pradhan Mantri Awas Yojana (Gramin).
 Pradhan Mantri Gramin Awaas Yojana (PMGAY), previously Indira Awaas Yojana (IAY), is a
social welfare flagship programme, created by the Indian Government, to provide housing for
the rural poor in India.
 Pradhan Mantri Awaas Yojana (Gramin), in its first phase the target is to complete one crore
houses by March 2019.
 A total of 4 crore homes would be constructed under PMAY-G in rural areas across the country
by the year 2022.
 The unit cost for these houses has been significantly increased and now through convergence a
minimum support of nearly Rs. 1.5 lakh to Rs. 1.6 lakh to a household is available.
Budget Allocation:
2015-2016 2016-17 2016-17 2017-18

Actuals (cr)

Budget estimates Revised Budget estimates
(cr) estimates (cr) (cr)
11603 20075 20936 29043
Pradhan Mantri Awas
Yojana
PMAY- Rural 10116 15000 16000 23000
PMAY- Urban 1487 5075 4936 6043
 Swachh Bharat Mission (SBM)

 To accelerate the efforts to achieve universal sanitation coverage and to put focus on sanitation,
the Prime Minister of India launched the Swachh Bharat Mission on 2nd October, 2014.
 The Mission Coordinator shall be Secretary, Ministry of Drinking Water and Sanitation (MDWS)
with two Sub-Missions, the Swachh Bharat Mission (Gramin) and the Swachh Bharat Mission
(Urban), which aims to achieve Swachh Bharat by 2019, as a fitting tribute to the 150th Birth
Anniversary of Mahatma Gandhi.
 The nodal ministry of the Swachh Bharat Mission is Ministry of Drinking Water and Sanitation (for
Gramin) and Ministry of Urban Development which is now called Ministry of Housing and Urban
Affairs (MoHUA) (for Urban).
Objectives of Swatch Bharat (Gramin)

The main objectives of the SBM (G) are as under:
 Bring about an improvement in the general quality of life in the rural areas, by promoting
cleanliness, hygiene and eliminating open defecation.
 Accelerate sanitation coverage in rural areas to achieve the vision of Swachh Bharat by 2nd
October 2019.
 Motivate Communities and Panchayati Raj Institutions to adopt sustainable sanitation practices
and facilities through awareness creation and health education.
 Encourage cost effective and appropriate technologies for ecologically safe and sustainable
sanitation.
 Develop wherever required, Community managed sanitation systems focusing on scientific Solid
& Liquid Waste Management systems for overall cleanliness in the rural areas.
Implementation: Implementation of SBM (G) is proposed with ‘District‘ as the base unit, with the goal
of creating ODF GPs.
Recent updates regarding Open Defecation Free States (latest June 2017):
 Under the Swachh Bharat Mission Gramin (SBM-G), rural Uttarakhand and rural Haryana have
declared themselves as the 4th and 5th Open Defecation Free (ODF) States of India.
 The two have joined the league of Sikkim, Himachal Pradesh and Kerala, which were the first three
states to be declared ODF.
Swachh Bharat Mission (SBM) Urban

According to Census 2011, India’s urban population is 377 million or 31% of the total population. These
numbers are expected to increase to 600 million by 2031. The Census 2011 also showed that in 4,041
statutory towns, close to eight million households do not have access to toilets and defecate in the open
(7.90 million).
The Mission will be in force till 2nd October 2019.
Coverage: All Statutory towns will be covered under the Mission.
Components of SBM-Urban: The Mission has the following components:

Household toilets, including conversion of insanitary latrines into pour-flush latrines: SBM (Urban)
aims to ensure that a) No households engage in the practice of open defecation, b) No new insanitary
toilets are constructed during the mission period and c) Pit latrines are converted to sanitary latrines.
The Target Group for construction of household units of Toilets, thus, is: (i) 80% of urban households
engaging in open defecation (ii) All households with insanitary latrines (iii) All households with single-pit
latrines
Community toilets: Under SBM (Urban), it is estimated that about 20% of the urban households in cities,
who are currently practicing open defecation are likely to use community toilets as a solution due to
land and space constraints in constructing individual household latrine.
Public toilets: Under SBM (Urban), States and ULBs will ensure that a sufficient number of public toilets
are constructed in each city. All prominent places within the city attracting floating population should
be covered

By Public Toilets, it is implied that these are to be provided for the floating population / general public
in places such as markets, train stations, tourist places, near office complexes, or other public areas
where there are considerable number of people passing by.
By Community toilets, it is implied that a shared facility provided by and for a group of residents or
an entire settlement. Community toilet blocks are used primarily in low-income and/or informal
settlements / slums, where space and/or land are constraints in providing a household toilet. These
are for a more or less fixed user group.
Solid waste management: Municipal Solid Waste Management (MSWM) refers to a systematic process
that comprises of waste segregation and storage at source, primary collection, secondary storage,
transportation, secondary segregation, resource recovery, processing, treatment, and final disposal of
solid waste
Funding pattern
States will contribute a minimum of 25% funds towards all components to match 75% Central Share.
This will be 10% in the case of North East and special category States.
2015-2016 2016-17 2016-17 2017-18

Actuals (cr) Budget estimates Revised Budget estimates
(cr) estimates (cr) (cr)
Swatch Bharat 7469 11300 12800 16248
Mission
SBM- Rural 6703 9000 10500 13948
SBM- Urban 766 2300 2300 2300
Swachh Bharat Kosh (SBK): It is been set up to attract Corporate Social Responsibility (CSR) funds from
Corporate Sector and contributions from individuals and philanthropists to achieve the objective of
Clean India by the year 2019.

Swachh Vidyalaya Abhiyan
The Ministry of Human Resource Development has launched Swachh Vidyalaya Programme under
Swachh Bharat Mission with an objective to provide separate toilets for boys and girls in all government
schools within one year. The Ministry financially supports States/Union Territories inter alia to provide
toilets for girls and boys in schools under SarvaShiksha Abhiyan (SSA) and RashtriyaMadhyamikShiksha
Abhiyan (RMSA).
Swachh Survekshan: Swachh Survekshan is a ranking exercise taken up by the Government of India to
assess rural and urban areas for their levels of cleanliness and active implementation of Swachhata
mission initiatives in a timely and innovative manner.
Who conducts it? The Ministry of Housing and Urban Affairs, Government of India takes up the Swachh
Survekshan in urban areas and the Ministry of Drinking Water and Sanitation in rural areas. The Quality
Council of India (QCI) has been commissioned the responsibility of carrying out the assessment.
Background:
The Survekshan is divided into three parts: Service level status, Independent Observation and Citizen
feedback. The cities have been ranked individually on their performance on above parts as well as their
overall performance.
Swachh Survekshan – Urban
For the Year 2017:
The Ministry of Housing and Urban Affairs announced the Cleanest Cities in the Country and the fastest
moving cities on sanitation ladder under Swachh Sarvekshan-2017.
Important points of the survey:
 Indore has been adjudged as the cleanest city in India while Gonda in Uttar Pradesh has been
ranked as the dirtiest city among surveyed.
 In total, 434 cities and towns with a population of one lakh and above were surveyed. Last year
survey had surveyed only 73 cities with a population of 10 lakh and above.
 Cities and towns in West Bengal did not take part in the survey as the Mamata Banerjee
government did not participate in the Swachh Survekshan.

 The criteria for selecting the cities for ranking for this year included 45% marks for cities becoming
open defecation-free; solid waste management like sweeping, collection, transportation and
processing of garbage; education and capacity building.
 25% marks were given for field inspection and another 30% marks were given for citizen
feedback.
 In total, feedback from at least 18 lakh citizens across the surveyed cities about the sanitation
was received.
 The top ten highly ranked cities are: Indore (1st), Bhopal (2nd), Visakhapatnam (3rd), Surat (4th),
Mysuru (5th), Tiruchirapally of Tamil Nadu (6th), New Delhi Municipal Council (7th), Navi Mumbai
(8th), Tirupati of Andhra Pradesh (9th), Vadodara(10th).
 Overall, Jharkhand and Chattisgarh have emerged as the best performing states in Swachh
Survekshan, 2017. States like Gujarat, Madhya Pradesh and Andhra Pradesh have performed well
in sanitation rankings.
Update: July, 2017:
Swachh Survekshan-2018 launched to assess sanitation in all 4041 cities and towns of the country:
 Minister of Housing & Urban Affairs has launched ‘Swachh Survekshan-2018’ to rank all the
4,041 cities and towns of the country on 31st of July 2017.
 This will be third in the series. A comprehensive Survey Tool Kit which explains the
methodology, weightages and new features and plunge areas was also released.
 As per the Survey Toolkit released, cities and towns will prepare over the next six months
before field assessment begins on the fourth of January next year with survey results
scheduled to be announced on 26th March 2018.
 The 4,041 cities and towns are to be covered under Swachh Survekshan-2018, results of which
will be announced in March next year.
 It includes 500 with a population of one lakh and above each and state capitals and 3,541 with
population below one lakh each.
 For these 3,541 towns, State and Zonal rankings will be announced besides national rankings
for the other 500 cities and towns.
 The total weightage for Citizen Feedback and Independent observation of sanitation have been
increased by 10% over that of 2017 Survey.

 To encourage cities take up innovative sanitation practices and solutions, a new element of
‘Innovation’ has been introduced this year with a weightage of 5%.
Swachh Survekshan - Rural (Gramin)
The Ministry of Drinking Water and Sanitation commissioned the first Swachh Survekshan for rural India
during May 2016. A total of 22 hill districts and 53 plain areas were assessed.
For the Year 2017:
 The Ministry of Drinking Water and Sanitation launched a third party verification survey report
to take stock of the progress already made by the Mission in rural India.
 The Quality Council of India (QCI) has conducted a transparent third-party assessment of the
present status of rural sanitation in all States and UTs, called Swachh Survekshan Gramin 2017.
 Highlights: Kerala and Haryana have topped the survey.
 Northeastern States of Sikkim, Manipur and Nagaland have performed well with 95% rural
households covered by toilets. And so were the Himalayan States of Himachal Pradesh and
Uttarakhand with over 90% toilet coverage of the rural houses.
 Bihar, Jharkhand, UP and Odisha were among the worst performers in terms of rural sanitation.
 In Bihar, only 30% of the rural households had access to toilets while Uttar Pradesh was
marginally better at 37%.
 Under the Swachh Survekshan Gramin 2017, QCI surveyed 1.4 lakh rural households across 4626
villages, and found the overall toilet coverage to be 62.45%.
 At the time of the survey, i.e. May-June 2017, the Swachh Bharat Mission (Gramin) MIS reported
the coverage to be 63.73%.
 The survey also observed that 91.29% of the people having access to a toilet.
 To encourage States and districts to improve their Sanitation coverage and Solid Liquid Waste
Management (SLWM), the ministry will also begin ranking all districts in India based on the data
available on the SBM-G IMIS quarterly.

 The ranking will be done based on parameters of Performance, Sustainability and Transparency,
and the first ranking will be announced on 2nd October, 2017 for the quarter July-September
2017.
 To instill healthy competition amongst districts, they will also be given awards based on this
ranking on a quarterly basis.
 The formula for calculating these rankings will be: Total score (100) = Performance (50) +
Sustainability (25) + Transparency (25)
Update: September, October, 2017:

Swachhata Hi Seva:
 The President Shri Ram Nath Kovind launched the nationwide jan aandolan, Swachhta Hi Seva,
from Iswarigunj, a village in Kanpur district of Uttar Pradesh on 15 th September, 2017.
 “Swachhta Hi Seva” Campaign is an unprecedented campaign to highlight, once again, the jan
aandolan that is the Swachh Bharat Mission. This follows an impassioned call by the Prime
Minister, Shri Narendra Modi, ahead of the 3rd anniversary of Swachh Bharat Mission that falls
on 2nd October, 2017.
 The objective of the campaign is to mobilise people between 15th September and 2nd October,
reigniting the “jan aandolan” for sanitation.
 Union Ministers, MLAs, MPs, iconic celebrities of India, sports stars, inter-faith leaders,
corporates, etc. have been appealed to join in this campaign towards swachhta.
02, October, 2017:

 Five more States viz., Madhya Pradesh, Maharashtra, Chattisgarh, Jharkhand and Haryana have
reached the milestone of making all cities and towns Open Defecation Free as the Swacch
Bharat Mission completed three years.
 This was announced by the Minister of Housing and Urban Affairs Shri Hardeep Singh Puri.
 As against the target of building about 66 lakh individual household toilets in urban areas, 38
lakh toilets have already been built and construction of another 14 lakh toilets is in progress.
 Over two lakh community and public toilet seats have been built as against the mission target
of five lakh toilet seats.
 Rural Gujarat also attained the ODF status.
 PRASAD scheme:

 PRASAD (National mission on pilgrimage rejuvenation and spiritual augmentation drive) is a
MISSION MODE scheme to develop world class infrastructure facilities at 13 cities under the
Ministry of Tourism.
 Under it, 13 cities Ajmer, Amritsar, Amravati, Dwarka, Gaya, Kamakhaya, Kancheepuram,
Kedarnath, Mathura, Patna, Puri, Varanasi and Velankanni have been identified for development.
Budget 2017-18:
100 crore has been allocated for Pilgrimage Rejuvenation and Spiritual Augmentation Drive (PRASAD).
Rs. 412 crore provided for promotion and publicity of various programmes and schemes.
 HRIDAY
 National Heritage City Development and Augmentation Yojana (HRIDAY) is focused on holistic
development of heritage cities.
 The main objective of HRIDAY is to preserve character of the soul of heritage city and facilitate
inclusive heritage linked urban development in partnership with State Government
 The duration of HRIDAY schemes would be Four Years starting from December 2014 (i.e. Till
December 2018).
 It is a central sector scheme with 100 percent funding coming from Central Government.
 The scheme will broadly focus on four theme areas i.e. Physical Infrastructure, Institutional
Infrastructure, economic Infrastructure & Social Infrastructure for reviving and revitalizing the
soul of Heritage City.
 The projects can be funded directly or through support from other stakeholders including private
sector.
 Coverage (12 Cities) - Ajmer, Amravati, Amritsar, Badami, Dwarka, Gaya, Kanchipuram, Mathura,
Puri, Varanasi, Velankanni, Warangal.
 The Scheme supports development of core heritage infrastructure projects that include
revitalization of urban infrastructure for areas around heritage assets.
 Pradhan Mantri Surakshit Sadak Yojana: The scheme has been launched by the Ministry of Road
Transport and Highways in the year 2016.
Features:
 The scheme is basically an initiative to make the roads safer by eliminating the dangerous spots
on highways
 The central government eliminate dangerous road sites where accidents occur more frequently
by using the better design and road engineering
 Government also set up railings on hill roads running along deep gorges
 According to the World Health Organization, more than 231,000 people killed in road in road
accident in the country every year. The government has aims reduce this number by the year
2020
 Initial fund of Rs.2,000 crore to make road safer under this scheme.
 Green Urban Transport scheme:

 To reduce its carbon footprint as committed in the Paris climate change agreement, the National
Democratic Alliance government has announced a green urban mobility scheme with a central
assistance of Rs.25,000 crore in November, 2016.
 The green urban transport scheme seeks to encourage growth of urban transport along low
carbon path for substantial and measurable reduction in pollution, provide a permanent and
sustainable framework for funding urban mobility projects at national, state and city levels with
minimum recourse to budgetary support by encouraging innovative financing of projects.
 The government has been targeting to move towards a gas-based economy to cut down on
emissions and has also set a target to create capacity to generate 175 gigawatt of renewable
energy by 2022 and reduce dependence on fossil fuels.
 The new policy will encourage private investments in climate-friendly and sustainable public
transport systems such as Metro rail, non-motorised transport and other low-carbon emitting
systems in urban areas.
 A memorandum of understanding has been signed between the Urban Transport Institute of
India and Korea Transport Institute seeking technical co-operation in urban transport.
Features of GUTS:
 Vehicles introduced under this Green Urban Transport Scheme (GUTS) are to be fully featured
with Intelligent Transport System (ITS).
 Government plans to place various hi-tech facilities in public transport vehicles under the Green
Urban Transport Scheme (GUTS) like Free Wi-Fi.
 Features like ITS and placing hi-tech facilities in public transport vehicles, the it will encourage
more people to make use of public transports rather than preferring individual or private mode
of transport.
Eligibility for Green Urban Transport Scheme: Urban areas must have population of above 5 Lakh are
eligible to implement Green Urban Transport Scheme (GUTS).
Electric Vehicles in India by 2030:
 The centre is preparing a road map to ensure that only electric vehicles will be produced and
sold in the country by 2030.
 The NITI Ayog was preparing the road map for the same. Different ministries had given their
inputs and ideas, which are being worked out by experts, as part of a national mission to
promote solar energy power plants and electric vehicles.
 As a significant step in this direction, the centre plans to procure atleast 10,000 electric cars to
phase out the government vehicles in New Delhi.
 Government is of the view that hybrid vehicles are unviable and it is an intermediate
technology.
 Smart Ganga City Scheme:

 Union Water Resources, River Development and Ganga Rejuvenation Minister and Minister of
Housing and Urban Affairs (MoHUA) launched Smart Ganga City Scheme in 10 cities located along
Ganga to set up Sewage Treatment Plants (STPs) and improve drainage on August 13th 2016.
 This programme comes under the Namami Ganga project.
 These cities are – Haridwar, Rishikesh, Mathura-Vrindavan, Varanasi, Kanpur, Allahabad,
Lucknow, Patna, Sahibgunj and Barrackpore.
 These cities have been chosen by the National Mission for Clean Ganga where the programme
will be established in the first phase for infrastructure development for sewage treatment on
hybrid annuity mode on public private partnership basis.
Worksheet

2. True /False
3. MCQs
4. Match the column

Happy Learning!!!

ECONOMICS AND SOCIAL ISSUES (ESI)
TOPIC
MIGRATION
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Contents
What is Migration? ................................................................................................................................................ 4
Why is migration so significant? .......................................................................................................................... 4
Why is the study of migration very important? ................................................................................................. 4
Few facts related to migration at the global level: ......................................................................................... 5
Total migrants in the world:.............................................................................................................................. 5
Popular destination of international migrants: ............................................................................................. 5
Countries by the size of the Diaspora: ........................................................................................................... 5
Region-wise distribution of international migrants: ...................................................................................... 5
Percentage of international migrants to the total population of the country: ....................................... 5
Various terms that we come across related to migration: ............................................................................. 6
Immigration and Emigration:........................................................................................................................... 6
In-migration and Out-migration:..................................................................................................................... 6
Gross and Net Migration: ................................................................................................................................. 6
Internal Migration and External Migration: .................................................................................................... 7
Types of Migration: ............................................................................................................................................... 7
Forced Migration: ............................................................................................................................................. 7
Irregular Migration:............................................................................................................................................ 9
Human Trafficking: ............................................................................................................................................ 9
Forced and Voluntary Return:......................................................................................................................... 9
Internal migration in India:................................................................................................................................. 10
Constitutional Provisions: ................................................................................................................................ 10
Important data related to Migration in India: (as observed by the group in the report). ....................... 10
Migration: ......................................................................................................................................................... 10
Reasons for Migration: .................................................................................................................................... 11
Migrant Workforce: ......................................................................................................................................... 11
Nature of Jobs: ................................................................................................................................................ 11
Share of all migrants going to other states by Social Category: (Source: Census 2001, NSS 2007-08)12
Reasons for Migration: ....................................................................................................................................... 13
Economic Factors: .......................................................................................................................................... 13
Socio-Cultural and Political Factors ............................................................................................................. 14
Consequences of Migration: ............................................................................................................................ 14
Economic ......................................................................................................................................................... 14
Demographic .................................................................................................................................................. 15
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Social and Psychological .............................................................................................................................. 15
For first time since 1921, India's urban population has gone up by more than its rural population ............................ 15
Highlights regarding migration in the Economic Survey 2016-17:................................................................ 16
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What is Migration?
 Migration is usually defined as a geographical movement of people involving a change from their
usual place of residence.
 Human migration is the movement by people from one place to another with the intentions of
settling, permanently in the new location.
 But it is distinguished from temporary and very short distance moves. The movement is often over
long distances and from one country to another.
Why is migration so significant?

 Migration is the third factor for changes in the population, the other being birth rate and death
rate.
 As compared to birth rate and death rate, migration affects the size of population differently.
Migration is not a biological event like birth rate and death rate, but is influenced by the social,
cultural, economic and political factors.
 Migration is carried by the decision of a person or group of persons.
 The changes occurring in the birth rate and death rate do not affect the size and structure of the
population on a large scale, while migration, at any time, may cause large scale changes in the size
and structure of the population.
Why is the study of migration very important?

 The study of migration is of vital importance because the birth rate, death rate and migration
determine the size of population, the population growth rate and thus the structure of population.
In addition, migration plays an important role in determining the distribution of population and
supply of labour in the country.
 Thus, the study of migration is also useful for formulating economic and other policies by the
government, economists, sociologists, politicians, and planners along with demographers.
 Migration shows the trends of social changes. From the historical viewpoint during the process of
industrialization and economic development, people migrate from farms to industries, from
villages to cities, from one city to another and from one country to another. In modern times,
technological changes are taking place in Asia, Africa and Latin America due to which these regions
are witnessing large-scale migration from rural to urban areas.
 Economists are interested in the study of migration because migration affects the supply of skilled
and semi-skilled labourers, development of industries and commerce causing changes in the
employment structure of the migrated people.
 Formulation of economic policies has a close relation with the process of migration because
migration affects the economic and social development of a country.
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Few facts related to migration at the global level:
Total migrants in the world:

 Over 1 billion people in the world are migrants or more than 1 in 7 people globally. Out of this,
nearly 244 million are international migrants and around 740 million are internal migrants.
 The proportion of international migrants in the world population is only slightly higher than that
recorded over the past decades, at 3.3 per cent compared to 2.8 per cent in 2000, and 3.2 per cent
in 2013.
 Women account for 48 per cent of the global international migrant stock, although the share varies
widely across major regions: for instance, the figure is lower in Asia (42%) due to the recent large
increase in the stock of male migrants in the region, while it is higher in Europe (52.4%) and
Northern America (51.2%).
Popular destination of international migrants:

 About 51 per cent of international migrants reside in 10 countries.
 The most popular destination country is the United States, where 46.6 million foreign-born
officially resided in 2015, followed by Germany (12 million), the Russian Federation (11.9 million),
Saudi Arabia (10.2 million), the United Kingdom (8.5 million), the United Arab Emirates (8.1
million), Canada and France (7.8 million each), Australia (6.7 million) and Spain (5.8 million).
Countries by the size of the Diaspora:

The top five countries by size of their diasporas (number of international migrants living abroad) in 2015
were India (15.6 million), Mexico (12.4 million), the Russian Federation (10.6 million), China (9.5 million),
and Bangladesh (7.2 million).
Region-wise distribution of international migrants:

 The proportion of international migrants in the destination countries varies significantly across
States.
 It is generally lower in countries in the Latin America and the Caribbean region (1.5% on average),
as well as countries in Central, Eastern and Southeast Asia, with some exceptions, e.g. Singapore,
where over 45 per cent of the population is composed of international migrants.
 Higher proportions are found in Europe (10% on average), with countries in Northern and Western
Europe having the highest shares (e.g. 17.5% in Austria, almost 17% in Sweden, and about 15% in
Germany); Northern America (15.2% in the United States and almost 22% in Canada), Oceania
(20.6%, with over 28%of the Australian population being foreign-born), and Western Asia (14.8%).
Percentage of international migrants to the total population of the country:

 International migrants constitute substantial portions of the total population in most Gulf
Cooperation Council countries, 88.4 per cent in the United Arab Emirates, 75.5 per cent in Qatar,
73.6 per cent in Kuwait and over 51 per cent in Bahrain.
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 Among the countries with a significant proportion of their population abroad are some States in
the European and Eastern Asia regions, e.g. Bosnia and Herzegovina, with over 43 per cent of its
nationals residing abroad, Albania (about 39%), and Armenia (over 31%), as well as Portugal (over
22%) and Ireland (19%).
Various terms that we come across related to migration:
Immigration and Emigration:

When people from one country move permanently to another country, for example, if people from India
move to Germany then for Germany, it is termed as Immigration, whereas for India it is termed as
Emigration.
In-migration and Out-migration:

 In-migration means migration occurring within an area only, while out-migration means migration
out of the area.
 Both types of migration are called internal migration occurring within the country.
 Migration from Bihar to Bengal is in-migration for Bengal, while it is out- migration for Bihar.
Gross and Net Migration:

 During any time period, the total number of persons coming in the country and the total number
of people going out of the country for residing is called gross migration.
 The difference between the total number of persons coming to reside in a country and going out of
the country for residing during any time period is termed as net migration.
Data related to Net Migration in India:

 India’s net migration rate is negative, -0.33% equaled to -3.34million in 2011 which was positive,
0.09% or 0.74 million in 2001. It is supported by NSS, 2007-08 which has estimated -0.26% or -2.6
million migrants.
 It indicates that during 1990s, India gained more immigrants compared to emigrants; major
contributing countries being Bangladesh and Nepal.
 During 2000s, India has walked just opposite. Kerala, Andhra Pradesh and Punjab was the major
supplier of overseas migrants in 2011. Kerala’s robust per capita growth rate from 4.1% to
7.5%during 2000s matches with decline net migration rate, but rest are not.
Net migration in Indian States:

 The positive net migration rate has gone down in the 2011 Census, compared to the 2001 for
high-income states like Maharashtra, Haryana, Punjab and Gujarat. Some middle income states,
namely Tamil Nadu and Karnataka, have recorded highest net gain.
 Though the net migration rate is higher than the 2001 Census, the annual growth of gross in-
migration rate that is 127% is far higher than the growth rate of annual gross out-migration,
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30.7%.
 Likewise, Odisha and Uttar Pradesh reduced their net rate in 2011 compared to the previous
census. In Madhya Pradesh, Tamil Nadu and Jammu and Kashmir, net migration rates were
negative in 2001, but these turn into positive in 2011, among these Tamil Nadu exerts a huge pull
that makes it the highest ranking in terms of net gain. It is followed by Karnataka and Maharashtra.
 Decline of negative net migration in states such as Bihar, Odisha and Madhya Pradesh, could be
attributed with high per capita growth rate during the 2000s.
Internal Migration and External Migration:

 Internal migration means the movement of people in different states and regions within a country
from one place to another.
 On the other hand, external or international migration refers to the movement of people from one
country to another for permanent settlement.
Types of Migration:
Forced Migration:
It is a general term that refers to the movement of refugees and internally displaced people (those
displaced by conflicts within their country of origin) as well as people displaced by natural or
environmental disasters, chemical or nuclear disasters, famine, or development projects.
The following are the terms related to forced migration:
Refugees:
 A refugee is someone who has been forced to flee his or her country because of persecution, war,
or violence.
 A refugee has a well-founded fear of persecution for reasons of race, religion, nationality, political
opinion or membership in a particular social group.
Data:
 Turkey and Pakistan are the main refugee-hosting countries globally (in absolute terms), with 2.5
million and 1.6 million refugees respectively registered in the countries by the end of 2015.
 In its fifth year of civil conflict, the Syrian Arab Republic was the largest refugee-producing country
by the end of 2015, with a refugee population of 4.9 million.
 The vast majority of Syrian refugees were hosted by countries neighboring the Syrian Arab
Republic; namely Turkey, Lebanon, Jordan, Iraq and Egypt.
 Afghanistan continues to be a major country of origin for refugees, with a refugee population
estimated at2.7 million at the end of 2015. Somalia follows as the third refugee-producing country,
with over 1 million refugees.
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Conflict-induced internal displacement:
 It occurs when people are forced to flee their homes as a result of armed conflict including civil
war, generalized violence, and persecution on the grounds of nationality, race, religion, political
opinion or social group.
 This happens within the borders of the parent country.
Data:
 Yemen saw the highest level of conflict and violence induced displacement in 2015, with over 2.5
million people displaced due to the exacerbation of conflict in the country.
 Yemen and other 5 countries accounted for 84% of the total number of newly displaced people
worldwide in 2015; namely Iraq, Ukraine, Sudan, the Democratic Republic of the Congo and
Afghanistan.
 Colombia was the country with the largest IDP population worldwide by the end of 2015, with 6.9
million people displaced within the country. It was followed by the Syrian Arab Republic, Sudan
and Nigeria.
Asylum-seekers:
 Asylum seeker is a person who has left his country of origin and formally applied for asylum in
another country but whose application has not yet been concluded. A person is officially a refugee
when they have their claim for asylum accepted by the government.
 The number of asylum-seekers has consistently grown over the last four years and is at a record
high.
Data:
 Germany exceeded the Russian Federation and became the largest single recipient of first-time
individual asylum claims globally in 2015.
 The country was followed by the United States, Sweden and Russian Federation.
 The EU-28 as a whole received over 1.2 million new asylum claims in 2015, more than double the
number of asylum claims in 2014 (almost 563,000).
Disaster Induced Internal Displacement:
 It happens when people are forced or obliged to flee or leave their homes or places of habitual
residence for an array of reasons, such as human-made and natural disasters.
 People don’t leave their parent country.
Data:
 Between 2008 and 2014, an average of 26.4 million people per year was displaced by disasters.
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 87 per cent of disaster-induced displacement in 2014 occurred in Asia, with approximately 16.7
million people being forced to leave their homes during that year.
 The majority of displaced people globally were displaced by weather-related disasters, only a small
minority by geophysical hazards.
 The likelihood of being displaced by a disaster today is 60 per cent higher than four decades ago.
Irregular Migration:
Irregular migration refers to illegal movement to work in a country without authorization to work,
however there is no clear or universally accepted definition of the term.
Data:
 Greece was by far the main entry point of undocumented migrants and asylum-seekers to Europe
in 2015. Irregular arrivals to Greece surpassed 900,000 in 2015, and were eleven times higher than
in 2014 (77,163).
 Syrians accounted for over 50 percent of irregular arrivals in Greece in 2015.
Human Trafficking:
The action or practice of illegally transporting people from one country or area to another, typically for
the purposes of forced labour or commercial sexual exploitation.
Data:
 An estimated 21 million individuals are victims of forced labour globally, according to ILO
(International Labour Organization).
 The figure includes cases of human trafficking for the purposes of sexual or labour exploitation;
however, the real number of victims of human trafficking remains unknown.
 Over half of the estimated victims of forced labour are found in the Asia-Pacific region (11.7
million), followed by Africa (3.7 million) and Latin America (1.8 million).
 The same estimates suggest that over a third of the victims of forced labour worldwide are minors,
and the majority are women and girls (11.4 million), particularly in the case of sexual exploitation
(98%of the estimated 4.5 million victims of sexual trafficking); conversely, labour exploitation in
the private economy appears to mostly concern males (60% of 14.2 million).
 It must be noted that human trafficking does not necessarily involve crossing of an international
border; however, undocumented migrants crossing borders irregularly are particularly vulnerable
to becoming victims of human trafficking.
Forced and Voluntary Return:

Forced return is the compulsory return of an individual to the country of origin, transit or third country,
on the basis of an administrative or judicial act, whereas a voluntary return is an assisted or independent
return to the country of origin, transit or third country based on the free will of the returnee.
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Internal migration in India:
Constitutional Provisions:
 The Constitution of India guarantees freedom of movement for all citizens.
 The foundational principles of free migration are enshrined in clauses (d) and (e) of Article 19(1) of
the Constitution, which guarantee all citizens the right to move freely throughout the territory of
India, and reside and settle in any part of the territory of India.
 Article 15 prohibits discrimination on the basis of place of birth, among other grounds, while
Article 16 guarantees equality of opportunity for all citizens in matters of public employment, and
in particular prohibits the denial of access to public employment on the grounds of place of birth
or residence.
Migration can be divided into the following types on the basis of origin and destination:
 Rural to rural R →R (Marriages, evading social stigma, economic opportunities)

 Rural to urban R →U (Daily wage earners, labourers, Marriages)
 Urban to urban U →U (Mostly transfer of jobs or in search of better economic opportunities,
Marriages)
 Urban to rural U →R (Mostly leisure oriented – Farm Houses, Retirement Houses or social work
oriented)
(Note: Migration can be temporary or permanent. Temporary migration encompasses annual, seasonal or
even daily movements of population between two cities; it is also called ‘commutation’).
Step-wise Migration:
In some cases, the population moves from villages to small towns and then to a bigger metropolitan city:
this may be termed ‘step-wise migration’.
India has been working toward ensuring the well-being of the migrants in the country.
For this purpose: A Government appointed Panel ‘Working Group on Migration’ headed by Shri Partha
Mukhopadhay (which was constituted in 2015) has recommended (the recommendation have been given
in January, 2017) necessary legal and policy framework to protect the interests of the migrants in the
country, stating that the migrant population makes substantial contribution to economic growth and their
Constitutional rights need to be secured.
Important data related to Migration in India: (as observed by the group in the
report).
Migration:
 As per Census 2011, migration in India is majorly between rural to rural areas (47.4%), followed by
urban to urban areas (22.6%), rural to urban areas (22.1%), and urban to rural areas (7.9%).
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 Between Census 2001 and 2011, rural to urban migration increased marginally from 21.8% to
22.1% and urban to urban migration increased from 15.2% to 22.6%.
Reasons for Migration:

 The share of family related migration (marriage) has increased from 28% to 36% (as share of total
migrants) between Census 2001 and 2011.
 While 87% women migrants move due to family related reasons, for men this share is 36%.
 50% of men move due to work.
 The share of work related migration decreased from 16% to 13% between Census 2001 and 2011.
 However, in terms of absolute numbers work-related migrants increased from 5.7 million to 6.9
million for rural areas and from 2.8 million to 4.8 million for urban areas.
Migrant Workforce:
 In urban areas, about 33% of the male workforce, and 56% of the female workforce is composed of
migrant workers.
 In both urban and rural areas, about 31% of all migrant workers are in the top consumption
quintile (one-fifth).
 In urban areas about 62% of all migrant workers are in the top consumption quintile.
Nature of Jobs:
 In urban areas, 33% of the male migrants work in traditional services (wholesale and retail trade,
hotels, transport), followed by 27% in manufacturing, and 16% in modern services (real estate,
education, health).
 Among female migrants in urban areas, 34% work in public services (public administration,
railways, postal services), followed by 23% in manufacturing. In rural areas, 37% of the male
migrants are employed in primary jobs (agriculture, fishing, mining), followed by 20% in traditional
jobs. Among female migrants in rural areas, 84% are employed in primary jobs.
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Share of all migrants going to other states by Social Category: (Source: Census 2001,
NSS 2007-08)
Note:
Migration in the Census of India is of two types – Migration by Birth place and Migration by place of last
residence. When a person is enumerated in Census at a place, i.e., village or town, different from her/his
place of birth, she/he would be considered a migrant by place of birth. A person would be considered a
migrant by place of last residence, if she/he had last resided at a place other than her/his place of
enumeration.
The Census also captures the reasons for migration. The following reasons for migration from place of
last residence are captured: Work/Employment, Business, Education, Marriage, Moved after birth,
Moved with household and any other.
Important recommendations of the report:
 The Group noted that certain states have introduced domicile requirements with regard to
employment. This puts migrants at a disadvantage.
 The Group recommended that states should remove such domicile requirements, and other laws
specifically looking at inter-state migration.
 It also recommended a review of the existing legislative framework and providing basic guarantees
on wage and work conditions for all workers. A comprehensive law should be brought in for the
unorganized sector workers, which could also provide social protection to such workers.
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 States are asked to include migrant children in the Annual Work Plans under Sarva Siksha Abhiyan
(SSA) to uphold their Right to Education.
 The Working Group has recommended that the Protocols of the Registrar General of India needs to
be amended to enable caste based enumeration of migrants so that they can avail the attendant
benefits in the States to which migration takes place.
 The Group noted that one of the key issues is that migrants are registered to claim legal and social
entitlements (such as PDS) at their source location. Post migration, they lose access to these
benefits at the destination.
 The Group recommended that PDS should be made portable, and expanded to extend coverage to
migrants.
 Housing: One of the key issues with regard to housing is poor supply, for both ownership and
rental. Short-term migrants do not have access to short-duration accommodation. The Group
recommended: (i) expansion of basic services (water supply, electricity) to all settlements, (ii)
provision of wide variety of rental accommodation, (iii) provision of dormitories and working
women’s hostels.
Reasons for Migration:

The important factors, therefore, which cause migration or which motivate people to move, may broadly
be classified into four categories: economic factors, demographic factors, socio-cultural factors, and
political factors.
Economic Factors:
 The major reason of voluntary migration is economic.
 In most of the developing countries, low agricultural income, agricultural unemployment and
underemployment are the major factors pushing the migrants towards areas with greater job
opportunities.
 The most important economic factors that motivate migration may be termed as ‘Push Factors’
and ‘Pull Factors’.
Push Factors
 The push factors are those that compel or force a person, due to various reasons, to leave that
place and go to some other place.
 For example, adverse economic conditions caused by poverty, low productivity, unemployment,
exhaustion of natural resources and natural calamities may compel people to leave their native
place in search of better economic opportunities.
 An ILO study reveals that the main push factor causing the worker to leave agriculture is the lower
levels of income, as income in agriculture is generally lower than the other sectors of the
economy.
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Pull Factors
 Pull factors refer to those factors which attract the migrants to an area, such as, opportunities for
better employment, higher wages, better working conditions and better amenities of life, etc.
Push Back Factors

 In India, and in some other developing countries also, another important factor which plays crucial
role in migration is ‘push back factor’.
 In India, the urban labour force is sizeable, and the urban unemployment rates are high, and there
also exist pools of underemployed persons.
 All these factors act in combination as deterrents to the fresh flow of migration from the rural to
urban areas. It is known as a ‘push back factor’.
 If new employment opportunities are created in the urban areas, the first persons to offer
themselves for employment are the marginally employed already residing in those areas, unless of
course special skills are required.
Socio-Cultural and Political Factors

 Besides these push and pull factors, social and cultural factors also play an important role in
migration.
 Sometimes family conflicts also cause migration.
 Improved communication facilities, such as, transportation, impact of the radio and the television,
the cinema, the urban-oriented education and resultant change in attitudes and values also
promote migration.
 Sometimes even political factors encourage or discourage migration.
Consequences of Migration:
 The consequences of migration are diverse. However, some of the important consequences
discussed in this unit are economic, demographic, social and psychological.
 These consequences are both positive as well as negative. Some of these affect the place of
departure while others influence the place of destination.
Economic
 Migration from a region characterized by labour surplus helps to increase the average productivity
of labour in that region, as this encourages labour-saving devices and/or greater work participation
by the remaining family workers.
 On the other hand, there is a view that migration negatively affects the emigrating region and
favours the immigrating region, and that migration would widen the development disparity
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between the regions, because of the drain of the resourceful persons from the relatively
underdeveloped region to the more developed region.
 But the exodus of the more enterprising members of a community cannot be considered a loss, if
there is lack of alternative opportunities in the rural areas. As long as migration draws upon the
surplus labour, it would help the emigrating region.
Demographic
 Migration has a direct impact on age, sex and occupational composition of the sending and
receiving regions. Migration of the unmarried males of young working age results in imbalances in
sex ratio.
 The absence of many young men from the villages increases the proportion of other groups, such
as, women, children and old people. This tends to reduce the birth rate in the rural areas.
Social and Psychological

 Urban life usually brings about certain social changes in the migrants.
 Those migrants who return occasionally or remain in direct or indirect contact with the households
of their origin are also likely to transmit some new ideas back to the areas of origin.
 A number of ex-servicemen, on retirement go back to their native areas and promote such
practices in the villages.
Census 2011 and Migration

Interesting article from the Hindu
For first time since 1921, India's urban population has gone up by more than its rural population
 At 833.1 million, India's rural population today is 90.6 million higher than it was a decade ago.
 But the urban population is 91 million higher than it was in 2001.
 The Census cites three possible causes for the urban population to have risen by more than the
rural: ‘migration,' ‘natural increase' and ‘inclusion of new areas as ‘urban.'
 But all three factors applied in earlier decades too, when additions to the rural population far
outstripped those to the urban.
 Why then is the last decade so different? While valid in themselves, these factors cannot fully
explain this huge urban increase.
 More so in a census in which the decadal growth percentage of population records “the sharpest
decline since India's independence.”
 Take the 2001 Census. It showed us that the rural population had grown by more than 113 million
since 1991. And the urban by over 68 million. So rural India had added 45 million people more
than urban.
 In 2011, urban India's increase was greater than that of rural India's by nearly half a million, a
huge change. The last time the urban increase surpassed the rural was 90 years ago, in 1921.
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Then, the rural total actually fell by close to three million compared to the 1911 Census.
 However, the 1921 Census was unique. The 1918 Influenza epidemic that killed 50-100 million
people worldwide, ravaged India.
 If Influenza left its fatal imprint on the 1921 enumeration, the story behind the numbers of the
2011 Census speaks of another tragedy: the collapse of millions of livelihoods in agriculture and
its related occupations. And the ongoing, despair-driven exodus that this sparked in the
countryside.
 The 2011 Census captures only the tip of an iceberg in terms of rural upheaval. The last time
urban India added more numbers to its population than rural India was 90 years ago and that
followed giant calamities in public health and war.
 The Census data, however, do not convey the harshness and pain of the millions trapped in
“footloose” migrations.
Footloose migration:
 It is the desperate search for work driving poorer people in many directions without a clear final
destination.
 Like Oriya migrants who work some weeks in Raipur. Then a couple of months at brick kilns in
Andhra Pradesh and then at construction sites in diverse towns in Maharashtra.
 Their hunger and the contractor, drive them to any place where there is work, however brief.
 There are rural migrations to both metros and non-metro urban areas, to towns and smaller
cities. There are also rural to rural migrations. There are urban-urban migrations. And even, in
smaller measure, urban to rural migrations.
Highlights regarding migration in the Economic Survey 2016-17:

 In the five years ended 2016, an average of nine million people migrated between states every
year for either education or work, according to Economic Survey 2016-17. That’s almost double the
inter-state migration recorded in 2001-2011 and captured by Census 2011.
 Rising labour mobility has cut across language barriers and has been more pronounced among
women, the survey found, stressing the need for more flexible social security schemes that cut
across states to sustain the trend.
 According to data cited in the survey, Delhi was the largest recipient of migrants, accounting for
more than half the number in 2015-16. People from Uttar Pradesh and Bihar accounted for almost
half the migrants in the same period.
 The survey reveals that states like Delhi, Maharashtra, Tamil Nadu, and Gujarat attracted large
numbers of migrants from the Hindi-speaking states of Uttar Pradesh, Bihar, and Madhya Pradesh.
 According to the survey, internal migration rates have dipped in Maharashtra and surged in Tamil
Nadu and Kerala, reflecting the growing pull of southern states in India’s migration dynamics.
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 Language does not seem to be a demonstrable barrier to the flow of people—a trend reflected in
the southern states attracting people from the North. Inter-state migration was almost four times
that of migration within states, reinforcing the perception that language is ceasing to be a deciding
factor in migration.
 Out-migration rate—or the rate at which people have moved out—increased in Madhya Pradesh,
Bihar and Uttar Pradesh and dipped in Assam. The survey reinforces the fact that the less affluent
states have more out-migrants and the most affluent states are the largest recipients of migrants.
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Summary Sheet
ESI- Role of economic planning
Important Points
videos and notes
Mock Test

 Economic Planning:
Economic Planning is the making of major economic decisions. What and how is to be produced and to
whom it is to be allocated – by the conscious decision of a determinate authority, on the basis of a
comprehensive survey of the economic system as a whole. The aim of all the plans is to utilize the
available resources more effectively achieving the well defined objectives during given period of time.
 How important is economic planning for India?
In an economy like India, the basic socioeconomic problems like poverty, unemployment, stagnation in
agricultural and industrial production and inequality in the distribution of income and wealth can hardly
be solved within the framework of an unplanned economy. Planning is required to remove these basic
maladies.
 Characteristic features of economic planning:
Fixation of definite socio-economic targets; Prudent efforts to achieve these targets within a given time
period; Existence of a central planning authority; Complete knowledge about the economic resources of
the country; Efficient utilization of limited resources to get maximum output and welfare.
Before going further, let us see the common types Economic Systems.
 Economic System: An economic system is the distribution of production, distribution and

consumption. It is composed of people, institutions and relationships. It addresses the problems
of economics like the allocation of resources. Types of economic systems are Capitalism (Market
Economy); Socialism (Planned Economy); Mixed Economy (Capitalism + Socialism).
Market Economy: A market economic system relies on free markets and does not allow any kind of
government involvement in the economy. In this system, the government does not control any
resources or other relevant economic segments. Instead, the entire system is regulated by the people
and the law of supply and demand. For example, if bicycles are in demand, bicycles will be produced.
Planned Economy: In a socialist society the government decides what goods are to be produced in
accordance with the needs of society. It is assumed that the government knows what is good for the
people of the country and so the desires of individual consumers are not given much importance. The
government decides how goods are to be produced and how they should be distributed. In principle,

distribution under socialism is supposed to be based on what people need and not on what they can
afford to purchase.
Mixed Economy: Most economies are mixed economies, i.e. the government and the market together
will decide what to produce, how to produce and how to distribute what is produced. In a mixed
economy, the market will provide whatever goods and services it can produce well, and the government
will provide essential goods and services which the market fails to do. India is an example of a mixed
economy.
 Types of Economic planning
Democratic Planning:
 Democratic Planning implies a system of economic order in which the authority that vests in the
state is based on the support of common masses. In democratic planning, the state does not
control all the means of production and does not regulate economic operations of the private
economy directly.
 In democratic planning, the plan is fully debated in the Parliament, state legislature and in the
private forums. The plan prepared by the planning commission is not fully accepted but it can
also be rejected or modified. Thus, the plan is not forced from the above on the people but in
fact, it is planning from below.
Totalitarian (authoritarian) planning:

 When planning is adopted under a dictator, it is called totalitarian planning.
 Under this planning, state fully controls the economic affairs, productive resources and economic
decisions. The state is the final authority in allocating the productive resources and it determines
in accordance with the directions of the central authority.
 Totalitarian planning shows the complete socialization of entire national economy. Under such
planning, plans are formulated, controlled, financed and executed by the state and people have
to do nothing in it.
Democratic planning Vs Totalitarian Planning:
 Regarding choice between democratic and totalitarian planning, some regard democratic
planning as better because it gives complete freedom to consumers and producers. But this
planning accelerates the pace of economic development slowly.

 Others regard democratic planning as imaginary since the interference by the government is
indispensable. On the other hand, under totalitarian planning, there are big sacrifices by the
public. But the pace of economic development is very fast.
Centralized planning:
 The framing, adopting, executing, supervising and controlling the plan is done by central planning
authority.
 Planning authority determines targets and priorities. It is the duty of the planning authority to
bring harmony in the planning process.
 This type of planning comes from the top to the bottom. This plan determines the equality and
cohesion. The central planning authority determines the basic policies in view of the regional and
local needs.
Decentralized Planning:
 Under this planning, responsibility lies with local and regional officials who take economic
decisions about the plan. In other words, this planning starts from the grass roots.
 In other words, this type of planning is from bottom to top. Under this, plan is framed by the
central planning authority by consulting different administrative units of the country.
 The plan incorporates plans under central, state and local schemes. Also plans are prepared for
different industries too. But individual firms are free to take their own decisions about
investment and output. Prices are determined by market mechanism even though there are
government controls. There is complete economic freedom in consumption, production and
exchange.
Centralized Vs Decentralized Planning:
Decentralized planning is superior to centralized planning. It provides economic freedom and flexibility
in the economy. Again decentralized planning provides economic freedom and incentives to the market
economy while centralized planning provides cohesiveness to the economy.
Functional planning:
 Under functional planning, there is no need to build up new structure, rather the existing
structure is corrected and modified.
 According to Zweig in his “The Planning of Free Societies’ has stated “Functional planning will
only repair, not build a new, it will improve the wave of the existing order, but not supersede it.
Thus functional planning brings no change in the economic and social set up.

Structural Planning:
 In this type of planning the present social and economic structure is changed and a new structure
emerges. In the developing countries, there is a structure planning. Big economic and social
changes are brought about to usher into a new system.
Structural Vs Functional Planning:
Indian planning is both structural and functional because under public sector, a new economic structure
is built up where as under private sector, the existing structure is modified. There is not much difference
in structural and functional planning. After sometimes structural planning turns into functional planning.
Perspective Planning:
 Perspective planning is a long run planning where targets are fixed for long periods, for example
15 to 25 years.
 But a perspective plan cannot mean one plan for the complete period. In a true sense, broader
objectives are to be achieved in a fixed period by dividing the perspective plan into short-run
plans of 4 to 6 years. The perspective plan has so many administrative difficulties due to which
the fulfillment of the objectives becomes difficult.
Annual Planning or Prospective Planning:

 Annual Planning or short term planning refers to 4 to 6 years plans which are further divided into
annual plans so that each annual plan may fit in short-run plan and each short-run plan may
ultimately fit in the long-run plan.
 Plans are further divided into regional and sectional plans. Regional plans are linked with regions,
district and localities which are further divided into sectional plans for agriculture, industry,
transport, foreign trade etc.
Indicative Planning
 Indicative plan is not imperative but flexible.
 Under indicative planning, the private sector is not rigidly controlled to achieve the targets and
priorities of the plan. The state gives full assistance to private sector but does not control it. It,
rather, directs the private sector in certain areas to implement the plan.
Imperative Planning:
 It refers to that where all economic activities and resources of the country operate under the
direction of the state. The resources are optimally used by the state in order to achieve the
targets of the plan. Consumer’s sovereignty is sacrificed under this type of planning.
 The consumers get fixed quantities at fixed prices. The government policies are rigid which
cannot be changed easily. Any change can adversely affect the economy.
Rolling Planning:
 India experienced it for the first time in April 1978 under Janata Party rule and continued up to
April 1980.
 In the rolling plan, every year, three new plans are made:
 There is a plan for the current year which includes annual budget and the foreign exchange
budget,
 There is a plan for number of years for example 3 to 5. It is changed every year keeping in view
the needs of the economy.
 A perspective plan for 10 to 20 years or more is presented where broader goals are stated. The
annual plan is fitted into same year’s new 3 to 5 years plan and both are framed in the light of
perspective plan.
 Rolling plan is framed with a view to remove rigidities. It considers the unforeseen changes like
natural calamities or economic changes. Under this financial and physical targets are revised. In
this way, the rolling plan gives the benefits of both perspective and flexible planning. But under
rolling plan, long-term subjective cannot be achieved since the targets are revised every year.
Fixed Planning:
 Fixed planning is for some fixed period, say four or five or six or seven years. A fixed plan fixes
definite objectives which have to be achieved during the plan period.
 Physical targets and financial outlays do not change except under emergencies. Under this plan,
targets are achieved which are laid down in the plan. This plan helps in maintaining proper
balance in the economy. This type of planning needs political will for its successful
implementation.
Socialistic Planning:
In socialistic planning, the economy depends on economic planning. The central authority formulates a
plan for the entire economy.
Capitalistic Planning
Capitalistic planning is focused on the unplanned economic order which gains momentum from some
invisible forces in the market. The main feature of this type of planning is the absence of a central
economic plan.

 Rationale of Planning in India
In India, comprehensive national planning is required to fulfill some broad social and economic
objectives.
 The followings are some principal reasons for planning in India:
Rapid Economic Development: Before Independence, the long period of British rule and exploitation
had made India one of the poorest nations in the world. The main task before the national government
was to undertake some positive development measures to initiate a process of development, which can
be done effectively only through the instrument of planning. The state planning mechanism has been
proved to be much superior to private market operations in bringing about it a quick transition in the
less-developed economics.
Quick Improvement in the Standard of Living: The fundamental objective of planning is to bring about
a quick improvement in the standard of living of the people. In an unplanned economy the country’s
resources and materials cannot be employed for increasing the people’s welfare as the private capitalists
in such an economy direct their activities in increasing their own profits.
Removal of Poverty: Planning in India is necessary for the early removal of abject poverty of the people.
This can be effectively done through – Planned increase in the employment opportunities of the people;
Planned production of mass consumption goods and their planned distribution among the people;
Fulfillment of minimum needs programme by providing essential facilities (e.g., housing, roads, drinking
water, public health, primary education, slum improvement, etc.).
Rational Allocation and Efficient Utilization of Resources: India is rich in natural resources, but these
resources are not fully exploited to get maximum advantages. In the unplanned economy resources tend
to be engaged in the production of these goods and services which yield maximum profits, as a result
rational allocation of resources is not possible. But such misallocation of resources can be rectified in a
planned economy in which the planning authority determines the pattern of the investment of
resources.
Increasing the Rate of Capital Formation: Planning can also raise the rate of capital formation in
countries like India. The surpluses of public enterprises as found in the planned economy can be utilized
for investment and capital formation.
Reduction in Unequal Distribution of Income and Wealth: Income and wealth are not evenly distributed
in India. In the absence of planning such inequality tends to increase due to growing concentration of

economic resources at the hands of a few capitalists. Besides, the capitalists in the unplanned society
increase their own profits by paying less to the labourers and other suppliers of raw materials. Planning
can reverse this trend through the proper guidance and control of production, distribution, consumption
and investment.
Reduction of Unemployment and Increase in Employment Opportunities: The backwardness of the

different sectors of the economy accounts for the presence of widespread unemployment, both open
and disguised, in the country. The rate of economic growth usually becomes low in the unplanned
society; as a result it becomes a difficult task to mitigate this serious problem without proper planning.
Reorganization of Foreign Trade: The foreign trade structure may be reoriented from primary producing
economy to the industrialized economy through economic planning.
Regional Balanced Development: Economic planning in India can correct the regional imbalances in
development. Proper development programs may be taken for the all-round development of backward
areas, so that all the regions are sufficiently developed.
 Economic planning in India

Economic planning in India can easily be read through dividing it into 3 parts: -
1. Economic Planning before independence
2. Economic planning after independence
3. Economic planning after 1991
 Economic planning in India before independence:

 Economic study by Dadabhai Naraoji:
The first authentic economic study of British India was published by Dadabhai Naraoji in his book
‘Poverty and the Unbritish Rule in India’. Dadabhai Naoroji's work focused on the drain of wealth from
India into England through colonial rule. Through his work with economics, Naoroji sought to prove that
Britain was draining money out of India.
 Royal commission on Indian Expenditure in 1896:
Naoroji's work on the drain theory was the main reason behind the creation of the Royal commission on
Indian Expenditure in 1896 in which he was also a member. This commission reviewed financial burdens
on India and in some cases came to the conclusion that those burdens were misplaced.

 Emergence of the idea of planned economy in India:
 First of all the idea of planned economy was crystallized in 1930s when our national leaders came
under the influence of socialist philosophy.
 In 1934, Sir M. Visvesvaraya had published a book titled “Planned Economy in India”, in which
he presented a constructive draft of the development of India in next ten years. His core idea was
to lay out a plan to shift labor from agriculture to industries and double up National income in
ten years.
 The economic perspective of India’s freedom movement was formulated during the thirties
between the 1931 Karachi session of Indian National Congress, 1936 Faizpur session of India
National Congress.
 National Planning Committee: The first attempt to develop a national plan for India came up in
1938. In that year, Congress President Subhash Chandra Bose had set up a National Planning
Committee with Jawaharlal Nehru as its president. However the reports of the committee could
not be prepared and only for the first time in 1948 -49 some papers came out.
 There are various plans that were put forward for economic development in India:
Bombay Plan: In 1944 Eight Industrialists of Bombay viz. Mr. JRD Tata, GD Birla, Purshottamdas
Thakurdas, Lala Shriram, Kasturbhai Lalbhai, AD Shroff , Ardeshir Dalal, & John Mathai working together
prepared “A Brief Memorandum Outlining a Plan of Economic Development for India”. This is known as
“Bombay Plan”. This plan envisaged doubling the per capita income in 15 years and tripling the national
income during this period. Nehru did not officially accept the plan, yet many of the ideas of the plan
were inculcated in other plans which came later.
People’s Plan: People’s plan was drafted by MN Roy. This plan was for ten years period and gave greatest
priority to Agriculture. Nationalization of all agriculture and production was the main feature of this
plan. This plan was based on Marxist socialism and drafted by M N Roy on behalf of the Indian federation
of Lahore.
Gandhian Plan: This plan was drafted by Sriman Nayaran, principal of Wardha Commercial College. It
emphasized the economic decentralization with primacy to rural development by developing the
cottage industries.
Sarvodaya Plan: Sarvodaya Plan (1950) was drafted by Jaiprakash Narayan. This plan itself was inspired
by Gandhian Plan and Sarvodaya Idea of Vinoba Bhave. This plan emphasized on agriculture and small
& cottage industries. It also suggested the freedom from foreign technology and stressed upon land
reforms and decentralized participatory planning.
 Economic Planning in India after Independence:
Planning Commission - Its origin: In March 1950, the Planning Commission was set up by a Resolution
of the Government of India as an advisory and specialized institution.
Planning Commission – Structure: Planning Commission was an extra-constitutional body, charged with
the responsibility of making assessment of all resources of the country, augmenting deficient resources,
formulating plans for the most effective and balanced utilization of resources and determining priorities.
Jawaharlal Nehru was the first Chairman of the Planning Commission. Originally most of the members
of the commission were themselves central ministers.
National Development Council (NDC): The Planning Commission as originally constituted was but an
arm of government of India. The state governments had no participation in it or had no role to play in
the planning process. To remove these defects The National Development Council (NDC) was created in
1952. The National Development Council was to consist of the Prime Minister as its chairman, the Chief
Ministers of all the states and union territories and the members of the commission. Plans were
formulated by the Planning Commission and approved the National Development Council before they
were presented to the Parliament and the state legislatures.
 Five-Year Plans-An Overview:

 The idea of Five year planning was taken from the erstwhile Soviet Union under socialist influence
of first Prime Minister Jawaharlal Nehru.
 The first Five-year Plan was launched in 1951 and two subsequent five-year plans were
formulated till 1965, when there was a break because of the Indo-Pakistan Conflict.
 Two successive years of drought, devaluation of the currency, a general rise in prices and erosion
of resources disrupted the planning process and after three Annual Plans between 1966 and
1969, the fourth Five-year plan was started in 1969.
 The Eighth Plan could not take off in 1990 due to the fast changing political situation at the Centre
and the years 1990-91 and 1991-92 were treated as Annual Plans.
 The Eighth Plan was finally launched in 1992 after the initiation of structural adjustment policies.
 For the first eight Plans the emphasis was on a growing public sector with massive investments
in basic and heavy industries, but since the launch of the Ninth Plan in 1997, the emphasis on the
public sector has become less pronounced and the current thinking on planning in the country,
in general, is that it should increasingly be of an indicative nature.

Features of each of the following plans are as follows:

 What are the achievements of Planning Commission of India?
The average growth rate during the planning period has been little more than 4% per annum. Thus, the
growth in the per capita income has been just around 2%. Plan wise, there has been mixed experience
of success and failure.
Some Modernization: This is evident from a variety of changes in the structural and the institutional set-
up of the economy. In respect of the structural changes, the noteworthy developments are: steady
change in the composition of national income with a higher share of national income originating in the
manufacturing sector; and a considerable diversification of products with many new industries coming
into the picture.
Some Success at Self-reliance: Self-reliance implies that nation must have economic security, food
security, energy security, environmental security and political and social security. During the last six
decades considerable progress has been made towards the achievement of this goal.
Little Rendering of Social Justice: The number of the poor below the poverty line has no doubt declined
but the magnitude of poverty continues to be large. According to Planning Commission estimates,
poverty ratio declined from 36 per cent in 1993-94 to 27.5 per cent in 2004-05.

In regard to the employment, there has again been some improvement. But the total situation has not
changed much with rampant underemployment and seasonal unemployment, particularly in the rural
areas.
 Economic Planning in India since 1991:

The process of economic reforms was started by the government of India in 1991 for taking the country
out of economic difficulty and speeding up the development of the country. It consists of LPG i.e.
Liberalization, Privatization and Globalization.
Liberalization: Liberalization means to unshackle the economy from bureaucratic cobweb to make it
more competitive.
Following are its chief features: To do away with the necessity of having a license for most of the
industries; Freedom in determining the scale of business activities; Removing restrictions for the
movement of goods and services from one place to another; Freedom to fix the prices of goods and
services; Reduction in the rate of taxes; Freedom from unnecessary control over economy; Simplifying
import-export procedure; Simplifying the process of attracting foreign capital and technology.
Privatization: In brief, privatization means such an economic process through which some public sector
undertaking is brought either partially or completely under private ownership. Broadly speaking,
establishing a new enterprise in private sector instead of public sector is also privatization. Not only this,
depriving public sector of the job of production which was earlier reserved for it or transferring its
production, without depriving it, to the private sector also amounts to privatization.
Globalization: Globalization means integrating the economy with the rest of the world. Following are its
chief features: Free flow of goods and services in all the countries; Free flow of capital in all the countries;
Free flow of information and technology in all the countries; Free movement of people in all the
countries; The same conflict-solving technique in all the countries.
 NITI Aayog:
The National Institution for Transforming India, also called NITI Aayog, was formed via a resolution of
the Union Cabinet on January 1, 2015. NITI Aayog is the premier policy ‘Think Tank’ of the Government
of India, providing both directional and policy inputs. While designing strategic and long term policies
and programmes for the Government of India, NITI Aayog also provides relevant technical advice to the
Centre and States.

The Government of India, in keeping with its reform agenda, constituted the NITI Aayog to replace the
Planning Commission instituted in 1950.
At the core of NITI Aayog’s creation are two hubs – Team India Hub and the Knowledge and Innovation
Hub. The Team India Hub leads the engagement of states with the Central government, while the
Knowledge and Innovation Hub builds NITI’s think-tank capabilities. These hubs reflect the two key tasks
of the Aayog.
 The NITI Aayog will comprise the following:

 Prime Minister of India as the Chairperson
 Governing Council comprising the Chief Ministers of all the States and Lt. Governors of Union
Territories
 Regional Councils will be formed to address specific issues and contingencies impacting more
than one state or a region. These will be formed for a specified tenure. The Regional Councils
will be convened by the Prime Minister and will comprise of the Chief Ministers of States and Lt.
Governors of Union Territories in the region. These will be chaired by the Chairperson of the NITI
Aayog or his nominee.
 Experts, specialists and practitioners with relevant domain knowledge as special invitees
nominated by the Prime Minister.
 The full-time organizational framework will comprise of, in addition to the Prime Minister as the
Chairperson:
 Vice-Chairperson: To be appointed by the Prime Minister
 Members: Full-time
 Part-time members: Maximum of 2 from leading universities research organizations and other
relevant institutions in an ex-officio capacity. Part time members will be on a rotational basis.
 Ex Officio members: Maximum of 4 members of the Union Council of Ministers to be nominated
by the Prime Minister.
 Chief Executive Officer: To be appointed by the Prime Minister for a fixed tenure, in the rank of
Secretary to the Government of India.
 Secretariat as deemed necessary.
 How is NITI Aayog different from the Planning Commission?

Planning Commission was an advisory body, and so is Niti Ayog. But the key difference between them is
that while the former had powers to allocate funds to ministries and states; this function will be now of
finance ministry. Niti Ayog is essentially a think tank and a truly advisory body.
 How does NITI Aayog promote co-operative federalism?
NITI Aayog acts to allow states to deepen their policy engagement with the Central Government. For
this purpose, NITI’s Governing council includes Chief Ministers of all States and Lieutenant Governors/
Administrators of Union Territories. Taking the involvement of States in the country’s policy decisions a
step further, it also constituted Sub-Groups of Chief Ministers to settle complex issues.
In its very first year, NITI Aayog hosted three sub-groups of Chief Ministers on three crucial policy issues
– Swachh Bharat, Skill Development and Centrally-Sponsored Schemes.
 Future Targets by NITI Aayog:
NITI Aayog has laid out a roadmap to help Asia’s third largest economy cross the $10 trillion mark by
2032. The policy agency said that India can become a $10 trillion economy by 2032 if it increases its
growth rate from 7% to 10% annually, starting this year. The agency said such a growth rate could
eradicate poverty and generate over 175 million new jobs. The flip side: If it doesn’t improve its growth
rate from 7%, India will still have about 6% of its population living below poverty line in 2032.
Currently, about 12.9% of the Indian population, or 172 million people, live below the poverty line. The
current rate of growth would reduce poverty, but since India’s population is expected to grow to over
1.4 billion by 2030, it would not eradicate it.
 Plans put forth by NITI Aayog:

India’s 12th Five-Year Plan, the last one, ended on 31st March, 2017. NITI Aayog has put forth three
types of plans for the economic development of India.

The 15-year vision document has a seven-year strategy document for 2017-24 as the 'National
Development Agenda.' Separately, a three-year 'Action Agenda' from 2017-18 to 2019-20 is also under
works to assess funding requirements. The three-year agenda is further divided into seven parts, with a
number of specific action points for each part to boost economic growth.
Worksheet

2. True /False
3. MCQs
4. Match the column
Happy Learning!!!

Summary Sheet
ESI- Balance of Payment (BOP)
Important Points
videos and notes
Mock Test

 Balance of Payments (BoP) - What is it? The balance of payments is a systematic record of all
economic transactions of residents of a country with the rest of the world during a given period
of time.
 Why do we need to have this record? The main purpose of keeping these records is to know the
international economic position of a country which helps the Government in making decisions
on monetary and fiscal policies on the one hand, and trade and payments policies on the other.
 Components of India’s BOP Account:
Balance of payment (BoP) comprises of current account, capital account, errors and omissions and
changes in foreign exchange reserves.
 Current Account of BoP:
Under current account of the BoP, transactions are classified into merchandise (exports and imports)
and invisibles.
Merchandise Transactions or Visible Trade:

A major part of transactions in foreign trade is in the form of export and import of goods (visible items).
The money earned from Indian exports of goods (e.g., cars sold to Nepal) is credited (added) to this
account, whilst payments for imported goods (e.g., American aircraft sold in India) are debited.
 Balance of Trade: The difference between exports of goods and imports of goods is known as
the Balance of Trade.
 If, export of goods (in terms of value) > import of goods (In terms of value), then we have a
Trade Surplus.
 If, export of goods (in terms of value) < import of goods (In terms of value), then we have a
Trade Deficit.
Invisible Trade: Invisible transactions are further classified into three categories, namely Services,
Income and Transfers.
Let us see them one by one in detail:
Services: It includes a large variety of non-factor services (known as invisible items) sold and purchased
by the residents of a country, to and from the rest of the world. Payments are either received or made
to the other countries for use of these services.
For example: The income earned from the sale of Indian services abroad is known as an invisible export,
e.g., an insurance premium paid by a British ship-owner to an Indian broker. When Indian residents
spend money on foreign services, e.g., a week’s accommodation in London, they are creating invisible
imports, because payment is going out of India.
Income: It includes Profits and Dividends earned by residents of India on their investments abroad and
vice versa. It also includes interest payments i.e. servicing of debt liabilities.
Transfers: These are unilateral transfers which include gifts, donations, personal remittances and other
‘one-way’ transactions. These refer to those receipts and payments, which take place without any
service in return.
Balance on current account: In the current account, receipts from export of goods, services and
unilateral receipts are entered as credit or positive items and payments for import of goods, services
and unilateral payments are entered as debit or negative items. The net value of credit and debit
balances is the balance on current account.
 A current account deficit means the value of imports of goods/services / investment incomes /
transfers is greater than the value of exports. It indicates net outflow of foreign exchange.
 A current account surplus means the value of imports of goods/services / investment incomes /
transfers is less than the value of exports. It indicates net inflow of foreign exchange.
Note: A deficit on the current account is a warning that the nation is spending more than it is earning,
in the short run.
 Difference between Balance of Trade and Current Account:
Basis Balance of Trade (BOT) Current Account

Components Balance of trade includes only visible Current Account records both visible and
items. invisible items.
Scope It is a narrow concept as it is only a part It is a wider concept and it includes BOT.
of current account
 India’s position in relation to the Current Account:
Note: India has a Current Account Deficit.
The below data represents the details of India’s balance of payments (BoP) for the fourth quarter (Q4)
i.e., January-March 2016-17. (The data keeps changing and students are advised to keep a tab on the
latest data) (Source: RBI)
 India’s current account deficit (CAD) at US$ 3.4 billion (0.6 per cent of GDP) in Q4 of 2016-17 was
higher than US$ 0.3 billion (0.1 per cent of GDP) in Q4 of 2015-16 but narrowed from US$ 8.0
billion (1.4 per cent of GDP) in the preceding quarter.
 The widening of the CAD on a year-on-year (y-o-y) basis was primarily on account of a higher
trade deficit (US$ 29.7 billion) brought about by a larger increase in merchandise imports relative
to exports.
 Net services receipts increased on a y-o-y basis on the back of a rise in net earnings from travel,
transport, construction and other business services. Thus the services surplus widened to USD
17.6 billion from USD 16.1 billion.
 Private transfer receipts, mainly representing remittances by Indians employed overseas, at US$
15.7 billion remained almost at the same level as in the preceding year.
 In the previous quarter, the current account deficit was higher at USD 7.9 billion.
 Current Account in India averaged -1791.84 USD Million from 1949 until 2017, reaching an all
time high of 7360 USD Million in the first quarter of 2004 and a record low of -31857.18 USD
Million in the fourth quarter of 2012.
 Capital Account of BoP: Capital account of BOP records all those transactions, between the
residents of a country and the rest of the world, which cause a change in the assets or liabilities
of the residents of the country or its government. It is related to claims and liabilities of financial
nature. Capital account is concerned with financial transfers. So, it does not have direct effect on
income, output and employment of the country.
The main components of the capital account include foreign investment, loans and banking capital.
Debt-creating and non-debt creating capital inflows: Capital inflows in the capital account can be
classified into debt creating and non-debt creating. Foreign investment (both direct and portfolio)
represents non-debt creating capital inflows, whereas external assistance (i.e. concessional loans taken

from abroad), external commercial borrowing (ECB) and non-resident deposits are debt-creating capital
inflows.
Foreign Investments:
 Foreign investment, comprising Foreign Direct Investment (FDI) and Portfolio Investment
consisting of Foreign Institutional Investors (FIIs) investment, American Depository
Receipts/Global Depository Receipts (ADRs/GDRs) represents non-debt liabilities.
 FDI and FII: Both are the forms of investment made in a foreign country. FDI is made to acquire
controlling ownership in an enterprise but FII tends to invest in the foreign financial market. In
most cases, the former is given preference over the latter because it benefits the whole economy.
 In June 2014, Government of India had accepted the recommendations Mayaram Committee
thereby accepting the definitions of FII and FDI. The panel headed by Finance Secretary was set
up to rationalize the definitions of FDI and FII.
Key points from Mayaram Committee Report:
Foreign investment of 10 percent or more through eligible instruments made in an Indian listed company
would be treated as FDI. All existing foreign investments below the threshold limit made under the FDI
Route shall however, continue to be treated as FDI. Foreign Investment in an unlisted company
irrespective of threshold limit may be treated as FDI. The Committee has recommended the merger of
the FII and Qualified Foreign Investors (QFI) regimes under the new “Foreign Portfolio Investors” (FPI)
regime.
Loans: Loans include external assistance, external commercial borrowings and trade credit.
Banking Capital:Banking capital, including non-resident Indian (NRI) deposits are debt liabilities.
Balance on Capital Account: The transactions, which lead to inflow of foreign exchange (like receipt of
loan from abroad, sale of assets or shares in foreign countries, etc.), are recorded on the credit or
positive side of capital account. Similarly, transactions, which lead to outflow of foreign exchange (like
repayment of loans, purchase of assets or shares in foreign countries, etc.), are recorded on the debit
or negative side. The net value of credit and debit balances is the balance on capital account.
 Surplus in capital account arises when credit items are more than debit items. It indicates net inflow
of capital.
 Deficit in capital account arises when debit items are more than credit items. It indicates net outflow
of capital.
 India’s position in relation to the Capital Account: Note: India has a surplus on the Capital
Account.
 In the financial account, net foreign direct investment at US$ 5.0 billion in Q4 of 2016-17
moderated from its level a year ago.
 Net portfolio investment, however, recorded substantial inflow of US$ 10.8 billion in Q4 of 2016-
17 in both equity and debt segment, as against net outflow of US$ 1.5 billion in Q4 last year.
 Net receipts on account of non-resident deposits amounted to US$ 2.7 billion in Q4 of 2016-17,
lower than US$ 4.4 billion a year ago.
In Q4 of 2016-17, there was an accretion of foreign exchange reserves (on BoP basis) to the tune of
US$ 7.3 billion as compared with an increase of US$ 3.3 billion in Q4 of last year.
1.1.1.1 Balance on Current Account Vs. Balance on Capital Account:

Balance on current account and balance on capital account are interrelated.
 A deficit in the current account must be settled by a surplus on the capital account.
 A surplus in the current account must be matched by a deficit on the capital account.
 Foreign Exchange Reserves: The foreign currency held in a country is also taken into account
while maintaining the balance of payments accounts. The components of India’s Foreign
Exchange Reserves include: Foreign exchange (Foreign Currency Assets), Gold, Special Drawing
Rights (SDR) and Reserve Tranche Position in the IMF.
Exchange Rate:
 Exchange rate is the price of one currency in terms of another currency.
 The exchange rate is used when simply converting one currency to another (such as for the
purposes of travel to another country), or for engaging in speculation or trading in the foreign
exchange market.
 Exchange rates can be either fixed or floating. Fixed exchange rates are decided by central
banks of a country whereas floating exchange rates are decided by the mechanism of market
demand and supply.
 In a floating rate regime, an increase in the value of the domestic currency against other
currencies is called an appreciation, while a decrease in value is called depreciation.

 In contrast, an increase in the exchange rate in a fixed rate regime is called a revaluation (for
an increase) and a decrease in the exchange value of the domestic currency is referred to as
devaluation.
 In India, RBI follows a managed floating exchange rate system. Here, the RBI interferes to
manage volatility in floating exchange regime. To stop depreciation of rupee, RBI should sell
dollars from its forex reserve and to stop appreciation of rupee, RBI should purchase dollars
from the market.
 Nominal exchange rate is the price of one currency in terms of number of units of some other
currency.
 It is ‘nominal’ because it measures only the numerical exchange value, and does not say
anything about other aspects such as the purchasing power of that currency.
 To incorporate the purchasing power and competitiveness aspect and, therefore, make the
measure more meaningful, real exchange rates are used.
 The real exchange rates are nothing but the nominal exchange rates multiplied by the price
indices of the two countries.
 NEER and REER: NEER is the Nominal Effective Exchange Rate, and REER is the Real Effective
Exchange Rate.
 Unlike nominal and real exchange rates, NEER and REER are not determined for each foreign
currency separately. Rather, each is a single number (usually expressed as an index) that
expresses what is happening to the value of the domestic currency against a whole basket of
currencies.
Current Update: August, 2017: Foreign Exchange Reserves in India increased to 398120 USD Million in
September 1 from 394550 USD Million in the previous week. Foreign Exchange Reserves in India
averaged 206149.58 USD Million from 1998 until 2017, reaching an all time high of 398120 USD Million
in September of 2017 and a record low of 29048 USD Million in September of 1998.
 Errors and Omissions: Since BOP always balances in theory, all debits must be offset by all credits
and vice versa. In practice, rarely it happens particularly because statistics are incomplete as well
as imperfect. That is why errors and omissions are considered so that BOP accounts are kept in
balance.

The Balance of Payments can be summarized as:
Current account balance + Capital account balance + Reserve balance = Balance of Payments
BoP Deficit or Surplus:
 The decrease (increase) in official reserves is called the overall balance of payments deficit
(surplus).
 The balance of payments deficit or surplus is obtained after adding the current and capital
account balances.
 The balance of payments surplus will be considered as an addition to official reserves (reserve
use).
 Rupee Convertibility: Indian rupee is fully convertible only in the current account and not in the
capital account. This means one can import and export goods or receive or make payments for
services rendered. However, investments and borrowings are restricted.
Current Account Convertibility: Current account convertibility allows free inflows and outflows for all
purposes other than for capital purposes such as investments and loans. In other words, it allows
residents to make and receive trade-related payments -- receive dollars (or any other foreign currency)
for export of goods and services and pay dollars for import of goods and services, make sundry
remittances, access foreign currency for travel, studies abroad, medical treatment and gifts, etc. Though
Current account in India is fully convertible but still some restrictions from FEMA (Foreign Exchange
Management Act) viz.
Liberalized remittance scheme (2004): Indian residents may spend $2.5 lakh dollars per year per person
abroad apart from FEMA limit.

Capital Account Convertibility: It means the freedom to convert local financial assets into foreign
financial assets and vice versa at market determined rates of exchange. This implies that Capital Account
Convertibility allows anyone to freely move from local currency into foreign currency and back. It refers
to the removal of restraints on international flows on a country’s capital account, enabling full currency
convertibility and the opening of the financial system.
Restrictions under FEMA for Capital Account Convertibility:
 The Committee on Capital Account Convertibility (CAC) or Tarapore Committee :
It was constituted by the Reserve Bank of India for suggesting a roadmap on full convertibility of Rupee
on Capital Account. The committee submitted its report in May 1997.
The Tarapore committee observed that the Capital controls can be useful in insulating the economy of
the country from the volatile capital flows during the transitional periods and also in providing time to
the authorities, so that they can pursue discretionary domestic policies to strengthen the initial
conditions. The CAC Committee recommended the implementation of Capital Account Convertibility for
a 3 year period viz. 1997-98, 1998-99 and 1999-2000.
The above committee’s report was not translated into any actions. India is still a country with partial
convertibility.
The Second Tarapore Committee recommendations (2006):
Reserve Bank of India appointed the second Tarapore committee to set out the framework for fuller
Capital Account Convertibility. The report of this committee was made public by RBI on 1st September
2006. In this report, the committee suggested 3 phases of adopting the full convertibility of rupee in
capital account. First Phase in 2006-07; Second phase in 2007-09; Third Phase by 2011.
Following were some important recommendations of this committee:
 The ceiling for External Commercial Borrowings (ECB) should be raised for automatic approval.

 NRI should be allowed to invest in capital markets NRI deposits should be given tax benefits.
 FII (Foreign Institutional Investors) should be prohibited from investing fresh money raised to
participatory notes.
 Existing PN (Participatory notes) holders should be given an exit route to phase out completely
the PN notes. At present the rupee is fully convertible on the current account, but only partially
convertible on the capital account.
Tarapore Committee mentioned the following benefits of capital account convertibility to India:
1. Availability of large funds to supplement domestic resources and thereby promote economic growth.
2. Improved access to international financial markets and reduction in cost of capital.
3. Incentive for Indians to acquire and hold international securities and assets, and
4. Improvement of the financial system in the context of global competition.
 BoP Crisis: Countries with current account deficits can run into difficulties. If the deficit is large
and the economy is not able to attract enough inflows of foreign investment, then their currency
reserves will dwindle. There may come a point when the country needs to seek emergency
borrowing from institutions such as the International Monetary Fund that may lead to external
debt. Countries with deficits in their current accounts will build up increasing debt and/or see
increased foreign ownership of their assets. BoP crisis is also known as the currency crisis. India
also faced BoP crisis in 1990-91.
Origin of the Crisis:
 It all began in the year 1985 and India had started having a balance of payment problems and
towards the end of the year 1990, it was in a serious economic crisis.
 The government was nearing to the line of the default and the country’s central bank was
refusing to give any credit or loan and foreign exchange reserves had been reduced to such a
point that India could barely finance itself for even 20 days and the worth of imports which led
the Indian government to basically take away the national gold reserves as a pledge to the
International monetary fund (IMF) to get a loan or credit in order to overcome this balance of
payment crisis they had been suffering trough from the year 1985.
 And now the Indian economy would have failed a big time if they did not do this.
What factors led to the culmination of this crisis?

 The BOP crisis hit the country in the year 1990-1 but the journey of the crisis had been building
for at least a half a decade, preceeding the year of 1991.
 The rising of the fiscal deficit and gradually increasing overvaluation has all resulted and
contributed to the rising imbalance in the balance of payment of the country.
 Improper exchange rate adjustment with respect to the external and domestic shocks during
1990-91 was an add-on to the crisis.
Economic Reforms 1991
 India approached the International Bank for Reconstruction and Development (IBRD), popularly
known as World Bank and the International Monetary Fund (IMF) and received $7 billion as loan
to manage the crisis.
 For availing the loan, these international agencies expected India to liberalize and open up the
economy by removing restrictions on the private sector, reduce the role of the government in
many areas and remove trade restrictions between India and other countries.
 India agreed to the conditionalities of World Bank and IMF and announced the New Economic
Policy (NEP).
 The NEP consisted of wide ranging economic reforms. The thrust of the policies was towards
creating a more competitive environment in the economy and removing the barriers to entry and
growth of firms.
 This set of policies can broadly be classified into two groups: the Stabilization measures and the
structural reform measures.
 Stabilization measures are short-term measures, intended to correct some of the weaknesses
that have developed in the balance of payments and to bring inflation under control.
 In simple words, this means that there was a need to maintain sufficient foreign exchange
reserves and keep the rising prices under control.
 On the other hand, structural reform policies are long-term measures, aimed at improving the
efficiency of the economy and increasing its international competitiveness by removing the
rigidities in various segments of the Indian economy.
 The government initiated a variety of policies which fall under three heads viz., liberalization,
privatization and globalization.
Note: The short-term and long-term measures are discussed in detail in the Privatization and Opening
up of the Indian Economy Chapter.

Worksheet

2. True /False
3. MCQs
4. Match the column
Happy Learning!!!

ECONOMICS AND SOCIAL ISSUES (ESI)
TOPIC
WORLD TRADE ORGANIZATION (WTO)
Contents
1 Background: The origin of WTO: ............................................................................................................................... 3
1.1 How was the system developed? ..................................................................................................................... 3
2 Objectives and Functions of WTO:............................................................................................................................ 4
3 Structure of WTO: ..................................................................................................................................................... 4
3.1 Members: .......................................................................................................................................................... 4
3.2 How are the decisions taken? ........................................................................................................................... 4
3.3 Decision-making body of WTO: ........................................................................................................................ 4
3.4 Director-General of WTO: ................................................................................................................................. 5
3.5 Secretariat: ........................................................................................................................................................ 5
4 Various Ministerial Conferences of WTO:................................................................................................................. 6
5 WTO Agreements: ..................................................................................................................................................... 6
5.1 Goods: ............................................................................................................................................................... 7
5.2 Services: ............................................................................................................................................................ 7
5.3 Intellectual property ......................................................................................................................................... 7
5.4 Dispute Settlement: .......................................................................................................................................... 7
5.5 Policy Review: ................................................................................................................................................... 8
6 Principles of the Trading system: .............................................................................................................................. 8
6.1 Most-favoured-nation (MFN): treating other people equally: ......................................................................... 8
6.2 National Treatment: Treating locals and foreigners equally: ........................................................................... 9
6.3 Freer trade: Gradually through negotiation ..................................................................................................... 9
6.4 Predictability: through binding and transparency: ........................................................................................... 9
6.5 Promising fair competition: ............................................................................................................................ 10
6.6 Encouraging Development and Economic Reform: ........................................................................................ 10
7 What was discussed in the latest (10th Ministerial Conference of WTO) at Nairobi, Kenya in 2015? .................... 11
7.1 What is Doha Development Agenda? ............................................................................................................. 11
8 Agreement on Agriculture (AoA): ........................................................................................................................... 12
9 Nairobi Package: ..................................................................................................................................................... 16
10 Summary Sheets ................................................................................................................................................. 17
1 Background: The origin of WTO:
 The World Trade Organization (WTO) came into being in 1995.
 One of the youngest of the international organizations, the WTO is the successor to the
General Agreement on Tariffs and Trade (GATT) established in the wake of the Second
World War.
GATT
 The General Agreement on Tariffs and Trade was the first worldwide multilateral free trade
agreement.
 It was in effect from June 30, 1948 until January 1, 1995.
 It ended when it was replaced by the more robust World Trade Organization.
 So while the WTO is still young, the multilateral trading system that was originally set up
under GATT is well over 60 years old.
 The past 60 years have seen an exceptional growth in world trade. Merchandise exports
grew on average by 6% annually. Total trade in 2000 was 22-times the level of 1950. GATT
and the WTO have helped to create a strong and prosperous trading system contributing to
unprecedented growth.
1.1 How was the system developed?

 The system was developed through a series of trade negotiations, or rounds, held under
GATT.
 The GATT completed 8 rounds of multilateral trade negotiations (MTNs).
 The first rounds dealt mainly with tariff reductions, but later negotiations included other
areas such as anti-dumping and non-tariff measures.
 The last round — the 1986-94 Uruguay Round — led to the WTO’s creation.
 The negotiations did not end there. Some continued after the end of the Uruguay Round.
 In February 1997 agreement was reached on telecommunications services, with 69
governments agreeing to wide-ranging liberalization measures that went beyond those
agreed in the Uruguay Round.
 In the same year 40 governments successfully concluded negotiations for tariff-free trade in
information technology products, and 70 members concluded a financial services deal
covering more than 95% of trade in banking, insurance, securities and financial information.
 In 2000, new talks started on agriculture and services. These have now been incorporated
into a broader agenda launched at the fourth WTO Ministerial Conference in Doha, Qatar, in
November 2001 (once in every two years, the Ministerial Conference of the WTO takes
place).
 The work programme, the Doha Development Agenda (DDA), adds negotiations and other
work on non-agricultural tariffs, trade and environment, WTO rules such as anti-dumping
and subsidies, investment, competition policy, trade facilitation, transparency in
government procurement, intellectual property, and a range of issues raised by developing
countries as difficulties they face in implementing the present WTO agreements.
2 Objectives and Functions of WTO:
The important objectives of WTO are:
 To improve the standard of living of people in the member countries.

 To ensure full employment and broad increase in effective demand.
 To enlarge production and trade of goods.
 To increase the trade of services.
 To ensure optimum utilization of world resources.
 To protect the environment.
 To accept the concept of sustainable development.
The main functions of WTO are:
 To implement rules and provisions related to trade policy review mechanism.

 To provide a platform to member countries to decide future strategies related to trade and
tariff.
 To provide facilities for implementation, administration and operation of multilateral and
bilateral agreements of the world trade.
 To administer the rules and processes related to dispute settlement.
 To ensure the optimum use of world resources.
 To assist international organizations such as, IMF and IBRD for establishing coherence in
Universal Economic Policy determination.
3 Structure of WTO:
3.1 Members:
The WTO has about 160 members, accounting for about 95% of world trade. Around 25 others are
negotiating membership.
Latest members:
 Afghanistan became the 164th member of the Organization on 29 July,2016
 Liberia became the 163rd WTO member on 14 July 2016
 Kazakhstan became the 162nd WTO member on 30 November 2015
 Seychelles became the 161st WTO member on 26 April 2015
3.2 How are the decisions taken?

 Decisions are made by the entire membership. This is typically by consensus.
 A majority vote is also possible, but it has never been used in the WTO, and was extremely
rare under the WTO’s predecessor, GATT.
 The WTO’s agreements have been ratified in all members’ parliaments.
3.3 Decision-making body of WTO:

 The WTO’s top level decision-making body is the Ministerial Conference which meets at
least once every two years.
 Below this is the General Council (normally ambassadors and heads of delegation in
Geneva, but sometimes officials sent from members’ capitals) which meets several times a
year in the Geneva headquarters. The General Council also meets as the Trade Policy
Review Body and the Dispute Settlement Body.
 At the next level, the Goods Council, Services Council and Intellectual Property (TRIPS)
Council report to the General Council.
 Numerous specialized committees, working groups and working parties deal with the
individual agreements and other areas such as the environment, development, membership
applications and regional trade agreements.
3.4 Director-General of WTO:

 Roberto Azevêdo is the sixth Director-General of the WTO.
 His appointment took effect on 1 September 2013 for a four-year term.
 At a meeting of the General Council on 28 February 2017, WTO members agreed by
consensus to appoint Roberto Azevêdo as Director-General for a second four-year term,
starting on 1 September 2017.
3.5 Secretariat:
 The WTO Secretariat, based in Geneva, has around 640 staff and is headed by a director-
general. Its annual budget is roughly 197 million Swiss francs.
 It does not have branch offices outside Geneva. Since decisions are taken by the members
themselves, the Secretariat does not have the decision-making role that other inter
secretariat, Geneva national bureaucracies are given.
The Secretariat’s main duties are:
 To supply technical support for the various councils and committees and the ministerial
conferences;
 To provide technical assistance for developing countries,
 To analyze world trade and
 To explain WTO affairs to the public and media.
 It also provides some forms of legal assistance in the dispute settlement process and advises
governments wishing to become members of the WTO.
4 Various Ministerial Conferences of WTO:
5 WTO Agreements:
 The WTO agreements cover goods, services and intellectual property.
 They spell out the principles of liberalization, and the permitted exceptions.
 They include individual countries’ commitments to lower customs tariffs and other trade
barriers, and to open and keep open services markets.
 They set procedures for settling disputes.
 They prescribe special treatment for developing countries.
 They require governments to make their trade policies transparent by notifying the WTO
about laws in force and measures adopted, and through regular reports by the secretariat
on countries’ trade policies.
 These agreements are often called the WTO’s trade rules, and the WTO is often described
as “rules-based”, a system based on rules. But it’s important to remember that the rules are
actually agreements that governments negotiated.
 The basis of the present WTO system is Uruguay Round agreements (which was the 8 th-last
round of GATT).
 In fact, the agreements fall into a simple structure with six main parts: an umbrella
agreement (the Agreement Establishing the WTO); agreements for each of the three broad
areas of trade that the WTO covers (goods, services and intellectual property); dispute
settlement; and reviews of governments’ trade policies.
Let us study each one in detail:

5.1 Goods:
 It all began with trade in goods. From 1947 to 1994, GATT was the forum for negotiating
lower customs duty rates and other trade barriers; the text of the General Agreement spelt
out important rules, particularly non-discrimination.
 Since 1995, the updated GATT has become the WTO’s umbrella agreement for trade in
goods.
 It has annexes dealing with specific sectors such as agriculture and textiles, and with specific
issues such as state trading, product standards, subsidies and actions taken against
dumping.
5.2 Services:
 Banks, insurance firms, telecommunications companies, tour operators, hotel chains and
transport companies looking to do business abroad can now enjoy the same principles of
freer and fairer trade that originally only applied to trade in goods.
 These principles appear in the new General Agreement on Trade in Services (GATS).
 WTO members have also made individual commitments under GATS stating which of their
services sectors they are willing to open to foreign competition, and how open those
markets are.
5.3 Intellectual property

 The WTO’s intellectual property agreement amounts to rules for trade and investment in
ideas and creativity.
 The rules state how copyrights, patents, trademarks, geographical names used to identify
products, industrial designs, integrated circuit layout-designs and undisclosed information
such as trade secrets — “intellectual property” — should be protected when trade is
involved.
 The basic principles related to the Intellectual Property agreements are mentioned in
“The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS)”.
TRIPS:
 The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) is
an international legal agreement between all the member nations of the World Trade
Organization (WTO).
 It sets down minimum standards for the regulation by national governments of many
forms of intellectual property (IP) as applied to nationals of other WTO member nations.
 TRIPS was negotiated at the end of the Uruguay Round of the General Agreement on
Tariffs and Trade (GATT) in 1994 and is administered by the WTO.
5.4 Dispute Settlement:

 The WTO’s procedure for resolving trade quarrels under the Dispute Settlement
Understanding is vital for enforcing the rules and therefore for ensuring that trade flows
smoothly.
 Countries bring disputes to the WTO if they think their rights under the agreements are
being infringed.
 Judgements by specially-appointed independent experts are based on interpretations of the
agreements and individual countries’ commitments.
 The system encourages countries to settle their differences through consultation. Failing
that, they can follow a carefully mapped out, stage-by-stage procedure that includes the
possibility of a ruling by a panel of experts, and the chance to appeal the ruling on legal
grounds.
 Confidence in the system is borne out by the number of cases brought to the WTO —
around 300 cases in eight years compared to the 300 disputes dealt with during the entire
life of GATT (1947–94).
5.5 Policy Review:

 The Trade Policy Review Mechanism’s purpose is to improve transparency, to create a
greater understanding of the policies that countries are adopting, and to assess their
impact.
 Many members also see the reviews as constructive feedback on their policies.
 All WTO members must undergo periodic scrutiny, each review containing reports by the
country concerned and the WTO Secretariat.
6 Principles of the Trading system:

 The WTO agreements are lengthy and complex because they are legal texts covering a wide
range of activities.
 They deal with: agriculture, textiles and clothing, banking, telecommunications, government
purchases, industrial standards and product safety, food sanitation regulations, intellectual
property, and much more.
 But a number of simple, fundamental principles run throughout all of these documents.
 These principles are the foundation of the multilateral trading system.
In the following section, we will have a closer look at these principles:
6.1 Most-favoured-nation (MFN): treating other people equally:

 Under the WTO agreements, countries cannot normally discriminate between their trading
partners.
 If a country grants someone a special favor (such as a lower customs duty rate for one of
their products) then it must do the same for all other WTO members.
 This principle is known as most-favoured-nation (MFN) treatment.
 It is so important that it is the first article of the General Agreement on Tariffs and Trade
(GATT), which governs trade in goods.
 MFN is also a priority in the General Agreement on Trade in Services (GATS) (Article 2) and
the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) (Article 4),
although in each agreement the principle is handled slightly differently.
 Together, those three agreements cover all three main areas of trade handled by the WTO.
Exceptions:
 Some exceptions are allowed.

 For example, countries can set up a free trade agreement that applies only to goods traded
within the group — discriminating against goods from outside.
 Or they can give developing countries special access to their markets.
 Or a country can raise barriers against products that are considered to be traded unfairly
from specific countries.
 And in services, countries are allowed, in limited circumstances, to discriminate.
 But the agreements only permit these exceptions under strict conditions.
In general, MFN means that every time a country lowers a trade barrier or opens up a
market, it has to do so for the same goods or services from all its trading partners —
whether rich or poor, weak or strong.
6.2 National Treatment: Treating locals and foreigners equally:

 Imported and locally-produced goods should be treated equally — at least after the foreign
goods have entered the market.
 The same should apply to foreign and domestic services, and to foreign and local
trademarks, copyrights and patents.
 This principle of “national treatment” (giving others the same treatment as one’s own
nationals) is also found in all the three main WTO agreements (Article 3 of GATT, Article 17
of GATS and Article 3 of TRIPS), although once again the principle is handled slightly
differently in each of these.
 National treatment only applies once a product, service or item of intellectual property has
entered the market.
 Therefore, charging customs duty on an import is not a violation of national treatment even
if locally-produced products are not charged an equivalent tax.
6.3 Freer trade: Gradually through negotiation

 Lowering trade barriers is one of the most obvious means of encouraging trade.
 The barriers concerned include customs duties (or tariffs) and measures such as import bans
or quotas that restrict quantities selectively.
 From time to time other issues such as red tape and exchange rate policies have also been
discussed.
 Opening markets can be beneficial, but it also requires adjustment. The WTO agreements
allow countries to introduce changes gradually, through “progressive liberalization”.
 Developing countries are usually given longer to fulfil their obligations.
6.4 Predictability: through binding and transparency:

 Sometimes, promising not to raise a trade barrier can be as important as lowering one,
because the promise gives businesses a clearer view of their future opportunities.
 With stability and predictability, investment is encouraged, jobs are created and consumers
can fully enjoy the benefits of competition — choice and lower prices.
 The multilateral trading system is an attempt by governments to make the business
environment stable and predictable.
 In the WTO, when countries agree to open their markets for goods or services, they “bind”
their commitments.
 For goods, these bindings amount to ceilings on customs tariff rates. Sometimes countries
tax imports at rates that are lower than the bound rates. Frequently this is the case in
developing countries. In developed countries the rates actually charged and the bound rates
tend to be the same.
 A country can change its bindings, but only after negotiating with its trading partners, which
could mean compensating them for loss of trade.
 One of the achievements of the Uruguay Round of multilateral trade talks was to increase
the amount of trade under binding commitments.
 In agriculture, 100% of products now have bound tariffs. The result of all this: a substantially
higher degree of market security for traders and investors.
 The system tries to improve predictability and stability in other ways as well.
 One way is to discourage the use of quotas and other measures used to set limits on
quantities of imports — administering quotas can lead to more red-tape and accusations of
unfair play.
 Another is to make countries’ trade rules as clear and public (“transparent”) as possible.
 Many WTO agreements require governments to disclose their policies and practices publicly
within the country or by notifying the WTO.
 The regular surveillance of national trade policies through the Trade Policy Review
Mechanism provides a further means of encouraging transparency both domestically and at
the multilateral level.
6.5 Promising fair competition:

 The WTO is sometimes described as a “free trade” institution, but that is not entirely
accurate.
 The system does allow tariffs and, in limited circumstances, other forms of protection.
 More accurately, it is a system of rules dedicated to open, fair and undistorted competition.
 The rules on non-discrimination — MFN and national treatment — are designed to secure
fair conditions of trade.
 So too are those on dumping (exporting at below cost to gain market share) and subsidies.
 The issues are complex, and the rules try to establish what is fair or unfair, and how
governments can respond, in particular by charging additional import duties calculated to
compensate for damage caused by unfair trade.
 Many of the other WTO agreements aim to support fair competition: in agriculture,
intellectual property, services, for example. The agreement on government procurement (a
“plurilateral” agreement because it is signed by only a few WTO members) extends
competition rules to purchases by thousands of government entities in many countries.
6.6 Encouraging Development and Economic Reform:

 The WTO system contributes to development.
 On the other hand, developing countries need flexibility in the time they take to implement
the system’s agreements.
 And the agreements themselves inherit the earlier provisions of GATT that allow for special
assistance and trade concessions for developing countries.
 Over three quarters of WTO members are developing countries and countries in transition
to market economies.
 During the seven and a half years of the Uruguay Round, over 60 of these countries
implemented trade liberalization programmes autonomously.
 At the same time, developing countries and transition economies were much more active
and influential in the Uruguay Round negotiations than in any previous round, and they are
even more so in the current Doha Development Agenda.
 At the end of the Uruguay Round, developing countries were prepared to take on most of
the obligations that are required of developed countries.
 But the agreements did give them transition periods to adjust to the more unfamiliar and,
perhaps, difficult WTO provisions — particularly so for the poorest, “least-developed”
countries.
 A ministerial decision adopted at the end of the round says better-off countries should
accelerate implementing market access commitments on goods exported by the least-
developed countries, and it seeks increased technical assistance for them.
 More recently, developed countries have started to allow duty-free and quota-free imports
for almost all products from least-developed countries.
 On all of this, the WTO and its members are still going through a learning process. The
current Doha Development Agenda includes developing countries’ concerns about the
difficulties they face in implementing the Uruguay Round agreements.
7 What was discussed in the latest (10th Ministerial Conference of WTO) at

Nairobi, Kenya in 2015?
 At the 10th WTO Ministerial Conference in December 2015, WTO members agreed on a
number of significant issues within the Doha Development Agenda and outlined the way
forward in WTO negotiations.
 The Nairobi ministerial declaration for the first time opened a new window of opportunity
for WTO Members to explore new approaches to advance on ongoing negotiations and
possibly consider expanding the scope of WTO rules to cover new issues.
 To understand it better, it is important to have a look at the Doha Development Agenda.
Note: In the last section of this document, the Nairobi package is explained in detail.
7.1 What is Doha Development Agenda?

 The Doha Round of world trade negotiations - also known as the Doha Development Agenda
- was launched in Doha, Qatar in November 2001.
 The talks aimed at further liberalizing trade, whilst making it easier for developing
countries, particularly Least Developed Countries (LDCs), to integrate into the WTO
multilateral system.
 The Doha Round began with a ministerial-level meeting in Doha, Qatar in 2001. Subsequent
ministerial meetings took place in Cancún, Mexico (2003), and Hong Kong (2005). Related
negotiations took place in Paris, France (2005), Potsdam, Germany (2007), and Geneva,
Switzerland (2004, 2006, 2008);
 Progress in negotiations stalled after the breakdown of the July 2008 negotiations over
disagreements concerning agriculture, industrial tariffs and non-tariff barriers, services, and
trade remedies.
 The most significant differences are between developed nations led by the European Union
(EU), the United States (US), and Japan and the major developing countries led and
represented mainly by India, Brazil, China, and South Africa. There is also considerable
contention against and between the EU and the US over their maintenance of agricultural
subsidies—seen to operate effectively as trade barriers.
The main issues at stake are:

 Reforming agricultural subsidies
 Ensuring that new liberalization in the global economy respects the need for
sustainable economic growth in developing countries
 Improving developing countries’ access to global markets for their exports
8 Agreement on Agriculture (AoA):

An important agreement with respect to India in WTO is the Agreement on Agriculture (AoA):
Let us see this in a detailed manner:
 WTO’s agreement on agriculture was concluded in 1994, and was aimed to remove trade
barriers and to promote transparent market access and integration of global markets.
 Agreement on agriculture stands on 3 pillars viz. Domestic Support, Market Access, and
Export Subsidies.
Domestic Support:
It refers to subsidies such guaranteed Minimum Price or Input subsidies which are direct and
product specific.
Under this, Subsidies are categorized into 3 boxes:
Green Box:
 Subsidies which are no or least market distorting includes measures decoupled from
output such as income-support payments (decoupled income support), safety – net
programs, payments under environmental programs, and agricultural research and-
development subsidies.
 Such as Income Support which is not product specific. Like in India farmer is supported for
specific products and separate support prices are there for rice, wheat etc. On the other
hand income support is uniformly available to farmers and crop doesn’t matter.
Blue Box:
Only ‘Production limiting Subsidies’ under this are allowed. They cover payments based on acreage,
yield, or number of livestock in a base year.
Amber Box:
 Those subsidies which are trade distorting and need to be curbed.

 The Amber Box contains category of domestic support that is scheduled for reduction based
on a formula called the “Aggregate Measure of Support” (AMS).
 The AMS is the amount of money spent by governments on agricultural production, except
for those contained in the Blue Box, Green Box and ‘de minimis’.
De minimis provision:
 Under this provision developed countries are allowed to maintain trade distorting subsidies
or ‘Amber box’ subsidies to level of 5% of total value of agricultural output.
 For developing countries this figure was 10%.
 So far India’s subsidies are below this limit, but it is growing consistently.
 This is because MSP are always revised upward whereas Market Prices have fluctuating
trends.
 By this analogy India’s amber box subsidies are likely to cross 10% level allowed by de
Minimis provision.
Market Access:
 The market access requires that tariffs fixed (like custom duties) by individual countries be
cut progressively to allow free trade.
 It also required countries to remove non-tariff barriers and convert them to Tariff duties.
Export Subsidy:
 These can be in form of subsidy on inputs of agriculture, making export cheaper or can be
other incentives for exports such as import duty remission etc.
 These can result in dumping of highly subsidized (and cheap) products in other country.
 This can damage domestic agriculture sector of other country.
 With regard to Export Subsidy, we have a mechanism known as Special Safeguard
Mechanism.
Special Safeguard Mechanism:
A Special Safeguard Mechanism (SSM) would allow developing countries to impose additional
(temporary) safeguard duties in the event of an abnormal surge in imports or the entry of
unusually cheap imports.
India-U.S Peace Clause:
 India and the US reached an understanding on working out a “permanent solution” to the
issue of public stockholding for food security purposes at the World Trade Organisation
(WTO).
 The deal is seen as a breakthrough, ending the impasse that had stalled the implementation
of a landmark Trade Facilitation Agreement (TFA) hammered out at the WTO’s ministerial
conference in Bali.
What is this Peace Clause all about?
 It allows countries such as India to continue to freely procure and stock grains for the public
distribution system even if subsidies resulting from these breach limits under the WTO’s
Agreement on Agriculture (AoA).
 The original peace clause proposed at the Bali ministerial conference provided only a four-
year reprieve, during which no country would be penalised for any excessive expenditures
on food security programmes.
 The India-US agreement – which has to be endorsed by the WTO’s general council –
replaces this temporary peace clause with an open-ended one until a “permanent solution”
to the issue of farm subsidies linked to national food security is arrived at.
How was India able to achieve this breakthrough?
India had blocked the adoption of a TFA that commits WTO member-countries to simplify and
standardize their Customs procedures for expediting clearance of goods at ports/border posts.
Trade Facilitation Agreement (TFA):

 In December 2013, WTO members concluded negotiations on a Trade Facilitation
Agreement at the Bali Ministerial Conference, as part of a wider “Bali Package”
 The purpose of the new WTO Trade Facilitation Agreement is to expedite the
movement, release and clearance of goods, including goods in transit.
 Trade Facilitation Agreement (TFA) aims to harmonize various non-tariff barriers like
custom procedures or administrative hurdles in the developing & least developed
countries with current practices in developed countries.
India became the 76th member to ratify the trade facilitation agreement (TFA) of the
World Trade Organization and the agreement came into force in 2016.
What does the agreement include?

 Lowering import tariffs and agricultural subsidies: It will make it easier for
developing countries to trade with the developed world in global markets.
 Abolish hard import quotas: Developed countries would abolish hard import quotas
on agricultural products from the developing world and instead would only be
allowed to charge tariffs on amount of agricultural imports exceeding specific limits.
 Reduction in red tape at international borders: It aims to reduce red-tapism to
facilitate trade by reforming customs bureaucracies and formalities.
 India clubbed the inking of this pact with working out a “permanent solution” to address its
concerns over food security.
 This stance came under criticism, especially from industrialized countries who claimed that
it had left India isolated at the WTO.
 But with the US now agreeing to an indefinite peace clause, India’s position has seemingly
been vindicated.
Why is a permanent solution important for India and what are the issues India is facing?
Problem in calculating the subsidies:
 One reason is the way subsidies are calculated under the AoA.
 A farmer producing, say, wheat is considered receiving a subsidy if the procurement price
paid to him is higher than a world “reference” price, which is, however, taken at the levels
prevailing during 1986-88.
 Global wheat prices averaged below $ 125 a tonne then, as against $ 240-250 now. This
obviously exaggerates the extent of any subsidy.
 India wants the subsidy computation methodology to reflect current international prices. It
will, then, have more flexibility in fixing minimum support prices (MSP), which have already
crossed $ 235 per tonne in wheat.
Problem in public stockholding norms:
 Secondly, the AoA rules on public stockholding are vague and general.
 While direct provision of food to vulnerable consumers at subsidised prices is permitted,
such programmes are not to have “the effect of providing price support to producers”.
 At the same time, there is specific exemption with regard to supporting “low-income or
resource-poor producers”.
 According to India, over 90 per cent of its farmers fall under this category and hence the
subsidies incurred its food security programmes would be exempt from any reduction
commitments under AoA.
Greater clarity on these provisions is what India is seeking as part of a “permanent

solution”.
Why is US having a problem with India’s stockholding program?
 In its most recent filing before WTO, India said its total domestic support for agriculture
amounted to $ 56.1 billion in 2010-11, of which $ 13.8 billion was on public stockholding for
food security purposes.
 The US may not mind India’s procuring and stocking food grains, so long as these do not end
up distorting global trade.
 In the last two years, India has exported over 12 million tonnes of wheat worth $ 3.5 billion
– all of this from its public stocks.
 During the upcoming negotiations, US could insist that India refrain from exporting grain
procured ostensibly for domestic food security purposes.
9 Nairobi Package:
At the end of the five-day meeting, ministers adopted the “Nairobi Package”, including six
ministerial decisions on agriculture, cotton and issues of particular interest to least-developed
countries (LDCs).
Agriculture
 On export competition, developed countries committed to remove export subsidies

immediately, except for a handful of agriculture products, which were given extra but
limited time.
 Developing countries will do so by 2018, although net food-importing developing countries
will have more time.
 The decision also contains new rules on export financing support, international food aid and
exporting state-trading enterprises.
 A ministerial decision on public stockholding for food security commits WTO members to
engage constructively in finding a permanent solution to the issue of countries stockpiling
staple food crops for food security purposes.
 The Bali ministerial decision of 2013 set a deadline of the 11th Ministerial Conference in
2017 for resolving this matter. Until a permanent solution is approved, food stockpiling at
administered prices will continue to be protected from legal action by WTO members as
long as certain conditions are met.
 Ministers decided that negotiations to establish a special safeguard mechanism – which
would allow developing countries to raise tariffs temporarily to deal with import surges or
price falls – will take place in dedicated sessions of the Committee on Agriculture and
progress in these negotiations will be regularly reviewed by the General Council.
Cotton
 Ministers stressed the vital importance of cotton to LDCs (Least Developed Countries).
 Their decision mandates developed countries to prohibit cotton export subsidies
immediately while developing countries are required to do so no later than 1 January 2017.
 It also includes a commitment by developed countries – and those developing countries
declaring they are able to do so – to grant duty-free and quota-free market access to cotton
exports from LDCs from 1 January 2016, to the extent provided for in their respective
preferential trade arrangements.
LDC issues
 Ministers built on the 2013 Bali Ministerial Decision on preferential rules of origin for LDCs,
which set out, for the first time, guidelines to help make it easier for LDC exports to qualify
for preferential market access.
 The latest decision provides more detailed directions on issues such as methods for
determining when a product qualifies as “made in an LDC”.
 Ministers also extended a current waiver under which WTO members may grant
preferential treatment to LDC services.
 The waiver, adopted in December 2011, runs 15 years.
 Ministers extended it an additional four years until 31 December 2030.
 WTO members also agreed to continue negotiations on a longstanding proposal to shield
trade-distorting public stockholding programmes for food security in developing countries
from legal challenge and on a proposal to allow developing countries to temporarily raise
their tariffs to deal with import surges or price falls (the so-called "special safeguard
mechanism").
Other decisions
 Ministers took three decisions regarding the regular work of WTO committees.
 On small economies, they reaffirmed their commitment to the work programme.
 They extended a current moratorium on so-called non-violation and situation complaints in
intellectual property.
 On e-commerce, ministers extended a moratorium on imposing customs duties on
electronic transmission.
Landmark information technology deal
 WTO members representing major exporters of IT products concluded a landmark deal to

eliminate tariffs on 201 information technology products valued at over U$ 1.3 trillion per
year.
 DG Azevêdo called it the “first major tariff-cutting deal at the WTO since 1996”.
Negotiations on the expanded Information Technology
Agreement was reached by 53 WTO members but all members will benefit from duty-free market
access to the markets of members eliminating tariffs on these products. Under the agreement,
approximately 65 per cent of tariff lines will be fully eliminated by 1 July 2016 and by 2019 almost
all of the relevant products will be duty free.
Finally, a declaration was signed by all Ministers:

 As part of the declaration, the Doha Development Agenda was not reconfirmed as
such due to differences among WTO members regarding the value of the previously
made attempts to reach consensus.
 While WTO members expressed their strong interest to advance negotiations on
remaining Doha issues, some of them also supported the adoption of new
approaches to advance on these issues.
 The declaration also recognizes that some members wish to open negotiations on
new issues in the WTO.
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Summary Sheet
ESI- International Financial Institutions
Important Points
videos and notes
Mock Test

 Introduction: What are International Financial Institutions (IFIs) and how are they important?
 IFIs (International Financial Institutions) are institutions that provide financial support and
professional advice for economic and social development activities in developing countries and
promote international economic cooperation and stability.
 All IFIs are active in supporting programs that are global in scope, in addition to their primary
role of financing and providing technical assistance to programs at the country level.
 Several other publicly owned international banks and funds also lend to developing countries,
and these are often grouped together as other multilateral financial institutions rather than as
IFIs.
 They usually have a relatively narrow ownership or membership structure or focus on particular
sectors or activities.
 The World Bank

 The World Bank is an international organization that assists emerging market countries to
reduce poverty.
 The World Bank is not a bank in the conventional sense of the word. Instead, it consists of two
development institutions: ‘The International Bank for Reconstruction and Development (IBRD)
and the International Development Association (IDA)’. The Bank's 189-member countries own
them.
 The Bank works closely with three other organizations. They are the International Finance
Corporation (IFC), the Multilateral Guarantee Agency (MIGA), and the International Centre for
the Settlement of Investment Disputes (ICSID). All five organizations make up the World Bank
Group.

 The Functions of the Five Institutions of the World Bank Group:
The International Bank for Reconstruction and Development (IBRD):
 It offers assistance to middle income and poor but credit worthy countries, and it also works as
an umbrella for more specialized bodies under the World Bank.
 The IBRD was the original arm of the World Bank that was responsible for the reconstruction of
post-war Europe.
The International Development Association (IDA): It offers loans to the world's poorest countries. These
loans come in the form of "credits," and are essentially interest-free. They offer a 10-year grace period
and hold a maturity of 35 years to 40 years.
The International Finance Corporation (IFC): It works to promote private sector investments by both
foreign and local investors. It provides advice to investors and businesses, and it offers normalized
financial market information through its publications, which can be used to compare across markets.
The Multilateral Investment Guarantee Agency (MIGA): It supports direct foreign investment into a
country by offering security against the investment in the event of political turmoil.
The International Centre for Settlement of Investment Dispute (ICSID): It facilitates and works towards
a settlement in the event of a dispute between a foreign investor and a local country.
 Purpose and Functions

The World Bank focuses on six areas:
1. Overcome poverty by spurring growth especially in Africa.
2. Help reconstruct countries emerging from war, the biggest cause of extreme poverty.
3. Provide a customized solution to help middle-income countries remain out of poverty.
4. Spur governments to prevent climate change. It helps them control communicable diseases,
(especially HIV/AIDS and malaria). It also manages international financial crises and promotes
free trade.
5. Work with the League of Arab States in three areas, to improve education, build infrastructure,
and provide micro-loans to small businesses.
6. Share its expertise with developing countries reports and its interactive online database.

 Membership
 There are 189-member countries that are shareholders in the IBRD, which is the primary arm of
the WBG.
 To become a member, however, a country must first join the International Monetary Fund
(IMF).
 The size of the World Bank's shareholders, like that of the IMF's shareholders, depends on the
size of a country's economy. Thus, the cost of a subscription to the World Bank is a factor of the
quota paid to the IMF.
The largest shareholders include the United States (17.25% of total subscribed capital), Japan (7.42%),
China (4.78%), Germany (4.33%), and France and the United Kingdom (with 4.06% each).
 The president of the World Bank (Jim Yong Kim) comes from the largest shareholder, which is
the United States, and members are represented by a Board of Governors.
 Throughout the year, however, powers are delegated to a board of 24 Executive Directors (EDs).
 The International Monetary Fund (IMF)
The International Monetary Fund is an organization of 189-member countries.
It stabilizes the global economy in three ways.

 First, it monitors global conditions and identifies risks.
 Second, it advises its members on how to improve their economies.
 Third, it provides technical assistance and short-term loans to prevent financial crises.
The IMF's goal is to prevent these disasters by guiding its members.

Background:
 The IMF was born at the end of World War II, out of the Bretton Woods Conference in 1945.
 With its sister organization, the World Bank, the IMF is the largest public lender of funds in the
world.
 Membership is open to any country that conducts foreign policy and accepts the organization's
statutes.
Internal working arrangement of IMF:
Board of Governors:
 The Board of Governors, the highest decision-making body of the IMF, consists of one
governor and one alternate governor for each member country.
 The governor is appointed by the member country and is usually the Minister of Finance or
the Governor of the Central Bank.
 All powers of the IMF are vested in the Board of Governors.
The Executive Board:
 The Executive Board (the Board) is responsible for conducting the day-to-day business of the
IMF.
 It is composed of 24 Directors, who are elected by member countries or by groups of countries,
and the Managing Director, who serves as its Chairman.
 The IMF gets its money from quota subscriptions paid by member states.
 The size of each quota is determined by how much each government can pay according to the
size of its economy.
 The quota in turn determines the weight each country has within the IMF - and hence its voting
rights - as well as how much financing it can receive from the IMF.
 Twenty-five percent of each country's quota is paid in the form of special drawing rights (SDRs),
which are a claim on the freely usable currencies of IMF members.
Special Drawing Rights (SDRs):
 The SDR is not a currency; it is a unit of account by which member states can exchange with one
another in order to settle international accounts.
 The SDR can also be used in exchange for other freely-traded currencies of IMF members.

 A country may do this when it has a deficit and needs more foreign currency to pay its
international obligations.
 The SDR's value lies in the fact that member states commit to honor their obligations to use and
accept SDRs.
 Each member country is assigned a certain amount of SDRs based on how much the country
contributes to the Fund (which is based on the size of the country's economy).
 However, the need for SDRs lessened when major economies dropped the fixed exchange rate
and opted for floating rates instead.
 The IMF does all of its accounting in SDRs, and commercial banks accept SDR denominated
accounts.
 The currency value of the SDR is determined by summing the values in U.S. dollars, based on
market exchange rates, of a basket of major currencies (the U.S. dollar, Euro, Japanese yen,
pound sterling and the Chinese renminbi). The SDR currency value is calculated daily (except
on IMF holidays or whenever the IMF is closed for business) and the valuation basket is reviewed
and adjusted every five years.
IMF Benefits
 The IMF offers its assistance in the form of surveillance, which it conducts on a yearly basis for
individual countries, regions and the global economy as a whole.
 However, a country may ask for financial assistance if it finds itself in an economic crisis, whether
caused by a sudden shock to its economy or poor macroeconomic planning.
 A financial crisis will result in severe devaluation of the country's currency or a major depletion
of the nation's foreign reserves.
In return for the IMF's help, a country is usually required to embark on an IMF-monitored economic
reform program, otherwise known as Structural Adjustment Policies (SAPs).
Facilities of IMF to lend money:
There are three more widely implemented facilities by which the IMF can lend its money.
 A stand-by agreement
 The extended fund facility (EFF)
 Poverty reduction and growth facility (PRGF)
Criticisms
 Because the IMF lends its money with "strings attached" in the form of its SAPs (Structural
Adjustment Policies), many people and organizations are vehemently opposed to its activities.
 Opposition groups claim that structural adjustment is an undemocratic and inhumane means
of loaning funds to countries facing economic failure.
 Debtor countries to the IMF are often faced with having to put financial concerns ahead of social
ones.
 Thus, by being required to open up their economies to foreign investment, to privatize public
enterprises, and to cut government spending, these countries suffer an inability to properly fund
their education and health programs.
 Moreover, foreign corporations often exploit the situation by taking advantage of local cheap
labor while showing no regard for the environment.
 One of the other basic criticisms of the IMF has been that voting procedure in the governing body
gives abundant voting rights to the states which are major contributors to its fund. The procedure
is based on the Special Drawing Rights (SDR) which is supplementary foreign exchange reserves.
The decision-making power of each country depends on its SDR quota and is clearly against the
interests of the poorer countries.
Let us have a look at the recent IMF reforms:
The reforms were agreed upon by the 188 members of the IMF in 2010 in the aftermath of the global
financial meltdown. However, there implementations were delayed due to the time taken by the US
Congress to approve the changes. But, were finally approved by the US Congress in December 2015,
thus making them finally effective.
Key changes:
 Gives boost the representation of emerging economies like India, China, Brazil, Russia and
increases their power and greater say in IMF.
 India’s voting rights increased by 0.3% from the current 2.3% to 2.6%. China’s voting rights
increased by 2.2% from current 3.8% to 6 %.
 These reforms shifted more than 6% of the quota shares to emerging and developing countries
from the US and European countries. Russia and Brazil also have gained from the reforms. US’s
quota share dropped from 16.7 per cent to 16.5 per cent but it will retain its veto power.
 China will have the 3rd largest IMF quota and voting share after the US and Japan. While, India,
Russia and Brazil will also be among the top 10 members of the IMF.
 The combined quotas or the capital resources of IMF also have doubled due to reforms to $659
billion from current $329 billion.
 The doubling of quotas means that the shares (roles) of advanced European and Gulf countries
have been reduced and that of emerging nations particularly China has been increased.
 The voting power and quota shares of the IMF’s poorest member countries will be protected.
 Under the reform, for the first time IMF’s Executive Board will consist entirely of elected
Executive Directors and it ends the category of appointed Executive Directors.
 Other International Financial Institutions and multilateral Financial Institutions:
 Asian Development Bank

 The Asian Development Bank (ADB) is a regional development bank established on 19 December
1966, which is headquartered in the Ortigas Center located in Mandaluyong, Metro Manila,
Philippines.
 From 31 members at its establishment, ADB now has 67 members, of which 48 are from within
Asia and the Pacific and 19 outside.
 The ADB was modelled closely on the World Bank, and has a similar weighted voting system
where votes are distributed in proportion with members' capital subscriptions.
 ADB releases an annual report that summarizes its operations, budget and other materials for
review by the public.
 At the end of 2014, Japan holds the largest proportion of shares at 15.7%. The United States
holds 15.6%, China holds 6.5%, India holds 6.4%, and Australia holds 5.8%.
Organization
 The highest policy-making body of the bank is the Board of Governors, composed of one
representative from each member state.
 The Board of Governors also elect the Bank's President, who is the chairperson of the Board of
Directors and manages ADB.
 The president has a term of office lasting five years, and may be re-elected. Traditionally, and
because Japan is one of the largest shareholders of the bank, the president has always been
Japanese.
 The current president was Takehiko Nakao, who succeeded Haruhiko Kuroda in 2013.

Objectives
 The ADB defines itself as a social development organization that is dedicated to reducing poverty
in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth,
and regional integration.
 This is carried out through investments – in the form of loans, grants and information sharing –
in infrastructure, health care services, financial and public administration systems, helping
nations prepare for the impact of climate change or better manage their natural resources, as
well as other areas.
Lending
 The ADB offers "hard" loans on commercial terms primarily to middle income countries in Asia
and "soft" loans with lower interest rates to poorer countries in the region.
 Based on a new policy, both types of loans will be sourced starting January 2017 from the bank’s
ordinary capital resources (OCR), which functions as its general operational fund.
 ADB obtains its funding by issuing bonds on the world's capital markets.
 It also relies on the contributions of member countries, retained earnings from lending
operations, and the repayment of loans.
10 largest members with subscribed capital and voting rights are:
Way forward:

Strategy 2020:
 Strategy 2020 is a product of wide and extensive consultations with our 67-member countries.
It achieves the objective of clearly establishing the Asian Development Bank’s (ADB) role and
its strategic direction to the year 2020.
 Under Strategy 2020, a long-term strategic framework adopted in 2008, ADB will follow three
complementary strategic agendas: inclusive growth, environmentally sustainable growth,
 African Development Bank

 The African Development Bank Group (AfDB) is a multilateral development finance institution
established to contribute to the economic development and social progress of African
countries.
 The AfDB was founded in 1964 and comprises three entities: The African Development Bank, the
African Development Fund and the Nigeria Trust Fund.
 The AfDB’s mission is to fight poverty and improve living conditions on the continent through
promoting the investment of public and private capital in projects and programs that are likely
to contribute to the economic and social development of the region.
 While it was originally headquartered in Abidjan, Côte d'Ivoire, the bank's headquarters moved
to Tunis, Tunisia in 2003, due to the Ivorian civil war; before returning in September 2014.
 The European Bank for Reconstruction and Development

 The European Bank for Reconstruction and Development (EBRD) was established in 1991, when
communism was crumbling in central and eastern Europe and these countries needed support
to nurture a new private sector in a democratic environment.
 EBRD’s charter is unique among MDBs (Multilateral Development Banks) in that it stipulates
that EBRD may work only in countries that are committed to democratic principles.
 EBRD, which is headquartered in London, is owned by 60 countries and 2 intergovernmental
institutions, the European Union and the European Investment Bank.
 EBRD’s share capital is provided by its members.
 EBRD does not directly use shareholders’ capital to finance its loans.
 Instead, its triple-A creditworthiness rating enables it to borrow funds in the international capital
markets by issuing bonds and other debt instruments at highly favorable market rates.

 Although its shareholders are in the public sector, EBRD invests mainly in private enterprises,
usually together with commercial partners.
 It provides project financing for banks, industries, and individual businesses, in the form of both
new ventures and investments in existing companies.
 Other multilateral financial institutions and banks:
 CAF – Development Bank of Latin America

 The Corporacion Andina de Fomento (CAF) – Banco de Desarrollo de América Latina (English:
Andean Development Corporation – Development Bank of Latin America), has the mission of
stimulating sustainable development and regional integration by financing projects in the public
and private sectors, and providing technical cooperation and other specialized services.
 Founded in 1970 and currently with 18-member countries from Latin America, the Caribbean,
and Europe along with 14 private banks, CAF is one of the main sources of multilateral financing
and an important generator of knowledge for the region.
 CAF is headquartered in Caracas, Venezuela. Additionally, it has Representative Offices in Lima,
Brasilia, Bogota, Buenos Aires, Quito, Panama, Montevideo, and La Paz.
 Islamic Development Bank

 The Islamic Development Bank (IDB) is a multilateral development financing institution located
in Jeddah, Saudi Arabia.
 It was founded in 1973 by the Finance Ministers at the first Organisation of the Islamic
Conference (now called the Organisation of Islamic Cooperation) with the support of the king of
Saudi Arabia at the time, and began its activities on 20 October 1975. There are 56 shareholding
member states.
 European Investment Bank

 The European Investment Bank (EIB) is the European Union's non-profit long-term lending
institution established in 1958 under the Treaty of Rome.
 As a "policy-driven bank" whose shareholders are the member states of the EU, the EIB uses its
financing operations to bring about European integration and social cohesion. It should not be
confused with the European Central Bank.
 The EIB is a publicly owned international financial institution and its shareholders are the EU
member states.

 Thus the member states set the bank's broad policy goals and oversee the two independent
decision-making bodies—the board of governors and the board of directors.
 It is the world's largest international public lending institution.
 Asian Infrastructure Investment Bank

 The Asian Infrastructure Investment Bank (AIIB) is an international financial institution that aims
to support the building of infrastructure in the Asia-Pacific region.
 The bank has 50-member states of founding members, plus 20 regular members (up to 2017)
and was proposed as an initiative by the government of China.
 The initiative gained support from 37 regional and 20 non-regional Prospective Founding
Members (PFM), all of which have signed the Articles of Agreement that form the legal basis for
the bank.
 The bank started operation after the agreement entered into force on 25 December 2015, after
ratifications were received from 10-member states holding a total number of 50% of the initial
subscriptions of the Authorized Capital Stock.
 Major economies that did not become PFM include the G7/G8 members' Japan and the United
States, although Canada applied for membership on 23 September 2016.
 The capital of the bank is $100 billion, equivalent to 2⁄3 of the capital of the Asian Development
Bank and about half that of the World Bank.
 The bank was proposed by China in 2013 and the initiative was launched at a ceremony in
Beijing in October 2014.
Legal basis and membership
 The Articles of Agreement form the legal basis for the Bank.
 57 Prospective Founding Members (PFM) named in annex A of the agreement are eligible to sign
and ratify the Articles, thus becoming a member of the Bank.
 Other states, which are parties to the International Bank for Reconstruction and Development or
the Asian Development Bank may become members after approval of their accession by the
bank.
 In 2017, a group of 13 was designated prospective members: 5 regional (Afganistan, Armenia,
Fiji, Hongkong China, Timor Leste) and 8 non regional: Belgium, Canada, Ethiopia, Hungary,
Ireland, Peru, Sudan and Venezuela.

Governance
 The bank's governance structure is composed of the Board of Governors as the top-level and
highest decision-making body.
 It is composed of 1 governor for each member state of the bank and in principle meets once a
year.
 New Development Bank (NDB)

 The New Development Bank (NDB), formerly referred to as the BRICS Development Bank, is a
multilateral development bank established by the BRICS states (Brazil, Russia, India, China and
South Africa).
 According to the Agreement on the NDB, "the Bank shall support public or private projects
through loans, guarantees, equity participation and other financial instruments." Moreover,
the NDB "shall cooperate with international organizations and other financial entities, and
provide technical assistance for projects to be supported by the Bank."
 The initial authorized capital of the bank is $100 billion divided into 1 million shares having a par
value of $100,000 each.
 The initial subscribed capital of the NDB is $50 bln divided into paid-in shares ($10 bln) and
callable shares ($40 bln).
 The initial subscribed capital of the bank was equally distributed among the founding members.

 The Agreement on the NDB specifies that the voting power of each member will be equal to
the number of its subscribed shares in the capital stock of the bank.
 NDB is currently headquartered at Oriental Financial Centre in Shanghai, China.
Structure of the Bank:
According to the Articles of Agreement, the main organs of the bank are:
 Board of Governors
 Board of Directors
 President and Vice-Presidents
The NDB President will be elected on a rotational basis from one of the founding members, and there
will be at least one Vice President from each of the other four founding members.
The first chair of the Board of Governors is from Russia and the first chair of the Board of Directors is
from Brazil.
Objectives
The bank aims to contribute to development plans established nationally through projects that are
socially, environmentally and economically sustainable. Taking this into account, the main objectives of
the NDB can be summarized as follows:
 Promote infrastructure and sustainable development projects with a significant development

impact in member countries.
 Establish an extensive network of global partnerships with other multilateral development
institutions and national development banks.
 Build a balanced project portfolio giving a proper respect to their geographic location, financing
requirements and other factors.
Membership
 The Agreement on the New Development Bank entered into force in July 2015, with the
ratification of all five states that have signed it. The five founding members of the Bank include
Brazil, Russia, India, China and South Africa.
 Bank's Articles of Agreement specify that all members of the United Nations could be members
of the bank.

 According to the NDB vice-president Zhu Xian, it is very likely that we will see new members
joining the bank in 2017 or 2018.
Expanding the NDB's membership is considered by some experts to be crucial to its long-term
development by helping boost the bank’s business growth.
Worksheet

2. True /False
3. MCQs
4. Match the column
Happy Learning!!!

Summary Sheet
ESI- Industrial and Labor policy
Important Points
videos and notes
Mock Test

 Industrial Policy: Introduction:
 The industrial policy means the procedures, principles, policies, rules and regulations which
control the industrial undertaking of the country and pattern of industrialization.
 It explains the approach of Government in context to the development of industrial sector.
Evolution of India’s Industrial Policies:
The evolution of India's industrial policies can be seen by dividing the entire study into three phases
namely: -
 First, Industrial Policies of India prior to Independence;
 Second, Industrial Policies of India after Independence up to 1990 and;
 Third, Industrial Policy of 1991 and thereafter policies.
 Industrial policies of India prior to Independence
 India’s economic activity before Independence:

India was never an industrially developed country prior to independence. It was an agrarian country
where in handicrafts attained supremacy unmatched anywhere else in the world.
The situation of India during the colonial period:

 During the colonial period, industrial policies and economic policies were shaped by the British
Government in favour of British interests.
 The tariff policy pursued by British rulers in India was based on the principal of one-way free
trade while the Indian interest for industrialization in India remained deliberately neglected.
 Industrial Policies of India after Independence upto 1990:
Industrial Policy Resolution, 1948

 The first important industrial policy statement was made in the Industrial policy Resolution (IPR),
1948.
 The main thrust of IPR, 1948 was to lay down the foundation of mixed economy whereby the
private and public sector was accepted as important components in the development of
industrial economy of India.
The policy divided the industries into four broad categories:

 Industries with Exclusive State Monopoly: It included industries engaged in the activity of
atomic energy, railways and arms and ammunition.
 Industries with Government Control: It included the industries of national importance and so
needs to be registered. 18 such industries were put under this category eg. fertilizers, heavy
chemical, heavy machinery etc.
 Industries in the Mixed Sector: It included the industries where private and public sector were
allowed to operate. Government was allowed to review the situation to acquire any existing
private undertaking.
 Industries under Private Sector: Industries not covered by above categories fell in this
category.
Industries (Development and Regulation) Act (IDRA), 1951

 IDRA, 1951 is the key legislation in the industrial regulatory framework.
 IDRA, 1951 gave powers to the government to regulate industry in a number of ways.
 The main instruments were the regulation of capacity (and hence output) and power to control
prices.
 It specified a schedule of industries that were subject to licensing.
 Even the expansion of these industries required prior permission of the government which
means the output capacity was highly regulated.
 All existing undertakings at the commencement of the Act, except those owned by the Central
Government were compulsorily required to register with the designated authority.
 No one except the central Government would be permitted to set up any new industrial
undertaking “except under and in accordance with a licence issued in that behalf by the Central
Government.”
Industrial Policy Resolution, 1956

IPR, 1956 is the next important policy statement. The important provisions are as follows:
 New classification of Industries: IPR, 1956 divided the industries into the following three
categories:
 Schedule A industries: The industries that were the monopoly of state or Government. It
included 17 industries. The private sector was allowed to operate in these industries if national
interest so required.

 Schedule B industries: In this category of industries state was allowed to establish new units but
the private sector was not denied to set up or expand existing units e.g. chemical industries,
fertilizer, synthetic, rubber, aluminum etc.
 Schedule C industries: The industries not mentioned in the above category formed part of
Schedule C. Thus, the IPR, 1956 emphasized the mutual existence of public and private sector
industries.
 Encouragement to Small-scale and Cottage Industries: In order to strengthen the small-scale
sector supportive measures were suggested in terms of cheap credit, subsidies, reservation etc.
 Emphasized on Reduction of Regional Disparities: Fiscal concessions were granted to open
industries in backward regions. Public sector enterprises were given greater role to develop these
areas.
Monopolies Commission
 In April 1964, the Government of India appointed a Monopolies Inquiry Commission “to inquire
into the existence and effect of concentration of economic power in private hands.”
 The Commission looked at concentration of economic power in the area of industry.
 On the basis of recommendation of the commission, Monopolistic and Restrictive Trade
Practices Act (MRTP Act), 1969 was enacted.
 The act sought to control the establishment and expansion of all industrial units that have asset
size over a particular limit.
Industrial Policy Statement, 1977: The main elements of the new policy were:
 Development of Small-Scale Sector:

 The small sector was classified into 3 categories viz. Cottage and household industries which
provide self-employment; tiny sector and small-scale industries.
 The purpose of the classification was to specifically design policy measures for each category.
 Restrictive Approach towards Large Business Houses:

 The large-scale sector was allowed in basic, capital goods and high-tech industries.
 The policy emphasized that the funds from financial institutions should be made available largely
for the development of small sector.

 Expanding Role of Public sector:
Industrial Policy, 1980: The industrial policy 1980 emphasized that the public sector is the pillar of
economic infrastructure for reasons of its greater reliability, for the large investments required and the
longer gestation periods of the projects crucial for economic development.
The important features of the policy were:
 Effective Management of Public Sector:
 Liberalization of Industrial licensing:
The policy statement provided liberalized measures in the licensing in terms of automatic
approval to increase capacity of existing units under MRTP and FERA.
 Redefining Small-Scale Industries:
 The investment limit to define SSI was increased to boost the development of this sector.
 In case of tiny sector, the investment limit was raised to Rs.1 lakh; for small scale unit the
investment limit was raised from Rs.10 lakh to Rs.20 lakh and for ancillaries from Rs.15 lakh to
Rs.25 lakh.
Era of Liberalization after 80’s: After 1980, an era of liberalization started, and the trend was gradually
to dilute the strict licensing system and allow more freedom to the entrepreneurs.
 New Industrial Policy of 1991: The new government by Shri Narasimha Rao, which took office in
June 1991, announced a package of liberalization measures under its Industrial Policy on July 24,
1991.
Objectives of the New Industrial Policy:
 Liberalizing the industry from the regulatory devices such as licenses and controls.
 Enhancing support to the small-scale sector.
 Increasing competitiveness of industries for the benefit of the common man.
 Ensuring running of public enterprises on business lines and thus cutting their losses.
 Providing more incentives for industrialization of the backward areas, and
 Ensuring rapid industrial development in a competitive environment.
The major provisions of this Act are:

 Abolition of Industrial Licensing:
 Under this policy no licenses are required for setting up new industrial units or for substantial
expansion in the capacity of the existing units, except for a short list of industries relating to
country’s security and strategic concerns, hazardous industries and industries causing
environmental degradation.
 To begin with, 18 industries were placed in this list of industries that require licenses.
 Through later amendment to the policy, this list was reduced.
 It now covers only five industries relating to health security and strategic concerns that require
compulsory licensing.
 De-reservation of Industries for Public Sector:

With this view, the following changes were made in the policy regarding public sector industries:
 Reduced reservation for public sector:

 Out of the 17 industries reserved for the public sector under the 1956 industrial policy, the new
policy de-reserved 9 industries and thus limited the scope of public sector to only 8 industries.
 Later, a few more industries were de-reserved and now the exclusive area of the public sector
remains confined to only 4 industrial sectors which are: (i) defence production, (ii) atomic
energy, (iii) railways and (iv) minerals used in generation of atomic energy.
 Efforts to revive loss making enterprise:

 Greater autonomy to public enterprises:
 Liberalized Policy Towards Foreign Capital and Technology:
Changes in the MRTP Act:

 According to the Monopolies and Restrictive Trade Practices (MRTP) Act, 1969, all big companies
and large business houses (which had assets of Rs. 100 crores or more, according to the 1985
amendment to the Act) were required to obtain clearance from the MRTP Commission for setting
up any new industrial unit, because such companies (called MRTP companies) were allowed to
invest only in some selected industries.
 Thus, besides obtaining a licence they were also required to get MRTP clearance.
 This was a big impediment for industrial development as the big business firms which had the
resources for development could not grow and diversify their activities.

 The Industrial Policy, 1991 has put these industries on par with others by abolishing those
provisions of the MRTP Act which mediate mandatory for the large industrial houses to seek prior
clearance from MRTP Commission for their new projects.
 Under the amended Act, the MRTP Commission will concern itself only with the control of
Monopolies and Restrictive Trade Practices that are unfair and restrict competition to the
detriment of consumer’s interests.
 Greater Support to Small-Scale Industries:
 Special Economic Zones (SEZ)

Government of India first introduced the concept of SEZ in the export import policy 2000 with a view
to provide an internationally competitive and hassle-free environment for exports.
The Special Economic Zone Act 2005:

The Act provides the umbrella legal framework, covering all important legal and regulatory aspects for
setting up of SEZ’s as well units operating in SEZ.
Who can set up a SEZ?

 Private
 Public
 Private/Public
 State Government
 State Government Agencies
Minimum area requirements for setting up a SEZ are as follows:
Salient Features

 A SEZ is a designated duty-free enclave to be treated as foreign territory for the purpose of trade
operations and duties and tariffs.
 A SEZ does not require a license for imports.
 The units must become net foreign exchange earners within 3 years.
 SEZ are allowed manufacturing, trading and service activities.
 Full freedom for subcontracting.
 The domestic sales from the SEZ are subject to full custom duties and import policy is in force,
when they sell their produce to domestic markets.
 There was no routine examination by the custom authorities.
 The corporation in SEZs will not have to pay any income tax on their profits for the first five
years and only 50% of the tax for 2 more years thereafter.
 If half of the profit is reinvested in the corporation, the concession of 50% tax is extendable for
next 3 years.
 For SEZ developers, the raw material from cement to steel to electrical parts are subject to zero
tax and duty.
 For the SEZ, the Government acquires vast land tracts and gives to the developers. The basic
condition involves that 25% of the area of the SEZ must be used only for export related
activities. Rest 75% area can be used for economical and social infrastructure. However, all SEZ
benefits are applicable over the entire SEZ area.
 There were provisions for sector specific SEZs and Multiproduct SEZs.
 NIMZ (National Investment and Manufacturing Zones)

 National Investment and Manufacturing Zones (NIMZs) will be developed as integrated industrial
townships with state-of-the art infrastructure and land use on the basis of zoning; clean and
energy efficient technology; necessary social infrastructure; skill development facilities, etc., to
provide a productive environment to persons transitioning from the primary sector to the
secondary and tertiary sectors.
 These NIMZs would be managed by SPVs (Special Purpose Vehicles).
 To enable the NIMZ to function as a self-governing and autonomous body, it will be declared by
the State Government as an Industrial Township under Article 243 Q(c) of the Constitution.

What is major difference from SEZ? NIMZ would be different from SEZs in terms of size, level of
infrastructure planning, and governance structures related to regulatory procedures and exit policies.
 National Manufacturing Policy

Important provisions:
This policy has been brought out in the year 2011:
 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.

Update:
Formulation of a New Industrial Policy:
 The Department of Industrial Policy and Promotion, Ministry of Commerce and Industry initiated
the process of formulation of a new Industrial Policy in May 2017.
 Since the last Industrial Policy announced in 1991, India has transformed into one of the fastest
growing economies in the world.
 With strong macro-economic fundamentals and several path breaking reforms in the last three
years, India is equipped to deploy a different set of ideas and strategies to build a globally
competitive Indian industry.
 The new Industrial Policy will subsume the National Manufacturing Policy.
What are the areas that would be covered in this policy?

The six thematic areas include
 Manufacturing and MSME;
 Technology and Innovation;
 Ease of Doing Business;
 Infrastructure, Investment,
 Trade and Fiscal policy; and
 Skills and employability for the future
Let us have a look at an initiative of the Government of India to promote the manufacturing sector of
India, thus forming a major part of its efforts towards a new Industrial Policy, ‘Make in India’ initiative.
Make In India Scheme:

 In order to make India a manufacturing hub, PM Narendra Modi launched the Make In India
Campaign at Vigyan Bhawan in New Delhi on September 26, 2014.
 The promotion is intended to appeal foreign companies to set up their manufacturing units in
India and to obtain larger foreign investment.
 P.M. Narendra Modi on his Independence Day speech had declared the Make in India policy.
Sectors for job creation: The ‘Make In India’ places stress on 25 sectors with emphasis on job creation
and skill development. These include: automobiles, chemicals, IT, pharmaceuticals, textiles, ports,

aviation, leather, tourism and hospitality, wellness, railways, auto components, design manufacturing,
renewable energy, mining, bio-technology, pharmaceuticals and electronics, etc.
 Industrial Corridors:
What is an Industrial Corridor?
An industrial corridor is a package of infrastructure spending allocated to a specific geographical area,

with the intent to stimulate industrial development. It aims to create an area with a cluster of
manufacturing or other industry.
The five industrial/economic corridors are:
 Delhi Mumbai Industrial Corridor (DMIC)
 Chennai-Bengaluru Industrial Corridor (CBIC)
 Bengaluru-Mumbai Economic Corridor (BMEC)
 Vizag-Chennai Industrial Corridor (VCIC)
VCIC forms a part of the East Coast Economic Corridor.
Let us understand more about this with the help of the recent developments:
 Multilateral funding agency Asian Development Bank (ADB) has approved $631 million loan for
building India’s first coastal industrial corridor between Visakhapatnam (Vizag) and Chennai.
 The fund will help develop the first key 800-km section of the planned 2,500-km East Coast
Economic Corridor.
Important points:
 The coastal industrial corridor is expected to boost development on eastern coast of India and
enable seamless trade links with other parts of Southeast and South Asia.
 The total cost of the project is 846 million dollars and work on it is expected to be over by 2031.
The remaining 215 million dollars will be funded by Andhra Pradesh government.
 The loan fund from ADB will help to build state-of-art industrial clusters, roads, efficient
transport, reliable water and power supplies with skilled workforce and good business policies.
 The new infrastructure will be built in the four main centres — Visakhapatnam, Amaravati,
Kakinada and Yerpedu-Srikalahasti — along the corridor.
 It will include 138 km of state highways and roads, 10 power substations, 488 km of drinking
water pipeline, 47 km of storm drains, water treatment plants and 281 km of power transmission
and distribution lines.
 Amritsar-Kolkata Industrial Corridor (AKIC)
National Industrial Corridor Development And Implementation Trust (NICDIT)
 Government of India has accorded approval for expanding the mandate and scope of Delhi
Mumbai Industrial Corridor Project Implementation Trust Fund (DMIC-PITF) and re-designated it
as National Industrial Corridor Development and Implementation Trust (NICDIT) for integrated
development of industrial corridors in the country.
 NICDIT will function under the administrative control of the Department of Industrial Policy
and Promotion.
 NICDIT will take up new Industrial Corridors, Nodes, Early Bird Projects and Standalone Projects
on the recommendation of State Governments.
 Golden Quadrilateral Project:
(This project was envisioned in the year 1999)

What are Dedicated Freight Corridors (DFC)?
 To develop the freight traffic infrastructure, the Government has designed an expansion drive
in the form of Dedicated Freight Corridors (DFC).
 In the first phase, two corridors-the Western DFC (1504 route km) and Eastern DFC (Estimated
1856 route km)- with a total length of about 3360 route km were launched.
 Construction responsibility of DFCs is with Dedicated Freight Corridor Corporation of India
Limited.
 Now let us see what is the Diamond Quadrilateral Project:

 The Diamond Quadrilateral is a project of the Indian railways to establish high speed rail
network in India.
 This quadrilateral will connect the four metro cities in India, i.e. Mumbai, Delhi, Kolkata and
Chennai.
 This project is similar to Golden Quadrilateral which is a roadway project which connects the four
metros by roads.

 To improve country's rail infrastructure there is a need to implement High-speed trains / Bullet
trains. So to fulfill this demand the Diamond Quadrilateral project was planned in 2014.
 The Ease of Doing Business in India:
First let us have a look at where does India stand in the world in the Ease of Doing Business:
World Bank’s Doing Business Report 2018:
 The World Bank has released the Doing Business (DB) Report, 2018.
 The Department of Industrial Policy and Promotion (DIPP) has announced that India ranks 100
among 190 countries assessed by the Doing Business Team.
 India has leapt 30 ranks over its rank of 130 in the Doing Business Report 2017.
 The DB Report is an assessment of 190 economies and covers 10 indicators which span the
lifecycle of a business.
 India has improved its rank in 6 out of 10 indicators (They are Resolving Insolvency, Paying Taxes,
Getting Credit, Enforcing Contracts, Protecting Minority Investors and Construction Permits)
and has moved closer to international best practices (Distance to Frontier score).
 Distance to Frontier (DTF): The Distance to Frontier measure shows the distance of each
economy from the frontier, which represents the best performance observed on each of the
indicators across all economies in the Doing Business sample since 2005.
 The score is out of 100 with 0 representing the lowest performance and 100 being the frontier.
 India’s Distance to Frontier scores: India’s Distance to Frontier score in Doing Business 2018 is
60.7, which means it is around 40 percentage points away from the frontier.
 India’s Distance to Frontier score improved by 4.7 percentage points in Doing Business 2018 from
56 in Doing Business 2017.
 This year, New Zealand ranked first with a Distance to Frontier score of 86.5, followed by
Singapore with 84.5.
 India’s Distance to Frontier scores improved the most in ‘Paying Taxes’ followed by ‘Getting
Credit’.
 This edition of the report acknowledges India as a top improver, with an improvement of 30
ranks compared to last year’s report, the highest jump in rank of any country in the DB Report,
2018.
 India is the only country in South Asia and BRICS economies to feature among most improved
economies of the DB Report this year.
 In South Asia region, India was top improver, but was ranked below Bhutan (75). Nepal (105),
Sri Lanka (111), Maldives (136), Pakistan (147), Bangladesh (177) and Afghanistan (183) were
ranked below India.
**The updates regarding this report will be covered as part of the Monthly Current Affairs
document.
 Improvement of Business Environment: e-Biz Project

 eBiz project is one of Mission mode Projects (MMPs) under the Digital India program of
 The project envisages setting up a G2B (Government to Business) portal to serve as a one-stop
shop for delivery of services to the investors and addresses the need of business and industry
from inception through the entire life-cycle.
 The eBiz project is being implemented on a Public Private Partnership (PPP) model, with M/s
Infosys Technologies Ltd selected as the concessionaire for designing, developing, maintaining
and expanding the eBiz solution & services for 10 years.
The eBiz Platform consist of 2 components namely:
 eBiz Portal which is the front-end that acts as the single point of entry and,
 The eBiz shared services infrastructure such as payment gateway, business vault to store
documents, SMS gateway etc.
 Foreign Direct Investment in India:

 FDI is an investment made by a company or individual in one country in another country, in the
form of either establishing business operations or acquiring business assets in the other country,
such as ownership or controlling interest in a foreign company.
 FDI in India can be done through two routes: Automatic Route and Government Route.
 Automatic route: In this, prior approval by the Government of India or Reserve Bank of India is
not required.
 Government route: In this, prior approval by government is required.
**For a detailed understanding of what is FDI and how is it different from FII, please refer to the
Balance of Payments (BoP) document.
Important Update:
 On August 28th, 2017, the Department of Industrial Policy and Promotion (DIPP) had issued the
updated and revised Foreign Direct Investment Policy, 2017 – 2018 (FDI Policy 2017).
 The FDI Policy 2017 incorporated various notifications issued by the Government of India over
the past year.
The major features of the new streamlined procedure for Government approval are:
 Abolition of the Foreign Investment Promotion Board (FIPB)

 Introduction of ‘Competent Authorities’
The FDI Policy 2017 defines and lists sector-specific administrative ministry / department as
‘Competent Authorities’ empowered to grant government approval for FDI.
 Introduction of ‘Standard Operating Procedure’ (SOP) to process FDI proposals
Consultation with the DIPP has been made strictly need based, leading to a more streamlined
procedure and expeditious timeline (maximum time of 10 weeks) for approval.
The following is the list that gives the limits of FDI in various sectors:

 Labour Policy:
Background:
"Labour" is a subject in the "Concurrent List" under the Constitution of India where both the Central
and State Governments are competent to enact legislations subject, however, to reservation of certain
matters for the Central Government.
What are the thrust areas of the government concerning the labour laws?
 Labour policy and legislation;

 Safety, health and welfare of labour;
 Social security of labour;
 Policy relating to special target groups such as women and child labour;
 Industrial relations and enforcement of labour laws in the central sphere;
 Adjudication of industrial disputes through Central Government Industrial Tribunals-cum-Labour
Courts and National Industrial Tribunals;
 Workers' education;
 Labour and employment statistics;
 Emigration of labour for employment abroad;
 Employment services and vocational training;
 Administration of central labour and employment services; and
 International cooperation in labour and employment matters.
 Labour Legislations:
The various labour legislations enacted by the Central Government can be classified into the following
different broad categories:
Laws relating to Industrial Relations
 Industrial Disputes Act, 1947

 Trade Unions Act, 1926
Laws relating to Wages
 Minimum Wages Act, 1948

 Payment of Wages Act, 1936
 Payment of Bonus Act, 1965
Laws relating to Social Security
 Employees' Provident Funds and Miscellaneous Provisions Act, 1952

 Employees' State Insurance Act, 1948
 Labour Welfare Fund Act (of respective States)
 Payment of Gratuity Act, 1972
 Employee's Compensation Act, 1923
Laws relating to Working Hours, Conditions of Services and Employment
 Factories Act, 1948

 Contract Labour (Regulation and Abolition) Act, 1970
 The Plantation Labour Act, 1951
 The Mines Act, 1952
Laws relating to Equality and Empowerment of Women
 Equal Remuneration Act, 1976

 Maternity Benefits Act, 1961 (the current one is the one amended in 2017)
Prohibitive Labour Laws
 Bonded Labour System (Abolition), Act, 1976

 Child Labour (Prohibition & Regulation) Act, 1986 (the current one is the amended one in 2016)
 The Beedi and Cigar Workers (Conditions of Employment) Act, 1966
 The Sexual Harassment at the Workplace (Prevention, Prohibition and Redressal) Act, 2013
Laws relating to Employment and Training

 Apprentices Act, 1961
 Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959
 Institutions
Ministry of Labor is there at Centre with 4 attached offices, 10 subordinate offices, 4 autonomous
organizations and adjudication bodies and Arbitration body.
 Office of Chief Labor Commissioner

 Labor Bureau – attached office
 Employee State Insurance Corporation
 Employee Provident Fund Organization
 International Labor Organization

 Founded in 1919 as a result of Treaty of Versailles, it became first specialized agency under
United Nations in 1945.
 Its vision is to secure humane working conditions for workers and to attain social justice for them
universally.
 It gave 4 core standards on labor which are part of general human rights as per UN declarations.
These are:
 Freedom of Association, Right to Organize and Right to Collective Bargaining
 Abolition of forced labor
 Minimum age of employment and abolition of child labor
 Prohibition on workplace discrimination and Equal pay for men and women for work of equal
value
There is an urgent need for Labour Reforms in India. Let us study why are reforms needed?
 Low employment
 Benefits limited to Organised Sector only
 Multiplicity, Complexity and Rigidities
 Ease of Doing Business is affected
 Jobless Growth
 Skill Development
 Global Competitiveness
What are the reforms needed?
 Labor to be shifted to ‘State List’

 Simplification of archaic laws
 Separate independent judicial system
 Improving Enforcement of Labor Laws
 Dispute resolution
 Digitization of the Employment Exchanges, digital sharing of data on registered job seekers
should be made mandatory for all Employment Exchanges.
 Insurance mechanism: An insurance scheme should be started for the retrenched workers from
the time the industry commenced operations, so that workers are not put to hardship later.
We shall have a look at the recent steps taken by the Government:
 Dedicated Shram Suvidha Portal: That would allot Labor Identification Number (LIN) to units
and allow them to file online compliance for 16 out of 44 labor laws.
 Random Inspection Scheme: To eliminate human discretion in selection of units for Inspection,
and uploading of Inspection Reports within 72 hours of inspection mandatory.
 Universal Account Number: Enables 4.17 crore employees to have their Provident Fund account
portable, hassle-free and universally accessible.
 Apprentice Protsahan Yojana: Government will support manufacturing units mainly and other
establishments by reimbursing 50% of the stipend paid to apprentices during first two years of
their training.
 Revamped Rashtriya Swasthya Bima Yojana: Introducing a Smart Card for the workers in the
unorganized sector seeded with details of two more social security schemes.
 The National Career Service is being implemented as a mission mode project to provide various
job-related services information on skills development courses, internships etc.
The Code on Wages Bill 2017

 As part of labour law reforms, the Government has undertaken the exercise of rationalization
of the 38 Labour Acts by framing 4 labour codes viz Code on Wages, Code on Industrial
Relations, Code on Social Security and Code on occupational safety, health and working
conditions.
 The Code on Wages Bill 2017 has been introduced in Lok Sabha on 10.08.2017 and it subsumes
4 existing Laws, viz. the Minimum Wages Act, 1948; the Payment of Wages Act, 1936; the
Payment of Bonus Act, 1965; and the Equal Remuneration Act, 1976.
 After the enactment of the Code on Wages, all these four Acts will get repealed. The
Codification of the Labour Laws will remove the multiplicity of definitions and authorities
leading to ease of compliance without compromising wage security and social security to the
workers.
Worksheet

2. True /False
3. MCQs
4. Match the column
Happy Learning!!!

All India Mini Mock Test Series for RBI Grade B 2018
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Can be taken by anyone at any time!
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What is this series all about?
The idea is to cover the entire syllabus of ESI and FM by dividing it into several parts and preparing a comprehensive test for each part.
How are these tests going to help the aspirants?
The objective of these tests is to help you to prepare for your exams in a scheduled manner. It would help you in time management and you can divide your
preparation into parts for easy understanding and retention.
How many questions shall each test contain?
50 (35 questions of 1 mark each and 15 questions of 2 marks each).
Total marks for each test?
65
What shall be the total duration of the test?
70 minutes.
What will be the frequency of the tests?
The tests would be conducted every Sunday.
When will the tests start?
The first test would be held on 7th January 2018.
Can I take the tests only on Sundays?
The tests would be live on every Sunday at 10 AM and after that it can be taken at any day, any time as per the student’s convenience.
What should I read for each test?
We have provided a Schedule for this Mini Mock Test Series wherein we have given a detailed breakup of the syllabus and the topics covered for each test.
Will only the Static part be covered?
No, we shall be covering both the concepts (Static part) and the current affairs.
Are these tests free?
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A comprehensive solution for each test will be provided after the completion of each test. The questions along with the detailed answers will be available
for download in the form of a PDF.
When will the schedule for FM be provided?
We shall be providing a detailed schedule for FM in the last week of February.
SCHEDULE
Test Date Syllabus Topics to be covered Books/References

1) Measurement of  What is economic growth  Ramesh Singh – Chapter
Test 07/01/2018 Growth: National  How can the capacity of an economy No.1,2,20
1 (The test would be live at Income and per be measured?  12th NCERT on
10 am, student can also capita income Macroeconomics
 GDP, GNP, NNP, NDP.
take the test later as per 2) Human  Human Development
his/her own Development  Concept of Market Price and Factor Report published by
convenience) cost UNDP
 Nominal GDP, Real GDP  Current growth updates
 Various Indicators to measure the released by World Bank,
change in prices IMF, Major International
Financial Institutions.
 Base Year Concept
 Methods to estimate the National (OR)
Income
 Other Concepts: Per Capita Income, EduTap Course Material
Purchasing Power Parity, Gross on these units which
Value Added, Basic Prices, Personal covers the syllabus via:
 Concept video
Income etc
 Content Sheet
 India’s GDP by various
 Summary Sheet
reports/financial institutions  Worksheet
 What is Human Development?  MCQs
 Human Development Approach  ESI and Finance in News
 Dimensions of Human Development Current Affairs Monthly
 The Human Development Report Document
(HDR) with detailed discussion on
the various indices it includes and
India specific data
 Gross National Happiness
 The World Happiness Report
1) Poverty Alleviation  What is poverty?  Ramesh Singh – Chapter
Test 14/01/2018 in India  Types of Poverty No.16,21
2 (The test would be live at 2) Employment
 How is Poverty measured?  PIB website
10 am, student can also Generation in India  Census 2011
 Identification of poor in India
take the test later as per 3) International  SECC 2011
his/her own Financial Institutions  Various Committees for Poverty  Labour Bureau Reports
convenience) Estimation in India  NITI Aayog website
 World Bank’s Poverty Line  Schemes and Budget
 Poverty in India: Important Facts and Allocation in the Union
Statistics Budget
 Global Hunger Index (GHI)  Websites and Reports of
Major Financial
 Universal Basic Income (UBI)
Institutions
 Types of Unemployment in India  Yojana
 Measurement of Unemployment
(based on National Sample Survey (OR)
Organization: NSSO)
 Status of Employment in India EduTap Course Material
on these units which
 Census 2011 data pertaining to
covers the syllabus via:
employment  Concept video
 Various terms related to  Content Sheet
Employment: Labour Force  Summary Sheet
Participation Rate (LFPR), Worker  Worksheet
Population Rate (WPR),  MCQs
Demographic Dividend, Dependency  ESI and Finance in News
Current Affairs Monthly
Ratio, Working Age Population
Document

 Share of Employment across
Organized –Unorganized Sectors in
2011-12 and 2004-05 and the
difference between the two.
 What are International Financial
Institutions (IFIs) and how are they
important?
 The World Bank Group
 IMF
 Asian Development Bank
 African Development Bank
 The European Bank for
Reconstruction and Development
 CAF – Development Bank of Latin
America
 Islamic Development Bank
 European Investment Bank
 Asian Infrastructure Investment
Bank
 New Development Bank (NDB)
1) Monetary Policy  What is Monetary Policy and its  Ramesh Singh – Chapter
Test 21/01/2018 2) Urbanization objectives No.12
3 (The test would be live at 3) Migration  Monetary policy in India  PIB Website
10 am, student can also 4) Health  Census 2011
 Inflation targeting framework
take the test later as per 5) Education  RBI Website
his/her own  Monetary Policy Committee
 Monetary Policy Reports
convenience)  Relation between Money Supply, released once in two
Monetary Policy and Inflation months by RBI
 Instruments of Monetary Policy:  Economic Survey
Quantitative and Qualitative

 Types of Monetary Policy in India  Schemes and budget
 Market Stabilization Scheme (MSS) allocation in the Union
 Urbanization: What is it? Budget
 Website of Ministry of
 Important data from Census 2011
Health and Family
related to Urbanization Welfare, Ministry of
 Definition of Urban area (Statutory Human Resource
Towns and Census Towns) Development
 Urban Agglomeration and  Ministry of Housing and
Outgrowths Urban Affairs
 National Family Health
 Messy and Hidden Urbanization in
Survey (NFHS-4) Report
India  NITI Aayog Website
 Effect of Urbanization  Yojana
 What is Migration and why is it so
significant? (OR)
 Facts related to Migration
EduTap Course Material
 Various terms related to Migration
 Types of Migration covers the syllabus via:
 Constitutional Provisions related to  Concept video
migration in India  Content Sheet
 Types of Migration based on Origin  Summary Sheet
and Destination  Worksheet
 Important data related to Migration  MCQs
 ESI and Finance in News
as per the Census 2011
 Reasons for Migration (Various Document
Factors)
 Consequences of Migration
 Health Care in India
 Maternal Health Care

 Important observations of National
Family Health Survey (NFHS – 4)
 Child Healthcare
 Current status of Malnutrition in
India
 NSSO: Key Indications of Social
Consumption in India: Health Report
observations
 National Health Policy, 2017
 National Nutrition Strategy
 Health related targets in NITI
Aayog’s three-year short-term action
Action Plan
 Literacy Rates in India (Census 2011
data)
 Education related data in Socio-
Economic Caste Census (SECC), 2011
 Constitutional and legal provisions
relating to Education in India
 Apex Institutions in India
 Right to Education (RTE) Act, 2009
 Elementary Education in India
(Annual Status of Education Report,
National Achievement Survey)
 Secondary and Higher Secondary
Education in India
 Higher Education in India (All India
Survey on Higher Education)
 Global Ranking of Universities

 Adult Education
 National Education Policy of India
1) Sustainable  Sustainable development: What is  Ramesh Singh – Chapter
Test 28/01/2017 Development and it? And its three pillars No.8,19
4 (The test would be live at Environmental  United Nations Conference on  PIB Website
10 am, student can also Issues  Website of Ministry of
Environment and Development
take the test later as per 2) WTO Environment
(UNCED)
his/her own  Economic Survey
convenience)  Convention on Biological Diversity  Yojana
(CBD):
 Cartagena Protocol (OR)
 Nagoya Protocol
 The International Treaty on Plant EduTap Course Material
Genetic Resources for Food and
covers the syllabus via:
Agriculture  Concept video
 UNFCCC: United Nations Framework  Content Sheet
Convention on Climate Change:  Summary Sheet
Kyoto protocol  Worksheet
 Important Summits of UNFCCC  MCQs
 Important developments at the Paris  ESI and Finance in News
Summit
Document
 International Solar Alliance (ISA)
 India’s Intended Nationally
Determined Contributions (INDCs)
 United Nations Convention to
Combat Desertification (UNCCD)
 Montreal Protocol – Kigali
Amendment
 IPCC

 Other Important Organizations:
WWF, CITES, TRAFFIC
 India’s National Action Plan on
Climate Change
 Constitutional and Legislative
provisions related to Environment
 National Green Tribunal (NGT)
 Acts for Protecting Coastal
Environment and Wetlands
 Background of WTO
 Objectives and Functions of WTO
 Structure of WTO
 Ministerial Conference of WTO
 Important Agreements of WTO
(GATT, GATS TRIPS, AoA)
 Principles of trading system under
WTO and various exceptions
 Doha Development Agenda
 India-US Peace Clause
 Trade Facilitation Programme (TFA)
 Various Important Summits – Bali,
Nairobi, Argentina
1) Industrial and  The Importance of Industrial and  Ramesh Singh – Chapter
Test 04/02/2018 Labour Policy Labour Policy No.9,15
5 (The test would be live at 2) Gender Issues  Evolution of India’s Industrial Policies  PIB Website
10 am, student can also 3) Balance of  Census 2011
(Prior Independence, After
take the test later as per Payments (BoP)  Economic Survey
his/her own Independence upto 1991, Industrial
 Website of Ministry of
convenience) Policy of 1991) Women and Child
 Special Economic Zone (SEZ) Development and
 National Investment and Ministry of Commerce
Manufacturing Zone (NIMZ) and Industry
 National Manufacturing Policy, 2011  RBI Website
 Yojana
 Formulation of a New Industrial
Policy (OR)
 Industrial Corridors
 The Ease of Doing Business in India EduTap Course Material
(Discussion on World Bank’s Doing on these units which
Business Report) covers the syllabus via:
 Concept video
 E-Biz Project
 Content Sheet
 FDI in India  Summary Sheet
 Types of Gender Inequality  Worksheet
 How is Gender Inequality measured?  MCQs
The various indices to measure it  ESI and Finance in News
 Various Gender Issues in India Current Affairs Monthly
(Domestic Violence, Child Marriages, Document
Female Foeticide, Female
Infanticide) and the data related to
India as per Census 2011
 Data related to women in workforce
 Gender Budgeting
 Components of India’s BOP Account
(Current Account, Capital Account,
Changes in Foreign Exchange
Reserves, Errors and Emissions)
 Exchange Rate
 Rupee Convertibility (Current
Account and Capital Account
Convertibility)

 FEMA regulations
 Tarapore Committee
recommendations
 BoP crisis in India
 Economic Reforms 1991
1) Fiscal Policy  What is Fiscal Policy and its  Ramesh Singh – Chapter
Test 11/02/2018 2) Role of Economic objectives No.4,5,17,18
6 (The test would be live at Planning  Types of Fiscal Policy  Union Budget
10 am, student can also 3) Social Justice:  PIB Website
 Tools of Fiscal Policy (Components of
take the test later as per Positive  Website of Ministry of
his/her own Discrimination in earning and spending)
Social Justice and
convenience) favor of the under  Objectives of India's Fiscal Policy Empowerment
privileged  Monetary Policy or Fiscal Policy:  NITI Aayog website
Which is more effective?  Indian Polity by Laxmikant
 Union (Central Budget of India)  Yojana
 How is the Budget prepared in India?
(OR)
(Process and the budget documents)
 The Government Account EduTap Course Material
(Consolidated Fund of India, on these units which
Contingency Fund of India, Public covers the syllabus via:
Account)  Concept video
 Components of Budget in India  Content Sheet
 Summary Sheet
 What is Fiscal Consolidation?
 Worksheet
 FRBM Act
 MCQs
 Criticism of Fiscal Policy  ESI and Finance in News
 Economic Policy and its Importance Current Affairs Monthly
 The various types of Economic Document
Systems
 Types of Economic Planning

 Economic Planning in India (Before
Independence, after independence,
after 1991)
 Various plans (Bombay Plan,
Sarvodaya Plan, People’s Plan,
Gandhian Plan)
 An overview of Economic Plans in
India
 25 Core Monitorable Targets of the
12th Five Year Plan (2012-2017)
 LPG era
 NITI Aayog (its comparison with
Planning Commission, the plans put
forth by it)
 Importance of Social Justice
 Important Articles of the Indian
Constitution regarding Social Justice
 Understanding the concept of
positive discrimination and the
Constitutional Provisions relating to
it
 The concept of creamy layer
 Scheduled Caste Welfare
 Scheduled Tribes Welfare
 Backward Classes Welfare
 Minority Welfare
 Welfare of Persons with Disability
 Welfare of Senior Citizens

Test 18/02/2018 1) Social Movements  What is a social movement and its  PIB Website
7 (The test would be live at 2) Indian Political types  Indian Polity by Laxmikant
10 am, student can also System  Causes of Social Movement  EXIM Policy 2015-20
take the test later as per 3) Export-Import Policy  Websites of the
 Psychological Theories of Social
his/her own 4) Regional Economic respective institutions like
convenience) Co-operation Movements
ASEAN, SAARC, etc
 Social Theories of Social Movements  Economic Survey
 Difference between old and new
social movements (OR)
 Internal dynamics of Social
Movements EduTap Course Material
 Peasant and Farmer Movements covers the syllabus via:
 Farmer Movements in Modern India  Concept videos
 Peasant Movements in Modern India  Content Sheet
 Backward Classes Movement in India  Summary Sheet
 Environmental Movement  Worksheet
 Women Movements  MCQs
 ESI and Finance in News
 Community Rights Movements
 India’s Foreign Trade Policy Document
 Objectives of the FTP
 Governing Policy – Institutions
 History of trade Policy of India
 India’ Trade Policy Philosophy:
Theoretical Background
 Trade Policy Evolution
 FTP 2015-2020 and the mid-term
review of the Trade Policy
 Impact on the Economy
 Critical analysis of this Export Import
Policy
 Important Trade Agreements in
News
 Trans-Pacific Partnership
 Regional Comprehensive Economic
Partnership
 Transatlantic Trade and Investment
Partnership
 North American Free Trade
Agreement
 One Belt, One Road and Maritime
Silk Road
 China–Pakistan Economic Corridor
 BCIM Forum
 Bay of Bengal Initiative for Multi-
Sectoral Technical and Economic
Cooperation
 SagarMala project
 NDIA-EU FTA, The Problems
 What is Polity?
 Unitary and Federal Forms of
Government
 Presidential and Parliamentary forms
of government
 Fundamental Rights
 Directive Principles of State Policy
 Fundamental Duties
 President of India
 Prime Minister and Council of
Ministers

 Governor
 Judiciary
 Centre-State Relations
 Panchayati Raj

FOR RBI GRADE B 2018 AND NABARD GRADE A 2018 COURSES, VISIT WWW.EDUTAP.CO.IN
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[Section] Section – 1- 1 marks

Q.1) Which of the following statement(s) is/are correct with respect to the Global Human Capital
Report 2017?
1. The Global Human Capital Report is released by the World Bank.
2. India’s rank in the Global Human Capital Index 2017 is 103 out of 130 economies and thus it has
improved by 2 ranks compared to the Index released in 2016.
3. The Global Human Capital Index is constructed using six sub-indices.
4. The Index has been topped by USA.
*[a] Only 2
[b] 1,2,4
[c] Only 3
[d] 1,2
[e] 1,2,3 and 4
[Marks] 1
[Negative Marks] .25
[SOLUTION]
 The Global Human Capital Index 2017 ranks 130 countries on how well they are developing their
human capital on a scale from 0 (worst) to 100 (best).
 It is released by the Geneva headquartered World Economic Forum.
 According to the report, 62% of human capital has now been developed globally.
 Implication on a global level: The Fourth Industrial Revolution does not just disrupt employment,
it creates a shortfall of newly required skills. Therefore, we are facing a global talent crisis. We
need a new mind-set and a true revolution to adapt our educational systems to the education
needed for the future work force.
 The report measures the countries against four key areas of human capital development;
 Capacity (determined by past investment in formal education), Deployment
(accumulation of skills through work);
 Development (continued upskilling and reskilling of existing workers) and
 Know-how (specialized skills-use at work)
and five distinct age groups or generations — 0-14 years; 15-24 years; 25-54 years; 55-64 years;
and 65 years and over — to capture the full human capital potential profile of a country.
 Underlying concepts: There are four guiding concepts underlying the revised Index, forming the
basis of how indicators were chosen, how the data is treated, and the scale used.
The concepts are:
 Outcomes Vs Inputs: The Global Human Capital Index evaluates countries based on outcomes
rather than inputs or means.
 Distance to the ideal: The Index holds all countries to the same standard, measuring countries’
“distance to the ideal” state, or gap in human capital optimization.
 Human capital as a dynamic concept: The Index thus treats human capital as a dynamic rather
than fixed concept. It recognizes that human capital is not defined solely through formal

education and skilling but can be enhanced over time growing through use and depreciating
through lack of use.
 Demographics count: Whenever possible and relevant, the Index aims to take a generational
view and disaggregates indicators according to five distinct age groups, highlighting issues that
are unique or particularly crucial for the human capital development of each cohort.
 In total, the Index covers 21 unique indicators, out of which eight have been fully disaggregated
by generation, resulting in 44 distinct data points.
India’s position:
 India has been ranked at 103 in the year 2017. India was ranked 105th on this list last year, while
Finland was on the top.
 The index is led by Scandinavian nations Norway, Finland and Switzerland, followed by large
economies such as the US and Germany.
 In South Asia, the race is led by Sri Lanka at rank 70 and Nepal at 98, while India has only a
quantum of solace – that it performs slightly better than Bangladesh (111) and Pakistan (125).
 India has been placed at a low 103 rank, the lowest among BRICS economies (Brazil, Russia, India,
China and South Africa).

Detailed scores of India in various sub-indices:
 India is held back by a number of factors, including low educational attainment (primary
education attainment among 25 -54-year olds is 110th for example) and low deployment of its
human capital, meaning the skills available are not getting put to good use.
 India ranks 118 for labour force participation among the key 35-54 year old demographic,
suggesting far too many Indians are engaged in informal or subsistent employment.
 However there is a modern India rising. When it comes to development of skills needed for the
future, the country fares strongly, ranking 65 out of 130.
 The country also performed well in the know-how parameter that measures the use of
specialised skills at work.
Directions to the Students:
These are factual questions and the data will get updated. It is very important to keep a check on the
updated data and students should memorize the data which is recent.
For example, the GDP Growth estimates released by the major International Financial Institutions and
the ranking of India in important indices released by major agencies.
EduTap would be covering the updates as part of its ESI and Finance in news monthly Current Affairs
documents.
Q.2) Which of the following statements is/are incorrect with regard to the Human Development
Index released as part of the Human Development Report 2016 released in March 2017?
[a] The Human Development Index covers three dimensions of Health, Education and Living
Standards.
*[b] The three dimensions cover four indicators: Life Expectancy at Birth, Adult Literacy Rates,
Expected Years of Schooling and Gross National Income per Capita.
[c] India was placed at 131st position among 188 countries with a score of 0.624.

[d] India has been placed in the group of ‘medium’ human development countries.
[e] None of the above
[Marks] 1
[SOLUTION]
Statement 2 is incorrect as the four dimensions are as follows:
Before 2011, the human development index used adult literacy rates rather than mean years of
schooling.
More about the Report and the HDI Index:
 The 2016 Human Development Report by the United Nations Development Programme was
released on March 21, 2017, and calculates HDI values based on estimates for 2015.
 The report is titled: Human Development for Everyone.
 The 2016 Report retains all the composite indices from the family of human development
indices—the HDI, the Inequality-adjusted Human Development Index (IHDI), the Gender
Development Index (GDI), the Gender Inequality Index (GII) and the Multidimensional Poverty
Index (MPI).
 HDI is a composite statistic of life expectancy, education, and per capita income indicators,
which are used to rank countries into four tiers of human development. Countries are ranked
based on scale ranging between 0 (low) to 1 (high).
 HDI is a composite statistic of life expectancy, education, and per capita income indicators,
which are used to rank countries into four tiers of human development.
 Countries fall into four broad human development categories: Very High Human Development,
High Human Development, Medium Human Development and Low Human Development.
India related facts:

 India’s rank: India has been placed at 131st position among 188 countries with a score of 0.624.
 It has been placed in the group of ‘medium’ human development countries.
 India’s HDI value increased from 0.428 in 1990 to 0.624 in 2015. However, its average annual
growth in HDI (1990-2015) was higher than that of other medium HDI countries.
 In 2015 HDI, India ranked 130 with score of 0.609 and was placed in the medium human
development category.
 Life expectancy at birth: In India, it has increased from 68 years (2015 HDI) to an average of 68.3
years — 69.9 years for women and 66.9 years for men.
 Access to knowledge: India’s expected years of schooling remains at 11.7 years, while mean
years of schooling increased from 5.4 (2015 HDI) to 6.3 years.
 India’s Gross National Income (GNI) based on per capita purchasing power parity (PPP). It has
risen from $5,497 (2015 HDI) to $5,663.

documents.
Q.3) India’s value of Human Development Index (HDI) as per the Human Development Report 2016
is 0.624. After being adjusted for inequalities in the three basic dimensions of HDI i.e. health,
education and income the value of IHDI or that is the Inequality Adjusted HDI (IHDI) of India comes
out to be?
[a] remains the same as HDI
[b] 0.598
*[c] 0.455
[d] 0.678
[e] 0.669
[Marks] 1
[SOLUTION]
 The HDI represents a national average of human development achievements in the three basic
dimensions making up the HDI: health, education and income.
 Like all averages, it conceals disparities in human development across the population within
the same country. Two countries with different distributions of achievements can still have the
same average HDI value.
 The IHDI takes into account not only the average achievements of a country on health, education
and income, but also how those achievements are distributed among its population by
“discounting” each dimension’s average value according to its level of inequality.

 An IHDI value can be interpreted as the level of human development when inequality is
accounted for.
 The relative difference between IHDI and HDI values is the loss due to inequality in distribution
of the HDI within the country.
 India’s HDI was pegged at 0.624, but its value falls 27.2% after being adjusted for inequalities,
resulting in a HDI value of 0.455.

These are factual questions and the data will get updated. It is very important to keep a check on
the updated data and students should memorize the data which is recent.
documents.
Q.4) GDP and GNP, both represent the total market value of all final goods and services produced
usually within a year, then which of the following is correct regarding the difference between GDP
and GNP?
*[a] GDP takes into account the total market value of all final goods and services produced within the
territory of a country irrespective of their nationality whereas GNP takes into account the total market
value of all final goods and services produced by the nationals of a country irrespective of their
territory.
[b] GNP takes into account the total market value of all final goods and services produced within the
territory of a country irrespective of their nationality whereas GDP takes into account the total market
value of all final goods and services produced by the nationals of a country irrespective of their
territory.
[c] There is no difference between the two, these are just terms that can be used interchangeably.
[d] GDP – Depreciation = GNP
[Marks] 1
[SOLUTION]
 Gross Domestic Product (GDP): It is defined as the total market value of all final goods and
services produced within the country in a given period of time - usually a year.
 In calculating GDP, we are not taking into account the income earned by citizens of India working
abroad.
 So, we need to find a way to take into account the earnings made by Indians abroad or by the
factors of production owned by Indians.
 Also we must deduct the earnings of the foreigners who are working within our domestic
economy or the payments to the factors of production owned by the foreigners.
 To calculate this GNP is used.

 GNP = GDP + Net Factor Income from Abroad

(Net factor income from abroad = Factor income earned by the domestic factors of production
employed in the rest of the world – Factor income earned by the factors of production of the rest
of the world employed in the domestic economy).
 And GDP – depreciation will give us Net Domestic Product.
These are Concept based questions.
Usually, in the ESI paper of Phase 2, emphasis is given on Current Affairs, but it is very important to be
clear with the concepts in order to appreciate and retain the facts in mind.
Q.5) According to the estimates of CSO, Ministry of Statistics and Programme Implementation, the
GDP growth rate (at constant prices) of India in the Q2 (July – September) 2017 is?
[a] 5.9 %
*[b] 6.3%
[c] 5.2%
[d] 6.9%
[Marks] 1
[SOLUTION]
Economic growth is an increase in the capacity of an economy to produce goods and services, compared
from one period of time to another.
documents.
Q.6) Consider the following. There is a country X and that country has high flow of incoming foreign
investment (FDI) and low level of outbound FDI. Then which of the following statements is most
likely to be true for country X?
*[a] Its GDP is likely to be larger than GNP
[b] Its GNP is likely to be larger than GDP
[c] Its GDP will be equal to GNP
[d] The given statement has no effects on both the GDP and GNP
[Marks] 1
[SOLUTION]
Let us consider two types of economy:
Open Economy: If it is an open economy with great levels of foreign investment (FDI) and lesser levels
of outbound FDI, its GDP is likely to be larger than GNP.
Closed Economy: If it is a closed economy where nobody leaves its shores, nobody invests abroad,
nobody comes in and nobody invests in the country, its GDP will be equal to GNP.
Q.7) The Base Year, the year against which the economic growth is measured has been revised by
the Ministry of Statistics and Programme Implementation from 2004-05 to?
[a] 2010-11
*[b] 2011-12
[c] 2012-13
[d] 2009-10
[e] 2013-14
[Marks] 1
[SOLUTION]
Characteristics of a Base Year:
 A base year has to be a normal year without large fluctuations in production, trade and prices of
commodities in general.
 Reliable price data should be available for it.
 It should be as recent as possible.
 For example if we take a year which had a severe drought, in that year the agriculture produce
would have been very less and thus the prices would have been very high. So, taking this year as
a base year would not be appropriate as this year was a one-off case because of the occurrence
of drought.

documents.
Q.8) Which of the following is the GDP Growth forecast for the year 2017-18 for India given by the
World Bank?
*[a] 7%
[b] 7.1%

[c] 7.2%
[d] 6.8%
[e] 5.9%
[Marks] 1
[SOLUTION]
 The World Bank has reduced its India GDP growth forecast to 7% for 2017-18 from 7.2%, blaming
disruptions caused by demonetisation and GST.
 The World Bank has said that the unexpected slowdown in India’s growth story is because of
the delayed consequence of demonetization, sharp decline in the growth rate of public
expenditures and uncertainty created by the introduction of GST.
 In the June quarter of 2017-18, the Indian economy decelerated to 5.7% and bounced back to
6.3% in the Q2 (July-September) of 2017-18.

documents.
Q.9) Which of the following Agencies/Ministries/Bodies releases the Consumer Price Index (CPI)?
[a] Ministry of Finance
[b] Office of the Economic Adviser, Ministry of Commerce and Industry
*[c] CSO, Ministry of Statistics and Programme Implementation
[d] NITI Aayog
[e] RBI
[Marks] 1
[SOLUTION]
 CPI (rural, urban, combined) is released by the Central Statistics Office (CSO) in the Ministry of
Statistics and Programme Implementation.
 In India, RBI uses CPI (combined) released by CSO for inflation targeting purpose.
 Base Year: Base year for CPI (Rural, Urban, Combined) is 2011-12.
 The number of items in CPI basket include 448 in rural and 460 in urban.
 The items in CPI are divided into 6 main groups as follows:


These are factual questions and the students should memorize them.
Q.10) The Gender Development Index (GDI) measures gender gaps in human development
achievements by accounting for disparities between women and men in three basic dimensions of
human development—health, knowledge and living standards using the same component
indicators as in the HDI. As per the Human Development Report 2016, the value of India’s GDI is?
*[a] 0.819
[b] 0.765
[c] 0.624
[d] 0.455
[e] 0.614
[Marks] 1
[SOLUTION]
The value of India’s GDI is 0.819, which is behind the developing country’s average of 0.913.
About GDI:
 The GDI is the ratio of the HDIs calculated separately for females and males using the same
methodology as in the HDI.
 The closer the ratio is to 1, the smaller the gap between women and men.
 The GDI shows how much women are lagging behind their male counterparts and how much
women need to catch up within each dimension of human development.

documents.
Q.11) How can the GDP Deflator be calculated?

*[a] It is the ratio of Nominal GDP to Real GDP
[b] It is the ratio of Real GDP to Nominal GDP
[c] It is the ratio of GDP to GNP
[d] It is the ratio of GDP to Inflation

[Marks] 1
[SOLUTION]
 The ratio of nominal GDP to real GDP gives us an idea of how the prices have moved from the
base year (the year whose prices are being used to calculate the real GDP) to the current year.
 In the calculation of real and nominal GDP of the current year, the volume of production is fixed.
 Therefore, if these measures differ it is only due to change in the price level between the base
year and the current year.
 The ratio of nominal to real GDP i.e the GDP Deflator is a well-known index of prices.
Q.12) Gender inequality remains a major impediment to Human Development. The Gender
Inequality Index (GII) which is released as part of the Human Development Report measures gender
inequalities in three important aspects of human development. What are these three dimensions?
[a] Health, Education and Standard of Living
[b] Health, Education and Labour Market
[c] Health, Empowerment and Standard of Living
*[d] Health, Empowerment and Labour Market
[e] Empowerment, Education and Empowerment
[Marks] 1
[SOLUTION]
 The 2010 HDR introduced the GII, which reflects gender-based inequalities in three dimensions
– reproductive health, empowerment, and economic activity.
 Reproductive health is measured by maternal mortality and adolescent birth rates;
 Empowerment is measured by the share of parliamentary seats held by women and attainment
in secondary and higher education by each gender and
 Economic activity is measured by the labour market participation rate for women and men.
 The GII can be interpreted as the loss in human development due to inequality between female
and male achievements in the three GII dimensions.


Q.13) India has a rank of 125 out of 159 countries in the 2015 Gender Inequality Index (GII) which
was released as part of the Human Development Report 2016 which came out in the year 2017.
What is the value of India’s GII?
[a] 0.491
[b] 0.615
[c] 0.546
[d] 0.520
*[e] 0.530
[Marks] 1
[SOLUTION]
Some more data related to women in India:
 In India, 12.2 percent of parliamentary seats are held by women, and 35.3 percent of adult
women have reached at least a secondary level of education compared to 61.4 percent of their
male counterparts.
 For every 100,000 live births, 174 women die from pregnancy related causes; and the adolescent
birth rate is 24.5 births per 1,000 women of ages 15-19.
 Female participation in the labour market is 26.8 percent compared to 79.1 for men.
documents.

Q.14) When we say that there is a systematic reduction of the recorded cost of a fixed asset like
buildings, furniture, office equipment, vehicles, what is the concept that we are referring to?
[a] Appreciation
[b] Reduction
*[c] Depreciation
[d] Losses
[Marks] 1
[SOLUTION]
 Depreciation: The capital gets consumed during the year due to wear and tear. This wear and
tear is called depreciation.
 E.g. We buy a new car for Rs.5,00,000. As the years pass by, the car gets used and needs
maintenance. So after say for 5 years, the value of the car does not remain the same.
Q.15) The payments made by the government to individuals for which there is no economic activity
in return by these individuals like pensions, scholarships etc are known as?
[a] Personal Income
[b] Disposable Personal Income
*[c] Transfer Payments
[d] Gifts
[e] Undistributed profits
[Marks] 1
[SOLUTION]
These transfer payments are not included while accounting the National Income of a country.
Q.16) When we say that a person has more money in his hand to save or to consume when
compared to the previous year for example, then there is a definite increase in which of the
following?
[a] Personal Income of that person
*[b] Personal Disposable Income of that person
[c] Taxes levied by the government
[d] Taxes paid by that person
[e] Cannot be said
[Marks] 1
[SOLUTION]
Let us see how the Personal Disposable Income is calculated:
Personal Income (PI) ≡ National Income – Undistributed profits – Net interest payments made by
households – Corporate tax + Transfer payments to the households from the government and firms.
 Now, this Personal Income is not the income over which the households have complete say.
 They have to pay taxes from PI. If we deduct the Personal Tax Payments (income tax, for
example) and Non-tax Payments (such as fines) from PI, we obtain what is known as the Personal
Disposable Income.
 Personal Disposable Income is the part of the aggregate income which belongs to the
households. They may decide to consume a part of it, and save the rest.
Personal Disposable Income (PDI) ≡ PI – Personal tax payments – Non-tax
payments.
 So, in the given question, if we say that a person has more money to spend or consume when
compared to last year, it means that his/her Personal Disposable Income has increased.
Q.17) The World Happiness Report is published by which of the following agencies/organizations?
[a] UNDP
*[b] UN Sustainable Development Solutions Network
[c] IMF
[d] WEF
[e] World Bank
[Marks] 1
[SOLUTION]
 World Happiness Report is published by the UN Sustainable Development Solutions Network on
the eve of International Day of Happiness (20 March).
 It ranks the countries based on factors such as inequality, life expectancy, GDP per capita, public
trust (i.e. a lack of corruption in government and business), and social support.
 Together they are used to generate a happiness score of country on a scale from 1 to 10.

Q.18) Which of the following is/are not one of the limitations of the Human Development Index
released by the UNDP?
[a] HDI is not a comprehensive measure of human development as it does not take into account the
other dimensions of human development like access to clean drinking water, sanitation coverage.
[b] The HDI is an average measure and thus masks a series of disparities and inequalities within
countries.
[c] HDI is composed of long-term human development outcomes like life expectancy is a long-term
outcome and thus it does not capture the short-term achievements of human developments.
*[d] HDI is computed using arithmetic mean and thus a low achievement in one dimension is
compensated for by high achievement in another dimension.
[Marks] 1
[SOLUTION]
The statement (d) is incorrect as:
 In 2010, the geometric mean was introduced to compute the HDI.
 Poor performance in any dimension is directly reflected in the geometric mean.
 That is to say, a low achievement in one dimension is not anymore linearly compensated for by
high achievement in another dimension.
 The geometric mean reduces the level of substitutability between dimensions and at the same
time ensures that a 1 percent decline in index of, say, life expectancy has the same impact on the
HDI as a 1 percent decline in education or income index.
 Thus, as a basis for comparisons of achievements, this method is also more respectful of the
intrinsic differences across the dimensions than a simple average.
All the other given statements are limitations of HDI.

Q.19) Consider two countries: X and Y. If a product costs $25 in country X and a similar product in
country Y costs $50, then what can be said regarding the purchasing power of people of both the
countries?
(We have converted the price of the products into dollars in both the countries for comparison)
[a] The purchasing power of people belonging to country Y is more than that of the people belonging
to country X.
*[b] The purchasing power of people belonging to country X is more than that of the people belonging
to country Y.
[c] The purchasing power of the people of both the countries is the same.
[d] The purchasing power of the people of country X and Y cannot be compared.
[Marks] 1
[SOLUTION]

 To buy a similar kind of product, the people of country Y should pay more when compared to
people of country X.
 Thus this gives us an indication that the purchasing power of people of country X is more than
that of people belonging to country Y.
 We can also conclude that the cost of living is high in country Y when compared to that of
country X.
Q.20) Which of the following is the correct relation between the Basic Price and Factor Cost of a
product?
*[a] Factor Cost + Production Taxes – Production Subsidy = Basic Price
[b] Factor Cost – Production Taxes + Production Subsidy = Basic Price
[c] Factor Cost + Product Tax – Product Subsidy = Basic Price
[d] Factor Cost – Product Tax + Product Subsidy = Basic Price
[e] Factor Cost + Product Tax + Production Tax – Product Subsidy – Production Subsidy = Basic Price
[Marks] 1
[SOLUTION]
 Factor costs are the actual production costs at which goods and services are produced by firms
and industries in an economy. The price at which a product comes out of the factory gate of a
company is known as the Factor cost of the product.
 When the production taxes are added and the production subsidies subtracted from the factor
cost, we get the Basic Price.
 Production Taxes: Land revenues, stamps fees, registration fees tax on the profession etc. These
are levied on the product irrespective of the volume of production.
 Production Subsidies: Subsidies to Railways, input subsidies to farmers, subsidies to the village
and small industries, administrative subsidies to corporations or cooperatives, etc.
Q.21) Which of the prices comes into play during the billing process, where the indirect taxes levied
by the government are added and this is the final cost the consumer has to pay for the product and
the subsidies are subtracted because it reduces the cost of production and thus the consumer has
to pay less?
[a] Factor Cost
[b] Basic Price
*[c] Market Prices
[d] Current Prices

[Marks] 1
[SOLUTION]
Market Price:
 It refers to the actual transacted price and thus includes the indirect taxes which a government
levies.
 Thus there are two changes we make to the factor cost to arrive at the Market Price.
 We need to add the indirect taxes and subtract the subsidies given by the government.
 Once a product is produced and it leaves the factory gate, Market Price comes into play during
the billing process.
 So, Market Price = Factor Cost + Indirect Taxes – Subsidies

Q.22) A country wants to know whether the quantity of goods produced in that country in a year
has increased when compared to the previous year. Which of the following would give an idea
regarding the same?
*[a] Real GDP
[b] Nominal GDP
[c] GDP Deflator
[d] Purchasing Power Parity
[Marks] 1
[SOLUTION]
GDP can be calculated at:
a. Current prices (Nominal GDP)
b. Constant prices (Real GDP)
Nominal GDP: Nominal GDP refers to the current year production of final goods and services valued at
current year prices.
Real GDP: If this measure is adjusted for inflation; it is expressed in real terms.
 Real GDP refers to the current year production of goods and services valued at base year prices.
Base year prices are constant prices.
Now let us understand how can a country find out whether the production of goods has increased in
a year compared to the previous year.
 There is a country where only shirts are produced (very hypothetical example).
 The base year is 2011-12. Now the cost of one shirt in the base year is Rs.100.
 Year 2016: 20 shirts are produced. The rate of one shirt in that year is Rs.300.
 For finding the Real GDP, we shall use the constant prices (Base year prices). So, the real GDP will
be: 20*100 = Rs.2000.
 Now, year 2017: 30 shirts are produced. The rate of one shirt is Rs.500.
 The Real GDP will be 30*100 = Rs.3000.
 Now, when we see the Real GDP of the year 2016 and 2017, we see that the real GDP is more
in the year in 2017 and hence the production has increased.
 Now, analyse, if we use Nominal GDP, the current prices of each year is to calculate GDP and
thus it does not show the actual increase or decrease in the quantity of goods produced. It also
includes the effect of rise in prices.
 GDP Deflator on the other hand, is the ratio between the Nominal GDP and the Real GDP and
shows the increase in prices.
 The Purchasing Power Parity does not give an indication of the quantity of goods produced in a
country.
Q.23) Which of the following statement(s) is/are incorrect regarding constant prices and current
prices?
[a] Constant prices are the base year prices and the current prices refer to the prices of the year in
question
*[b] To calculate the Nominal GDP, constant prices are used and to calculate the Real GDP, current
prices are used.
[c] It is better to measure growth at constant prices rather than current prices because measurement
at Constant Prices cancels the effect of Inflation (Price Rise).
[d] None of the above
[e] All of the above
[Marks] 1
[SOLUTION]
To calculate the Nominal GDP, Current Prices are used and to measure the Real GDP, constant prices are
used.
All the other statements are true.

Q.24) The concept of Human Development was developed by which of the following economists?
[a] Amartya Sen
[b] John Maynard Keynes
*[c] Mahbub ul Haq
[d] Prasanna Chandra Mahalanobis
[Marks] 1
[SOLUTION]
 The human development concept was developed by economist Mahbub ul Haq.
 At the World Bank in the 1970s, and later as minister of finance in his own country, Pakistan, Dr.
Haq argued that existing measures of human progress failed to account for the true purpose of
development—to improve people’s lives.
 In particular, he believed that the commonly used measure of Gross Domestic Product failed to
adequately measure well-being.
 Working with Nobel Laureate Amartya Sen and other gifted economists, in 1990 Dr. Haq
published the first Human Development Report, which was commissioned by the United
Nations Development Programme.

Q.25) Which of the following statement(s) is/are correct regarding ‘Gini Coefficient’?
[a] Gini coefficient is a way of comparing how distribution of income in a society compares with a
similar society in which everyone earned exactly the same amount, thus it is an index to measure
inequality.
[b] Inequality on the Gini scale is measured between 0, where everybody is equal, and 1, where all the
country's income is earned by a single person.
[c] The higher is the Gini Coefficient, more is gap between rich and poor in a country
[d] India’s Gini coefficient stood at 0.352 in 2016 Human Development Report.
*[e] All the above
[Marks] 1
[SOLUTION]
If the Gini-coefficient of a country falls, it indicates that there is a decrease in the level of inequality in
that country.
Q.26) Which of the following resources are NOT Factors of Production?

[a] Land
[b] Entrepreneurship
[c] Labour
[d] Capital
*[e] Wages
[Marks] 1
[SOLUTION]
Wages is the Factor Income which is derived from the Factors of Production.
Factors of Production:
The factors of production are resources that are the building blocks of the economy; they are what
people use to produce goods and services. Economists divide the factors of production into four
categories: land, labor, capital, and entrepreneurship.
Factor Income:
Factor income is income received from the factors of production – land, labor, and capital. Factor
income on the use of land is called rent, income generated from labor is called wages and income
generated from capital is called profit.

Q.27) India’s Human Development Index (HDI) value has been increasing over the years and has
seen an increase of how many percentage points between 1990 and 2015?
*[a] 46%
[b] 56%
[c] 20%
[d] 61%
[e] 17%
[Marks] 1
[SOLUTION]

An increase in HDI value is seen as a positive sign for India.

documents.
Q.28) Which of the following statements is incorrect regarding the Wholesale Price Index (WPI)?
1. It is released by the Central Statistical Office, Ministry of Programme and Implementation.
2. The base year for WPI is 2004-05.
3. WPI is used for Inflation targeting by the Reserve Bank of India.
4. The total number of items covered by the WPI is 676.
[a] 1, 2 and 3
[b] 2 and 3
[c] 1 and 4
[d] 2 and 4
*[e] All the above
[Marks] 1
[SOLUTION]
 Wholesale Price Index (WPI) is computed by the Office of the Economic Adviser in Ministry of
commerce & Industry, Government of India.
 It was earlier released on weekly basis for Primary Articles and Fuel Group. However, since 2012,
this practice has been discontinued. Currently, WPI is released monthly.
 The current base year for WPI is 2011-12 (earlier it was 2004-05).
 Number of Items: Earlier, there were 676 items in WPI.
 The number of items covered in the new series of the WPI has increased from 676 to 697. Overall,
199 new items have been added and 146 old items have been dropped.

 These items are divided into three broad categories: (1) Primary Articles (2) Fuel & power and
(3) Manufactured Products. It does not include services.
 Under the new series of WPI, weight of manufactured items has decreased to 64.2 per cent from
64.9 per cent in old series. Similarly, the weight of fuel and power has decreased to 13.1 per cent
from 14.9 per cent. On the other hand, the weight of primary items has increased to 22.6 per
cent from 20.1 percent.

Q.29) There are three methods using which the National Income of a nation can be calculated. While
using the Output/Value Added/Product method to calculate the National Income, which of the
following are the precautions that should be taken?
1. Sale and Purchase of Second hand goods should not be included.
2. The value of Intermediate goods should be taken into account.
3. The value of goods produced for self-consumption should be included.
4. Domestic services and voluntary work done are to be excluded (exception: domestic services
produced by paid employees)
[a] 1, 2, 3
[b] 2, 3, 4
*[c] 1, 3 ,4
[d] 1 and 4
[e] 1, 2, 3, 4
[Marks] 1
[SOLUTION]
Statement 1: Sale and purchase of second hand goods should not be included as the second-hand goods
purchased/sold in current year have already been counted in the year in which they were produced.
However, commission earning, if any, of brokers involved with such goods, should be included.
Statement 2: Only the value of final goods should be counted while calculating national income. The
value of intermediate goods should be ignored. This is important so as to avoid double counting.
Statement 3: The value of goods produced for self-consumption should be included.
Statement 4: Domestic services and voluntary work done are to be excluded. However an exception is
made in case of domestic services produced by paid employees.

Q.30) Few statements have been provided. Which of these does not use the approach of Human
Development?
[a] Economic Growth automatically leads to the improvement in the quality of life of individuals.
[b] It is important to educate girls, but it is not safe for them to acquire a job. So, it is advisable not to
consider them for jobs, especially for ones which requires them to relocate.
[c] The government has instructed its citizens to pursue higher education only in the field of Science.
*[d] All the above
[Marks] 1
[SOLUTION]
Human Development approach focuses on People, Opportunities and Choices.
Let us understand this in the light of the statements given above:
Statement 1: The human development approach focuses on improving the lives people lead rather than
assuming that economic growth will lead, automatically, to greater opportunities for all. Income growth
is an important means to development, rather than an end in itself.
Statement 2: Opportunities: Human Development is about giving people more freedom and
opportunities to live lives they value. In effect this means developing people’s abilities and giving them
a chance to use them.
In the given statement, we can see that girls are provided with education but denied the opportunity to
work. Here we are restricting the girls from making use of their abilities.
Statement 3: Choices: Human development is, fundamentally, about more choice. It is about providing
people with opportunities, not insisting that they make use of them.
No one can guarantee human happiness, and the choices people make are their own concern.
The process of development – human development - should at least create an environment for people,
individually and collectively, to develop to their full potential and to have a reasonable chance of leading
productive and creative lives that they value.
In the given statement, the government is not letting its citizens pursue their field of choice. Here again
we see that an environment which allows a person to utilize its potential to the fullest is missing.

Q.31) Which of the following statement(s) is/are correct regarding capital goods?

1. These are final goods and not the intermediate goods.

2. They themselves do not get transformed in the production process.
3. Over a period of time, the monetary value of most of the capital goods gets increased.
4. Capital goods are one of the factors of production.
[a] 1, 2, 3
[b] 2, 3, 4
*[c] 1, 2, 4
[d] 1 and 3
[e] 1, 2, 3, 4
[Marks] 1
[SOLUTION]
 Capital goods are tangible assets such as buildings, machinery, equipment, vehicles and tools
that an organization uses to produce goods or services in order to produce consumer goods and
goods for other businesses.
 Manufacturers of automobiles, aircraft, and machinery fall within the capital goods
sector because their products are used by companies involved in manufacturing, shipping and
providing other services.
 Statement 3 is incorrect as during the course of time, the value of the capital goods gets
decreased.
 This concept is known as depreciation.
 Depreciation: The capital gets consumed during the year due to wear and tear. This wear and
tear is called depreciation. E.g. We buy a new car for Rs.5, 00,000. As the years pass by, the car
gets used and needs maintenance. So after say for 5 years, the value of the car does not remain
the same.
 The other factors of production are Land, Labour and Entrepreneurship.
Q.32) Which of the following statements regarding ‘Growth’ and ‘Development’ is/are incorrect?
[a] ‘Growth’ refers to the increase or decrease in quantity whereas ‘Development’ is a qualitative
concept.
[b] Growth can be negative whereas Development cannot.
*[c] Growth is always accompanied by Development.
[d] Development can be said as a Growth in positive direction.
[Marks] 1
[SOLUTION]

 The statement given in option [c] is incorrect as it is not necessary that development would
always accompany growth.
Now let us understand this with a hypothetical example:
 There is a city X, which has a population of 2,00,000 in the year 2016.

 Now, in the same city, in the next year, the number has increased to 3,00,000.
 But with the increase in population, we don’t see an increase in the infrastructural facilities.
 Here we see that growth in the number of people has taken place but without any
development.
Q.33) Which of the following states in India become the first in India to start a separate 'Happiness
Department' in July, 2016?
[a] Andhra Pradesh
[b] Uttar Pradesh
*[c] Madhya Pradesh
[d] Orissa
[e] Tamil Nadu
[Marks] 1
[SOLUTION]
Andhra Pradesh is the second state in the country after Madhya Pradesh to start a Happiness Index
Department.
Q.34) When was the Human Development Report first published?

[a] 2012
[b] 2010
*[c] 1990
[d] 1992
[e] 1996
[Marks] 1
[SOLUTION]
 The Human Development Report (HDR) is an annual milestone published by the Human
Development Report Office of the United Nations Development Programme (UNDP).
 The only year without a Human Development Report since 1990 was 2012. The latest report was
launched on 21 March 2017.


Q.35) When was the Gender Inequality Index (GII) introduced?

*[a] 2010
[b] 2011
[c] 2013
[d] 2014
[Marks] 1
[SOLUTION]
The GII is an inequality index. It measures gender inequalities in three important aspects of human
development—reproductive health, measured by maternal mortality ratio and adolescent birth rates;
empowerment, measured by proportion of parliamentary seats occupied by females and proportion of
adult females and males aged 25 years and older with at least some secondary education; and economic
status, expressed as labour market participation and measured by labour force participation rate of
female and male populations aged 15 years and older.

[Section] Section – 2- 2 marks (based on passage)

I.1) The global upswing in economic activity is strengthening, with global growth projected to rise to
3.6 percent in 2017 and 3.7 percent in 2018. Broad-based upward revisions in the euro area, Japan,
emerging Asia, emerging Europe, and Russia more than offset downward revisions for the United
States and the United Kingdom. But the recovery is not complete: while the baseline outlook is
strengthening, growth remains weak in many countries, and inflation is below target in most
advanced economies. Commodity exporters, especially of fuel, are particularly hard hit as their
adjustment to a sharp stepdown in foreign earnings continues. And while short-term risks are broadly
balanced, medium-term risks are still tilted to the downside. For policymakers, the welcome cyclical
pickup in global activity provides an ideal window of opportunity to tackle key challenges—namely to
boost potential output while ensuring its benefits are broadly shared, and to build resilience against
downside risks.
Q.1) The given passage is the introduction of the World Economic Outlook Report released in
October 2017. Which of the following organizations releases this report?
[a] World Bank
*[b] International Monetary Fund (IMF)
[c] Asian Development Bank (ADB)
[d] Asian Infrastructure and Investment Bank (AIIB)

[e] OECD
[Marks] 2
[Negative Marks] .5
[SOLUTION]
 The World Economic Outlook (WEO) is a survey conducted and published by the International
Monetary Fund.
 It is published biannually and partly updated two times a year. It portrays the world economy in
the near and medium context, with projections for up to four years into the future.
 WEO forecasts include key macroeconomic indicators, such as GDP, inflation, current
account and fiscal balance of more than 180 countries around the globe. It also deals with
major economic policy issues.
Q.2) The IMF is headquartered in?

[a] New York, USA
*[b] Washington DC, USA
[c] Geneva, Switzerland
[d] Vienna, Austria
[e] Paris, France
[Marks] 2
[Negative Marks] .5
[SOLUTION]
The International Monetary Fund (IMF) is an international organization headquartered in Washington,
D.C., of "189 countries working to foster global monetary cooperation, secure financial stability,
facilitate international trade, promote high employment and sustainable economic growth, and reduce
poverty around the world.
The IMF stabilizes the global economy in three ways.

 First, it monitors global conditions and identifies risks.
 Second, it advises its members on how to improve their economies.
 Third, it provides technical assistance and short-term loans to prevent financial crises.
The IMF's goal is to prevent these disasters by guiding its members.

Q.3) Which of the following factors contribute to the upswing in the economic growth of a country?
1. Rise in the productive capacity of an economy along with an increase in the aggregate demand.
2. Availability of skilled workforce in the country.
3. A decreasing consumer and business confidence.
4. Technological development helping in increasing productivity with the limited amount of resources.

[a] 1, 2, 3
*[b] 1, 2, 4
[c] 2, 3, 4
[d] 1, 3, 4
[e] 1, 2, 3, 4
[Marks] 2
[Negative Marks] .5
[SOLUTION]
 The term economic growth is associated with economic progress and advancement.
 Economic growth can be defined as an increase in the capacity of an economy to produce goods
and services within a specific period of time.
 In economics, economic growth refers to a long-term expansion in the productive potential of
the economy to satisfy the wants of individuals in the society.
Statement 1:
 Thus a rise in the productive capacity of an economy along with an increase in the aggregate
demand results an increase in the economic growth of a country.
 Sustained economic growth of a country’ has a positive impact on the national income and level
of employment, which further results in higher living standards.
Statement 2:
 Human Resources refers to one of the most important determinant of economic growth of a
country.
 The quality and quantity of available human resource can directly affect the growth of an
economy.
Statement 3:
 A decreasing consumer confidence is not good for an economy.
 Consumer and business confidence is very important for determining economic growth.
 If consumers are confident about the future they will be encouraged to borrow and spend.
 If they are pessimistic they will save and reduce spending.
Statement 4:
 Countries that have worked in the field of technological development grow rapidly as compared
to countries that have less focus on technological development.
 The selection of right technology also plays an important role in the growth of an economy.
 On the contrary, an inappropriate technology- results in high cost of production.

Q.4) As per the World Economic Outlook report for October 2017 released by the IMF, India would
grow at what percent in the year 2017-18?
*[a] 6.7%
[b] 7.2%
[c] 7.5%
[d] 5.9%
[e] 6.2%
[Marks] 2
[Negative Marks] .5
[SOLUTION]
 In its April and July reports, the IMF had predicted that India would grow at 7.2% in 2017-’18.
 The international organisation also reduced India’s projected GDP growth rate for 2018-’19 from
7.7% to 7.4%.
documents.
I.2) The 2010 HDR introduced the MPI, which identifies multiple overlapping deprivations suffered by
households in 3 dimensions: education, health and living standards. The MPI is calculated for 102
developing countries in the 2015 HDR.
The most recent survey data that were publicly available for India’s MPI estimation refer to
2005/2006. In India, 55.3 percent of the population (642,391 thousand people) are multidimensionally
poor while an additional 18.2 percent live near multidimensional poverty (212,018 thousand people).
The breadth of deprivation (intensity) in India, which is the average deprivation score experienced by
people in multidimensional poverty, is 51.1 percent.
Q.5) The standard of living dimension in the calculation of the MPI is based on how many indicators?
[a] Four
*[b] Six
[c] Ten
[d] Two
[e] Five
[Marks] 2
[Negative Marks] .5
[SOLUTION]
The education and health dimensions are each based on two indicators, while standard of living is
based on six indicators.


Q.6) The indicators that are needed to measure the MPI are weighted to create a deprivation score,
and the deprivation scores are computed for each household in the survey. A deprivation score of
at least what percent is used to distinguish between the poor and non poor?
[a] 50%
*[b] 33%
[c] 25%
[d] 75%
[e] 13.33%
[Marks] 2
[Negative Marks] .5
[SOLUTION]
A deprivation score of 33.3 percent (one-third of the weighted indicators) is used to distinguish between
the poor and nonpoor. It means that a household is suffering deprivation in at least 33% or more of the
weighted indicators.
Q.7) In the calculation of the MPI, the households with a deprivation score greater than or equal to
20 percent but less than 33.3 percent live near multidimensional poverty and the households with
a deprivation score greater than or equal to what percent are said to live in severe multidimensional
poverty?
[a] 75%
*[b] 50%
[c] 66.6%
[d] 72.5%
[e] There is no such concept
[Marks] 2
[Negative Marks] .5
[SOLUTION]
These categorizations help the policy makers in getting acquainted with the ground reality.
Q.8) The MPI value of India as per the Human Development Report 2016, which is the share of the
population that is multidimensionally poor, adjusted by the intensity of the deprivations is?
[a] 0.188
*[b] 0.282
[c] 0.237
[d] 0.245
[e] 0.167
[Marks] 2
[Negative Marks] .5
[SOLUTION]

documents.
Q.9) The Human Development Report which is released by the UNDP, the United Nations global
development network is headquartered in?
[a] Washington DC, USA
[b] Berlin, Germany
*[c] New York City, USA
[d] Montreal, Canada
[e] Rome, Italy
[Marks] 2
[Negative Marks] .5
[SOLUTION]
 UNDP advocates for change and connects countries to knowledge, experience and resources to
help people build a better life.
 It provides expert advice, training and grants support to developing countries, with increasing
emphasis on assistance to the least developed countries.
 The status of UNDP is that of an executive board within the United Nations General Assembly.
The UNDP Administrator is the third highest-ranking official of the United Nations after
the United Nations Secretary-General and Deputy Secretary-General.
 UNDP is funded entirely by voluntary contributions from member nations.

 Currently, the UNDP is one of the main UN agencies involved in the development of the Post-
2015 Development Agenda.
 (The Post-2015 Development Agenda refers to a process led by the United Nations that aims to
help define the future global development framework that will succeed the Millennium
Development Goals).

I.3) There's a little bit of confusion over India's GDP growth statistics at present. The country recently
changed the way that it calculates this number and while there are, obviously, the usual teething
problems with changing the method by which such a complex number is arrived at the basic change
seems most sensible. For the real difference in what they're doing is that they're now calculating the
value that consumers get to enjoy and not the value that producers are consuming. Given that we
want to know is how well off are the people this seems like a move in the right direction.
Q.10) In India, which of the following agencies is responsible for calculating the National Income?
[a] The Department of Economic Affairs, Ministry of Finance
[b] Ministry of Commerce and Industry
[c] The Reserve Bank of India
*[d] Central Statistical Organization (CSO), Ministry of Statistics and Programme Implementation
[e] The State Bank of India
[Marks] 2
[Negative Marks] .5
[SOLUTION]
 The Central Statistics Office coordinates the statistical activities in the country and evolves
statistical standards.
 It comes under the Ministry of Statistics and Programme Implementation.
Q.11) India has shifted to a new GDP series. The GDP was earlier calculated at __________and is
now being calculated at_________?
*[a] Factor Cost, Market Price
[b] Market Price, Factor Cost
[c] Basic Price, Factor cost
[d] Basic Price, Market Price
[e] Current Price, Constant Price
[Marks] 2
[Negative Marks] .5
[SOLUTION]

Earlier, domestic GDP was calculated at factor cost, which took into account prices of products received
by producers. The new formula takes into account market prices paid by consumers and thus the
Consumer-end is given importance.
Q.12) Earlier, the base year for the GDP calculation was 2004-05. In the new GDP series, the base
year has been taken to be?
[a] 2009-10
*[b] 2011-12
[c] 2008-09
[d] 2013-14
[e] 2014-15
[Marks] 2
[Negative Marks] .5
[SOLUTION]
 The change in the base year has led to the upward revision in the GDP Growth Rate.
 Base Year is a specific year against which the economic growth is measured. It is allocated a
value of 100 in an index.
 The estimates at the prevailing prices of the current year are termed as "at current prices", while
those prepared at base year prices are termed "at constant prices".
 The base year is changed periodically to take into account the structural changes which take place
in the economy.
 The first official estimates of national income were computed by CSO with base year 1948-49 for
the estimates at constant prices.
 A base year has to be a normal year without large fluctuations in production, trade and prices of
commodities in general. Reliable price data should be available for it. It should be as recent as
possible.
documents.
Q.13) To calculate GDP at Market Prices, which of the following should not be added?
[a] Product Tax
[b] Production Tax
*[c] Product Subsidy
[d] None of the above is added

[e] All the above components are added while calculating the GDP
[Marks] 2
[Negative Marks] .5
[SOLUTION]
 While calculating the GDP at Market Prices, the subsidy is subtracted and not added.
 To calculate the GDP at Market Prices, Product Tax is added, and the Product Subsidy is
subtracted from the GVA at Basic Prices.
 Note: Factor Cost + Production Tax – Production Subsidy = Basic Price.
 Thus, the GDP at Market Prices also includes the Production Tax.
Q.14) Which of the following arguments make us realize the fact that GDP alone cannot symbolize
the development of a country?
1. The distribution of Income among the people of a country cannot be analysed by the GDP numbers.
2. Many activities in an economy are not evaluated in monetary terms.
3. The externalities are not taken into account while computing the GDP.
4. The GDP numbers does not give us any indication regarding the overall Social Development of a
country.
[a] 2, 3, 4
[b] 1, 3, 4
[c] 1, 2, 4
[d] 2 and 3
*[e] 1, 2, 3, 4
[Marks] 2
[Negative Marks] .5
[SOLUTION]
All the above arguments make us realize that GDP numbers alone cannot symbolize the development
of a country.
Argument 1: Distribution of GDP – how uniform is it? If the GDP of the country is rising, the welfare
may not rise as a consequence. This is because the rise in GDP may be concentrated in the hands of very
few individuals or firms.
Argument 2: Unaccounted activities: Many activities in an economy are not evaluated in monetary
terms. For example, the domestic services women perform at home are not paid for.
Argument 3: Let us understand this with an example:
 Suppose, there is ample electricity generation and this is being given to big industries at a
subsidized rate.
 Because of this, their products have become very competitive and there is increase in demand
and a proportional increase in supply.
 Now we see that this is very good for the economy and leads to a rise in the GDP numbers.
 But here we do not see the adverse effects of it.
 The electricity that is generated is coal based and has led to a lot of pollution.
 Due to this there has been a rise in the incidences of pollution linked sickness like Lung infections
and etc…which has again led to an increase in the health expenditure. This is a negative
externality.
 Now, this is not being take into account while calculating the GDP.
Argument 4: Does not take into account the overall social development of a nation. For that purpose,
we need to look at other indicators like Human Development Index as well. Only when there is inclusive
development, a country is said to prosper.

Q.15) The World Bank releases the estimates of GDP growth rate for its member nations every year
through its report. What is the name of the report?
[a] Ease of Doing Business Report
[b] World Investment Report
[c] World Economic Outlook Report
*[d] Global Economic Prospects Report
[Marks] 2
[Negative Marks] .5
[SOLUTION]
The Global Economic Prospects Report is published by the World Bank. It is published annually and
partly updated two times a year.


All India Free Mini Mock Test Series for RBI

Grade B 2018
Mini Mock Test 2
Poverty, Unemployment and International Financial
Institutions
MCQs + Detailed solutions


Q.1) Till the year 1979, the approach to estimate poverty was traditional i.e. in terms of lack of
income but later an approach to measure poverty in terms of starvation, that is, in terms of how
much people eat was adopted. Which of the following committees was the first to adopt this
approach?
[a] Lakdawala Committee
*[b] Y K Alagh Committee
[c] Tendulkar Committee
[d] Rangarajan Committee
[e] National Planning Committee
[Marks] 1
[Difficulty] Medium
[SOLUTION]
The approach to measure poverty in terms of how much people eat was first of all adopted by the YK
Alagh Committee’s recommendation in 1979 whereby, the people consuming less than 2100 calories in
the urban areas or less than 2400 calories in the rural areas are poor.
Now these calorie requirements needs some ‘monetary value’ which can be determined by ascertaining
‘quantity’ of consumption and ‘prices/value’ of that quantity. Data relating to quantity and value was
provided by NSSO survey.

Q.2) The Government of India has inked a $250 million Loan Agreement with which of the following
international financial institutions/agencies for the project SANKALP that was announced by the
Government of India in its 2017-18 Budget?
[a] IMF
*[b] World Bank
[c] ADB
[d] AIIB
[e] African Development Bank
[Marks] 1
[Difficulty] Easy
[SOLUTION]
A Financing Agreement for IBRD (International Bank for Reconstruction and Development, World Bank’s
financing arm) loan of USD 250 million (equivalent) for the “Skills Acquisition and Knowledge
Awareness for Livelihood Promotion (SANKALP) Project” has been signed with the World Bank.
SANKALP Project: This project was announced in the Union Budget 2017-18.
The Objective of the project is to enhance institutional mechanisms for skills development and increase
access to quality and market-relevant training for the work force.
The Key result areas for the project include:
 Institutional Strengthening at the National and State Levels for Planning, Delivering, and
Monitoring High-Quality Market-Relevant Training;
 Improved Quality and Market Relevance of Skills Development Programs;
 Improved access to and completion of skills training for female trainees and other disadvantaged
groups; and
 Expanding skills training through private-public partnerships (PPPs).
The closing date for the project is 31st March, 2023.

Q.3) Which of the following statement(s) is/are incorrect regarding ‘disguised unemployment’ in
India?
[a] When more people are engaged in a job than actually required, a state of disguised unemployment
is created.
[b] A disguisedly unemployed person is the one who seems to be employed but actually he is not.
*[c] The contribution of a disguisedly unemployed person to the total output is maximum.
[d] In India, the agriculture sector experiences the prevalence of this type of unemployment.
[Marks] 1
[Difficulty] Medium
[SOLUTION]
Option [c] is incorrect.
 When a person is disguisedly unemployed, then his/her contribution to the total output is zero
or negligible.
 This happens because the same work could have been completed on time even without the
participation of the disguisedly unemployed person.

Understanding this with an example:

For example, if in an agriculture field, 5 people are working to cultivate a crop. Suppose, the yield
obtained is x. Now due to some reason, next year, 2 people were unavailable and only 3 people were
doing exactly the same work done last year. At the end, the yield obtained is again x. This means that
those two people were actually disguisedly unemployed in the year when all 5 were working because
even their absence did not result in any decrease in the yield. To sum up, their contribution to the
output was zero.

Q.4) In the year 2017, the Union Cabinet has approved India's Membership for European Bank for
Reconstruction & Development (EBRD). Where is EBRD headquartered?
[a] Berlin
*[b] London
[c] Paris
[d] Vienna
[e] Moscow
[Marks] 1
[Difficulty] Easy
[SOLUTION]
 The European Bank for Reconstruction and Development (EBRD) was established in 1991, when
communism was crumbling in central and eastern Europe and these countries needed support
to nurture a new private sector in a democratic environment.
 EBRD’s charter is unique among MDBs (Multilateral Development Banks) in that it stipulates
that EBRD may work only in countries that are committed to democratic principles.
 EBRD, which is headquartered in London, is owned by 60 countries and 2 intergovernmental
institutions, the European Union and the European Investment Bank.
 Although its shareholders are in the public sector, EBRD invests mainly in private enterprises,
usually together with commercial partners.
What would be the impact of India joining the European Bank for Reconstruction and Development?
 Membership of EBRD would enhance India's international profile and promote its economic
interests.
 Access to EBRD's Countries of Operation and sector knowledge.
 India's investment opportunities would get a boost.

 It would increase the scope of cooperation between India and EBRD through co-financing
opportunities in manufacturing, services, Information Technology, and Energy.
 EBRD's core operations pertain to private sector development in their countries of operation.
The membership would help India leverage the technical assistance and sectoral knowledge of
the bank for the benefit of development of private sector.
 This would contribute to an improved investment climate in the country.
Q.5) India has come up with a Youth Development Index 2017 along the lines of the Global Youth
Development Index. In India Youth Development Index, the five dimensions of Global Youth
Development Index (Global YDI) have been retained. But India has added a new dimension to its
Index. What is this new dimension added by India?
[a] Digital Participation
*[b] Social Inclusion
[c] Financial well-being
[d] Sanitation and Hygiene
[Marks] 1
[Difficulty] Medium
[SOLUTION]
The new dimension added by India is ‘Social Inclusion’.
 In India Youth Development Index, the five dimensions of Global Youth Development Index
(Global YDI) have been retained. These five dimensions are:
 Education,
 Health and well-being,
 Employment and Opportunity,
 Political Participation and
 Civic Participation for young people.
What is this Youth Development Index (YDI)?

 The objective of constructing the India Youth Development Index (YDI) 2017 is to track the
trends in Youth Development across the States.
 The Index enables recognizing the high and low performing states, identifies the weak domains
and informs the policy makers the priority areas of intervention for youth development in the
states.
 The Rajiv Gandhi National Institute of Youth Development (RGNIYD), Sriperumbudur, Tamil
Nadu, an Institute of National Importance has come out with Youth Development Index and
Report 2017.
 Constructing Youth Development Index for the year 2017 was done using the latest definition
of youth as used in National Youth Policy – 2014 (India) and World Youth Development Report
of Commonwealth (15 – 29 years) as well as using the Commonwealth Indicators in order to
facilitate Global comparison.
Q.6) In which of the following places is the African Development Bank (AfDB) headquartered?
*[a] Abidjan
[b] Cairo
[c] Adis Ababa
[d] Tunis
[e] Pretoria
[Marks] 1
[Difficulty] Easy
[SOLUTION]
The African Development Bank is a part of the African Development Bank Group. The African
Development Bank Group was founded in 1964 and the other two entities apart from the African
Development Bank which form a part of it are the African Development Fund and the Nigeria Trust
Fund.
 The African Development Bank Group (AfDB) is a multilateral development finance institution
established to contribute to the economic development and social progress of African
countries.
 The AfDB is a financial provider to African governments and private companies investing in the
regional member countries (RMC).
 While it was originally headquartered in Abidjan, Côte d'Ivoire, the bank's headquarters moved
to Tunis, Tunisia in 2003, due to the Ivorian civil war; before returning in September 2014.

Q.7) Following are some of the observations related to the employment trends in India as per the
Census 2011. Which of the following observations is/are correct?
1. Among literates, unemployment rates were higher among the better qualified.
2. At all levels of education, unemployment rates were higher in rural than in urban areas.
3. At every level of education, especially at the higher levels, female unemployment exceeded male
unemployment.
4. Overall, India’s unemployment rate grew from 6.8 p.c. in 2001 to 9.6 p.c. in 2011, based on official
Census data.

[a] 2, 3, 4
[b] 1, 2, 4
[c] 3 and 4
[d] 1 and 4
*[e] 1, 2, 3, 4
[Marks] 1
[Difficulty] Medium
[SOLUTION]
All the above given statements are correct.

Q.8) Which of the following statement(s) is/are correct regarding ‘Asian Infrastructure Investment
Bank’ (AIIB)?
[a] Japan has the highest shareholding in AIIB
*[b] India has the second highest shareholding in AIIB
[c] AIIB is headquartered in Shanghai, China
[d] The Authorized Capital Stock of the bank is 200 billion US Dollars
[e] All of the above
[Marks] 1
[SOLUTION]
Shareholding pattern of the AIIB is as follows:
 The Asian Infrastructure Investment Bank (AIIB) is an international financial institution that aims
to support the building of infrastructure in the Asia-Pacific region.
 The bank has 50-member states of founding members, plus 20 regular members (up to 2017)
and was proposed as an initiative by the government of China.
 The capital of the bank is $100 billion, equivalent to 2⁄3 of the capital of the Asian Development
Bank and about half that of the World Bank.
 The bank was proposed by China in 2013 and the initiative was launched at a ceremony in
Beijing in October 2014.
Shareholding Structure:
 The Authorized Capital Stock of the bank is 100 billion US Dollars, divided into 1 million shares
of 100 000 dollars each. Twenty percent are paid-in shares (and thus have to be transferred to
the bank), and 80% are callable shares.
 The allocated shares are based on the size of each member country's economy (calculated using
GDP Nominal (60%) and GDP PPP (40%)), whether they are an Asian or Non-Asian Member, and
the number of shares determines the fraction of authorized capital in the bank.
 Three categories of votes exist: basic votes, share votes and Founding Member votes. The basic
votes are equal for all members and constitute 12% of the total votes, while the share votes are
equal to the number of shares. Each Founding Member furthermore gets 600 votes.

These are factual questions and the students should memorize them
Q.9) Which of the following statement(s) is/are correct regarding the recommendations of the
Tendulkar and Rangarajan Committee formed for the estimation of poverty in India?
[a] The focus areas of the Rangarajan committee is wide as it includes not only the expenditure on
food, clothing, health and education but also other expenditures like transport, rent, non-food items
that meet the nutritional requirements etc.
[b] The poverty estimation method of the Tendulkar Committee is ‘Per Capita Expenditure Monthly’
and that of the Rangarajan Committee is ‘Monthly Expenditure of Family of Five’.
[c] As per the estimation of the Rangarajan Committee, the number of poor increased in comparison
to the Tendulkar Committee’s estimation.
*[e] All the above
[Marks] 1
[Difficulty] Medium
[SOLUTION]
All the above given statements are correct.
Elaborating statement [c]:
The table given below shows the total number of poor as per both the committees’ estimations:
 The Rangarajan report has added 93.7 million more to the list of the poor assessed last year as
per the Suresh Tendulkar committee formula.
 Now the total number of poor has reached 363 million from 269 million in 2011-12.

Q.10) There can be a scenario where poverty is handed over to individuals and families from
generations before them. In this type of poverty, there is usually no escape from it, as people are
trapped in its causes and have no access to tools that will help them get out of it. What can this type
of poverty be called?
[a] Situational Poverty
*[b] Generational Poverty
[c] Absolute Poverty
[d] Relative Poverty
[e] Transitory Poverty
[Marks] 1
[Difficulty] Easy
[SOLUTION]
The type of poverty mentioned in the question is Generational Poverty.
 In case of Situational Poverty (Transitory Poverty), people or families can be poor because of
some adversities like earthquakes, floods or a serious illness.
 Sometimes, people can help themselves out of this situation quickly if they are given a bit of
assistance, as the cause of their situations was just one unfortunate event.
 Absolute poverty is measured against a pre-determined level of living that families should be
able to afford.
 Consumption of food grains, vegetables, milk products and other items that are necessary for a
healthy living and access to other non-food items are included in the absolute minimum
consumption basket.
 These standards are then converted into monetary units and defined as the poverty line. People
with consumption expenditure below this threshold are considered poor.
 Relative poverty occurs when people in a country do not enjoy a certain minimum level of living
standards as compared to the rest of the population and so would vary from country to country,
sometimes within the same country.

Q.11) Which of the following is the correct formula for finding the unemployment rate?
[a] Unemployment rate = (Unemployed workers /Total number of people employed) * 100
*[b] Unemployment rate = (Unemployed workers / Total Labour Force) * 100
[c] Unemployment rate = (Unemployed workers / Total number of people seeking employment) * 100
[d] Unemployment rate = (Number of people seeking employment / Total Labour Force) * 100
[e] Unemployment rate = (Number of people employed / Total Labour Force) * 100
[Marks] 1
[Difficulty] Easy
[SOLUTION]
Unemployment rate:
It is the percent of the labor force that is without work.
Unemployment rate = (Unemployed workers / Total Labour Force) * 100

What is Labour Force?
 Labour force (also called work force) is the total number of people employed or seeking
employment in a country or region. (Thus labour force constitutes of both employed and
unemployed).
 One is classified as ‘not in labour force’; if he or she was engaged in relatively longer period in
any one of the non-gainful activities or we can say those who are neither seeking nor available
for work.
Q.12) Which of the following statement(s) is/are incorrect regarding the National Career Service
Scheme?
*[a] This scheme was launched in the year 2016
[b] It is being implemented by the Ministry of Labour and Employment
[c] It is an ICT based portal developed to provide a wide variety of employment related services to job
seekers and youth through technology.
[e] All the above
[Marks] 1
[Difficulty] Easy
[SOLUTION]
 The National Career Service scheme was launched in the year 2015.
 NCS portal facilitates registration of job seekers, job providers, skill providers, career counsellors,
etc. free of cost.
 Since its launch, the NCS has grown significantly with over 3.6 crore job seekers, 9 lakh employers.
It had mobilized over 1 lakh jobs in the last few months.
Q.13) The National Policy on Skill Development was first formulated in 2009 and it provided the
framework for skill development activities in the country.
Over the years, changes in the macro environment, and the experience gained through
implementation of various skill development programmes in the country have necessitated changes
in the policy. Accordingly, a new National Policy on Skill Development has been formulated which
supersedes the 2009 policy. In which year was this new policy formulated?
[a] 2011
[b] 2014
[c] 2012
[d] 2001
*[e] 2015
[Marks] 1

[Difficulty] Easy
[SOLUTION]
Vision of the policy:
To create an ecosystem of empowerment by Skilling on a large Scale at Speed with high Standards and
to promote a culture of innovation based entrepreneurship which can generate wealth and employment
so as to ensure Sustainable livelihoods for all citizens in the country.
Key features of the policy:
 It addresses key obstacles to skilling, including low aspirational value, lack of integration with
formal education, lack of focus on outcomes, low quality of training infrastructure and trainers,
etc.
 Further, the Policy seeks to align supply and demand for skills by bridging existing skill gaps,
promoting industry engagement, operationalising a quality assurance framework, leverage
technology and promoting greater opportunities for apprenticeship training.
 Equity is also a focus of the Policy, which targets skilling opportunities for socially/geographically
marginalised and disadvantaged groups.
 Skill development and entrepreneurship programmes for women are a specific focus of the
Policy.
Financing
National Skill Development Fund (NSDF) has been set up by Government of India with the objective of
encouraging skill development in the country. A public Trust set up by Government of India is the
custodian of the Fund. The Fund acts as a receptacle for all donations, contribution in cash or kind from
all contributors (including Government, multilateral organizations, corporations etc) for furtherance of
the objectives of the Fund.

Q.14) Which of the following statement(s) is/are correct regarding the New Development Bank
(NDB)?
1. The New Development Bank is a multilateral development bank established by the BRICS states.
2. The Agreement on the NDB specifies that the voting power of each member will be equal to the
number of its subscribed shares in the capital stock of the bank.
3. NDB is currently headquartered in Beijing, China.
4. The bank does not allow the inclusion of any other member except the BRICS nations.
[a] 1, 2, 3
[b] 2, 3, 4
*[c] 1 and 2

[d] 1 and 3
[e] 1, 2, 3, 4
[Marks] 1
[Difficulty] Medium
[SOLUTION]
Statement 3 and 4 are incorrect.
Statement 3: NDB is currently headquartered at Oriental Financial Centre in Shanghai, China.
Statement 4: The bank will allow new members to join but the BRICS capital share cannot fall below
55%. Bank's Articles of Agreement specify that all members of the United Nations could be members
of the bank.
The New Development Bank (NDB)
 The New Development Bank (NDB), formerly referred to as the BRICS Development Bank, is a
multilateral development bank established by the BRICS states (Brazil, Russia, India, China and
South Africa).
 According to the Agreement on the NDB, "the Bank shall support public or private projects
through loans, guarantees, equity participation and other financial instruments." Moreover,
the NDB "shall cooperate with international organizations and other financial entities, and
provide technical assistance for projects to be supported by the Bank."
Shareholding:
The bank will have starting capital of $50 bln, with capital increased to $100 bln over time. Brazil, Russia,
India, China and South Africa will initially contribute $10 bln each to bring the total to $50 bln.


Q.15) The Global Hunger Index (GHI) released by the International Food Policy Research Institute
(IFPRI) calculates the GHI Scores based on four indicators. Which of the following is not one of them?
[a] Child Wasting
[b] Child Stunting
*[c] Neonatal Mortality
[d] Undernourishment
[e] Under-5 Mortality Rate
[Marks] 1
[Difficulty] Easy
[SOLUTION]
• The Global Hunger Index (GHI) is a tool designed to comprehensively measure and track hunger
at the global, regional, and national levels.
• The GHI is designed to raise awareness and understanding of the struggle against hunger, provide
a means to compare the levels of hunger between countries and regions, and call attention to
the areas of the world in greatest need of additional resources to eliminate hunger.
• The composition of the GHI is as follows:

Q.16) Which of the following is the correct formula to calculate the Worker Population Ratio (WPR)?
[a] WPR = (No. of unemployed persons/Total Population) * 1000
*[b] WPR = (No. of employed persons/Total Population) * 1000
[c] WPR = (Labour Force/Total Population) * 1000
[d] WPR = (No. of people seeking employment/Total Population) * 1000
[Marks] 1
[Difficulty] Medium
[SOLUTION]
Worker Population Ratio (WPR):
Worker Population Ratio (WPR) is defined as the number of persons employed per 1000 persons.
Labour Force Participation Rate (LFPR):
Labour Force Participation Rate (LFPR) is defined as the number of persons in the labour force per 1000
persons.

Q.17) The type of unemployment which occurs due to a mismatch between the jobs available in
the market and the skills of the available workers in the market is known as?
[a] Frictional unemployment
*[b] Structural unemployment
[c] Seasonal unemployment
[d] Chronic unemployment
[e] Open unemployment
[Marks] 1


[Difficulty] Easy
[SOLUTION]
 Structural Unemployment occurs due to structural changes in the economy.
 Structural changes can be due to change in technology (from labour intensive technology to
capital intensive technology) or change in the pattern of demand.
 Thus, structural unemployment is a category of unemployment arising from the mismatch
between the jobs available in the market and the skills of the available workers in the market.
 In a developing country like India, structural unemployment exists both in the rural and the urban
areas.
 For example, if a particular job which is currently being done by a number of workers is replaced
by automation, then these workers would be rendered unemployed due to the automation
process.

Q .18) Which of the following is/are true with respect to the scheme ‘Pandit Deendayal Upadhyay
Shramev Jayate Karyakram’?
[a] The scheme was launched in October 2014 by Government of India.
[b] This is an umbrella scheme with five schemes under it.
[c] Its objective is to create conducive environment for industrial development and doing business
with ease and also expanding government support to impart skill training for workers.
[d] Only (a) and (c)
*[e] a, b, c
[Marks] 1
[SOLUTION]
The Pandit Deendayal Upadhyay Shramev Jayate Karyakram was launched in October 2014 by
Objective: To create conducive environment for industrial development and doing business with ease
and also expanding government support to impart skill training for workers.
This is an umbrella scheme with five schemes under it as follows:
A dedicated Shram Suvidha Portal: That would allot Labour Identification Number (LIN) to nearly 6
lakhs units and allow them to file online compliance for 16 out of 44 labour laws

An all-new Random Inspection Scheme: Utilizing technology to eliminate human discretion in

selection of units for Inspection, and uploading of Inspection Reports within 72 hours of inspection
mandatory
Universal Account Number: Enables 4.17 crore employees to have their Provident Fund account
portable, hassle-free and universally accessible
Apprentice Protsahan Yojana: Will support manufacturing units mainly and other establishments by
reimbursing 50% of the stipend paid to apprentices during first two years of their training
Revamped Rashtriya Swasthya Bima Yojana: Introducing a Smart Card for the workers in the
unorganized sector seeded with details of two more social security schemes.

Q.19) Which of the following statement(s) is/are correct regarding the scheme ‘Rashtriya Swasthya
Bima Yojana’?
1. This is a health insurance scheme that aims to facilitate launching of health insurance projects in all
the districts of the States in a phased manner for BPL workers.
2. Unorganized sector workers belonging to BPL category and their family members (a family unit of
five) shall be the beneficiaries under the scheme.
3. This scheme was under the Labour and Employment Ministry until April, 2015.
4. In 2014, a revamped RSBY was launched which was to be administered by the Ministry of Health
and Family Welfare with effect from 1st April, 2015.
[a] 1, 2, 4
[b] 1, 3
[c] 1, 4
[d] 1, 2
*[e] 1, 2, 3, 4
[Marks] 1
[SOLUTION]
All the given statements are correct.
The objective of this scheme is:
Recognizing the diversity with regard to public health infrastructure, socio -economic conditions and the
administrative network, the health insurance scheme aims to facilitate launching of health insurance
projects in all the districts of the States in a phased manner for BPL workers.

Funding Pattern
 Contribution by Government of India: 75% of the estimated annual premium of Rs.750, subject
to a maximum of Rs. 565 per family per annum. The cost of smart card will be borne by the
Central Government.
 Contribution by respective State Governments: 25% of the annual premium, as well as any
additional premium.
 The beneficiary would pay Rs. 30 per annum as registration/renewal fee.
 The administrative and other related cost of administering the scheme would be borne by the
respective State Governments.

Q.20) Which of the following statement(s) is/are incorrect with respect to the National Social
Assistance Programme (NSAP)?
1. NSAP was launched on 15th August 1995
2. National Social Assistance Programme is a social security and welfare programme to provide
support to aged persons, widows, disabled persons and bereaved families on death of primary bread
winner, belonging to below poverty line households.
3. At its inception in the year 1995, it had three components.
4. At present, NSAP has only two components (schemes) under it.
*[a] Only 4
[b] 2, 3 and 4
[c] 2 and 3
[d] Only 3
[e] 1 and 4
[Marks] 1
[SOLUTION]
 NSAP was launched on 15th August, 1995.
 The National Social Assistance Programme (NSAP) represents a significant step towards the
fulfillment of the Directive Principles in Article 41 and 42 of the Constitution recognizing the
concurrent responsibility of the Central and the State Governments in the matter.
 In particular, Article 41 of the Constitution of India directs the State to provide public assistance
to its citizens in case of unemployment, old age, sickness and disablement and in other cases of
undeserved want within the limit of its economic capacity and development.
Components of NSAP
The NSAP at its inception in 1995 had three components namely
1. National Old Age Pension Scheme (NOAPS),

2. National Family Benefit Scheme (NFBS) and

3. National Maternity Benefit Scheme (NMBS). The National Maternity Benefit Scheme (NMBS) was
subsequently transferred on 1st April, 2001 from the Ministry of Rural development to the
Ministry of Health and Family Welfare.
 On 1st April, 2000 a new Scheme known as Annapurna Scheme was launched. This scheme
aimed at providing food security to meet the requirement of those senior citizens who, though
eligible, have remained uncovered under the NOAPS.
 In February 2009, two new Schemes known as Indira Gandhi National Widow Pension Scheme
(IGNWPS) and Indira Gandhi National Disability Pension Scheme (IGNDPS) were introduced.
Presently NSAP comprises of five schemes, namely –

1. Indira Gandhi National Old Age Pension Scheme (IGNOAPS),
2. Indira Gandhi National Widow Pension Scheme (IGNWPS),
3. Indira Gandhi National Disability Pension Scheme (IGNDPS),
4. National Family Benefit Scheme NFBS and
5. Annapurna.

documents.
Q.21) The 2018 BRICS Summit will be held in which of the following places?
[a] Xiamen, China
[b] Goa, India
*[c] Johannesburg, South Africa
[d] Brasilia, Brazil
[e] Rio de Janeiro, Brazil
[Marks] 1
[Difficulty] Easy
[SOLUTION]
 The 2018 BRICS summit is next the tenth annual BRICS summit, an international relations
conference attended by the heads of state or heads of government of the five-member
states Brazil, Russia, India, China and South Africa.
 The summit will be held in Johannesburg, South Africa, the second time the South Africa has
hosted the summit after the 2013 summit.
 The 2017 summit was held in Xiamen, China.

documents.
Q.22) Which of the following is a scheme to incentivize employers for generation of new
employment, where the Government of India will be paying the 8.33% EPS contribution of the
employer for the new employment?
[a] Pandit Deendayal Upadhyay Shramev Jayate Karyakram
*[b] The Pradhan Mantri Rojgar Protsahan Yojana (PMRPY)
[c] Apprenticeship Protsahan Yojna
[d] Deen Dayal Upadhyaya Grameen Kaushalya Yojana
[Marks] 1
[Difficulty] Medium
[SOLUTION]
 The PMRPY Scheme aims to incentivise employers for employment generation by the
Government paying the employers' EPS contribution of 8.33%, for the new employees, for the
first three years of their employment and is proposed to be made applicable for unemployed
persons that are semi-skilled and unskilled.
 The scheme is being implemented by the Ministry of Labour and Employment and is operational
since August, 2016.
 This scheme has a dual benefit, where, on the one hand, the employer is incentivised for
increasing the employment base of workers in the establishment, and on the other hand, a large
number of workers will find jobs in such establishments. A direct benefit is that these workers
will have access to social security benefits of the organized sector.
Duration of the scheme:

The Scheme will be in operation for a period of 3 years and the Government of India will continue to
pay the 8.33% EPS contribution to be made by the employer for the next 3 years.
That is, all new eligible employees will be covered under the PMRPY Scheme till 2019 - 20.
Q.23) In which of the following years was the National Food Security Act (NFSA) notified?
[a] 2010
*[b] 2013
[c] 2008
[d] 2009
[e] 2016
[Marks] 1
[Difficulty] Easy
[SOLUTION]
The National Food Security Act, 2013 was notified on 10th September, 2013
Objective: To provide for food and nutritional security in human life cycle approach, by ensuring access
to adequate quantity of quality food at affordable prices to people to live a life with dignity.
Salient Features of the Act:
 The Act provides for coverage of upto 75% of the rural population and upto 50% of the urban
population for receiving subsidized food grains under Targeted Public Distribution System
(TPDS), thus covering about two-thirds of the population. Of these, at least 46 percent of the
rural and 28 percent of the urban population will be designated as priority households. The rest
will be designated as general households.
 The eligible persons will be entitled to receive 5 Kgs of food grains per person per month at
subsidized prices of Rs. 3/2/1 per Kg for rice/wheat/coarse grains. These prices can be revised
after the first three years, up to the level of the minimum support price (assured price paid by
the Centre to farmers at the time it buys grains from them).
 The eldest women of the household of age 18 years or above will be the head of the household
for the purpose of issuing ration cards.
 The existing Antyodaya Anna Yojana (AAY) households, which constitute the poorest of the poor,
will continue to receive 35 Kgs of food grains per household per month. General households will
be entitled to atleast 3 kg/person/month.
 Nutritional support to women and children: Besides meal to pregnant women and lactating
mothers during pregnancy and six months after the child birth, such women will also be entitled
to receive maternity benefit of not less than Rs. 6,000. It is however restricted to two children
only.
 Children upto 14 years of age will be entitled to nutritious meals as per the prescribed
nutritional standards.
 In case of non-supply of entitled food grains or meals, the beneficiaries will receive food security
allowance.
 The Act also contains provisions for setting up of grievance redress mechanism at the District and
State levels. Separate provisions have also been made in the Act for ensuring transparency and
accountability.


Q.24) Which of the following statement(s) is/are correct with respect to the five institutions of the
World Bank Group?
1. The International Development Association (IDA): It offers loans to the world's poorest countries.
These loans come in the form of "credits," and are essentially interest-free. They offer a 10-year grace
period and hold a maturity of 35 years to 40 years.
2. The Multilateral Investment Guarantee Agency (MIGA): It supports direct foreign investment into
a country by offering security against the investment in the event of political turmoil.
3. The International Finance Corporation (IFC): One of the functions of IFC is to act as an investor in
capital markets and it helps governments privatize inefficient public enterprises.
4. The International Centre for Settlement of Investment Dispute (ICSID): It facilitates and works
towards a settlement in the event of a dispute between a foreign investor and a local country.
[a] 1, 3, 4
[b] 1, 2, 3
[c] 2 and 3
[d] 1 and 2
[e] 1, 2, 3, 4
[Marks] 1
[Difficulty] Medium
[SOLUTION]
All the statements given above are correct.


Q.25) Consider a situation where the employed people are contributing to production less than they
are capable of. What is this type of unemployment known as?
[a] Disguised unemployment
*[b] Under-employment
[c] Cyclical unemployment
[d] Frictional employment
[Marks] 1
[SOLUTION]
Under-employment:
 It is a situation under which employed people are contributing to production less than they are
capable of.
 It can be in terms of time (visible under-employment) or type of work (invisible under-
employment).
 Part-time workers come under this category.

Q.26) Who among the following is the President of the Asian Development Bank (ADB)?
[a] Jim Yong Kim
[b] Roberto Azevedo
[c] K.V.Kamath
[d] Christina Lagarde
*[e] Takehiko Nakao
[Marks] 1
[SOLUTION]
Takehiko Nakao is the President of the Asian Development Bank (ADB) and the Chairperson of ADB's
Board of Directors. He was elected President by ADB's Board of Governors and assumed office in April
2013.

documents.
Q.27) The National Sample Survey Organization (NSSO) comes under which of the following
Ministries of the Government of India?
*[a] Ministry of Statistics and Programme Implementation
[b] Ministry of Finance
[c] Ministry of Commerce and Industry
[d] Home Ministry
[Marks] 1
[SOLUTION]
NSSO:
 The National Sample Survey Office (NSSO) is headed by a Director General and comes under the
National Statistical Office of the Ministry of Statistics and Programme Implementation.
 It is responsible for conduct of large scale sample surveys in diverse fields on All India basis.
 Primarily data are collected through nation-wide household surveys on various socio-economic
subjects, Annual Survey of Industries (ASI), etc.
 Besides these surveys, NSSO collects data on rural and urban prices and plays a significant role in
the improvement of crop statistics through supervision of the area enumeration and crop
estimation surveys of the State agencies.
 It also maintains a frame of urban area units for use in sample surveys in urban areas.
Q.28) Which of the following statement(s) is/are true with respect to the employment growth in
India (as per the National Sample Survey Office)?
1. There have also been structural changes for the first time, the share of the primary sector in total
employment has dipped below the halfway mark (declined from 58.5 per cent in 2004-05 to 48.9 per
cent in 2011-12), while the share of employment in the secondary and tertiary sectors has increased.
2. Self-employment continues to dominate, with a 52.2 per cent share in total employment.
3. A cause for concern is the deceleration in the compound annual growth rate (CAGR) of employment
during 2004-05 to 2011-12 to 0.5 per cent from 2.8 per cent during 1999-2000 to 2004-05.

4. We can infer from the data that a significant share of workers is engaged in low-income generating
activities.
[a] 1, 2 and 4
[b] 2 and 4
[c] 1, 3 and 4
[d] 2 and 3
[e] 1, 2, 3 and 4
[Marks] 1
[Difficulty] Hard
[SOLUTION]
All the given statements are correct.
The employment trend in India indicate that there is a need for diversification of livelihood in rural areas
from agriculture to non-agriculture activities.

documents.
Q.29) Which of the following is not one of the committees formed for the estimation of poverty in
India?
[a] Lakdawala Committee
[b] Y K Alagh Committee
*[c] S R Hashim Committee
[d] Tendulkar Committee
[e] Rangarajan Committee
[Marks] 1
[SOLUTION]
SR Hashim Committee laid down the parameters for Automatic Inclusion, Automatic Exclusion and
parameters of deprivation that were used in the Socio-Economic Caste Census 2011.
Q.30) In which of the following places is the European Investment Bank (EIB) headquartered?

[a] Berlin
*[b] Luxembourg
[c] London
[d] France
[e] Athens
[Marks] 1
[SOLUTION]
European Investment Bank
 The European Investment Bank (EIB) is the European Union's non-profit long-term lending
institution established in 1958 under the Treaty of Rome.
 As a "policy-driven bank" whose shareholders are the member states of the EU, the EIB uses its
financing operations to bring about European integration and social cohesion. It should not be
confused with the European Central Bank.
 The EIB is a publicly owned international financial institution and its shareholders are the EU
member states.
 Thus the member states set the bank's broad policy goals and oversee the two independent
decision-making bodies—the board of governors and the board of directors.
 It is the world's largest international public lending institution.

Q.31) Which of the following refers to a type of unemployment which occurs when a worker is
shifting from one job to the other?
[a] Structural unemployment
[b] Chronic unemployment
*[c] Frictional unemployment
[d] Disguised unemployment
[e] Seasonal unemployment
[Marks] 1
[SOLUTION]
Frictional Unemployment:
 It occurs when a worker is shifting from one job to the other.

 During the mobility period, he may unemployed for some time.
 It is a temporary phenomenon. In other words, Frictional unemployment is the time period
between jobs when a worker is searching for, or transitioning from one job to another.

 It is sometimes called search engine and can be voluntary based on the circumstances of the
unemployed individual.

Q.32) In which of the following places is the Islamic Development Bank (IDB) headquartered?
[a] Abu Dhabi, UAE
[b] Dubai, UAE
*[c] Jeddah, Saudi Arabia
[d] Kuwait City, Kuwait
[Marks] 1
[Difficulty] Easy
[SOLUTION]
 The Islamic Development Bank (IDB) is a multilateral development financing institution located
in Jeddah, Saudi Arabia.
 It was founded in 1973 by the Finance Ministers at the first Organisation of the Islamic
Conference (now called the Organisation of Islamic Cooperation) with the support of the king of
Saudi Arabia at the time, and began its activities on 20 October 1975. There are 56 shareholding
member states.
 On the 22 May 2013, IDB tripled its authorized capital to $150 billion to better serve Muslims in
member and non-member countries. The Bank has received credit ratings of AAA from Standard
& Poor's, Moody's and Fitch. Saudi Arabia holds about one quarter of the bank's paid up capital.
The IDB is an observer at the United Nations General Assembly.

Q.33) Which of the following statement(s) is/are correct regarding the ‘Pradhan Mantri Yuva
Yojana’ scheme?
1. PMYY is MSDE’s (Ministry of Skill Development and Entrepreneurship) flagship scheme on
entrepreneurship education and training.
2. The scheme was launched to scale up an ecosystem of entrepreneurship for youngsters on 10th
November, 2016.
3. The scheme spans over four years (2016-17 to 2019-20).
4. The scheme is launched in collaboration with the Ministry of Micro, Small and Medium Enterprises.
[a] 1, 2, 4
[b] Only 1
*[c] 1 and 2
[d] 1, 2, 3
[e] 1 and 3
[Marks] 1
[Difficulty] Medium
[SOLUTION]
Statements 3 and 4 are incorrect.
The scheme spans over five years (2016-17 to 2020-21).
 It will provide entrepreneurship education and training to over 7 lakh students in 5 years
through 3,050 institutes.
 It will provide easy access to information and mentor network, incubator, credit and accelerator
and advocacy to create a pathway for the youth.
 The institutes under the PMYY include 2,200 institutes of higher learning (colleges, universities,
and premier institutes), 500 ITIs, 300 schools and 50 entrepreneurship development centres
through Massive Open Online Courses (MOOCs).
Q.34) What is India’s rank among 119 nations in the GHI 2017?
[a] 97
[b] 116
*[c] 100
[d] 95
[e] 92
[Marks] 1
[Difficulty] Easy
[SOLUTION]
 India has been ranked No. 100 among 119 nations on the Global Hunger Index (2017) and had
slipped 3 levels since last year from 97th.
 GHI scores are given on a 100-point scale, where 0 is the best score (no hunger) and 100 is the
worst.
 A value of 0 would mean that a country had no undernourished people in the population, no
children younger than five who were wasted or stunted, and no children who died before their
fifth birthday.

 A value of 100 would signify that a country’s undernourishment, child wasting, child stunting,
and child mortality levels were each at approximately the highest levels observed worldwide in
recent decades.
GHI Severity Scale:
India’s score:
• In 2017 GHI, India scored 31.4 and was placed in high end of “serious” category. India low ranking
also influences South Asia’s regional score as three quarters of South Asia’s population reside in
India.
• India’s poor performance should have set off alarm bells, considering that our fall since 2014 is a
dramatic 45 points in 3 years — down from 55th to 100th rank.
documents.
Q.35) When is the World Youth Skills Day celebrated?

[a] 15th November
[b] 15th December
*[c] 15th July
[d] 15th August
[e] 15th April
[Marks] 1
[Difficulty] Easy

[SOLUTION]
 World Youth Skills Day that annually falls on July 15 is one of new UN International Days of
observance. It was established by the UN General Assembly on November 11, 2014.
 Observance of the day aims to create more awareness on training and the development of skills
for the youth of today and also create better employment opportunities for the youth.
 The Government of India launched the Skill India Mission on this day in July, 2015.


I.1) The Financial Sector Assessment Program (FSAP), established in 1999, is a comprehensive and in-
depth assessment of a country’s financial sector. FSAPs analyze the resilience of the financial sector,
the quality of the regulatory and supervisory framework, and the capacity to manage and resolve
financial crises. Based on its findings, FSAPs produce recommendations of a micro- and macro-
prudential nature, tailored to country-specific circumstances.
At the end of each FSAP mission, teams leave a detailed and comprehensive Aide Memoire with
national authorities, which is confidential. FSAPs conclude with the preparation of a Financial System
Stability Assessment (FSSA), which focuses on issues of relevance to IMF surveillance and is discussed
at the IMF Executive Board together with the country’s Article IV report.
Q.1) In developing and the emergent market economies, FSAPs (Financial Sector Assessment
Program) are conducted by the IMF jointly with which of the following International Financial
Institutions/Agencies?
*[a] The World Bank
[b] ADB
[c] AIIB
[d] The Finance Ministries of the respective countries
[e] The Central Bank of the respective countries
[Marks] 2
[Negative Marks] .5
[Difficulty] Medium
[SOLUTION]
 In developing and emerging market countries, FSAPs are conducted jointly with the World
Bank.
 In these countries, FSAP assessments include two components: a financial stability assessment,
which is the responsibility of the Fund, and a financial development assessment, which is the
responsibility of the World Bank.
 In jurisdictions with financial sectors deemed by the International Monetary Fund to be
systemically important, financial stability assessments under the FSAP are a mandatory and are
supposed to take place every five years; for all other jurisdictions, participation in the program
is voluntary.
 Last FSAP for India was conducted in 2011-12 and the report was published by IMF in January
2013.
Q.2) Which of the following statement(s) is/are incorrect with regard to the International Monetary
Fund (IMF)?
[a] In the IMF, each member country has equal voting rights and it follows ‘One Country, One Vote’
principle.
[b] Only the developed countries are eligible to be the members of the IMF.
[c] IMF is responsible for the creation and maintenance of the international monetary system and it
does not offer financial assistance.
*[d] All the above
[Marks] 2
[Negative Marks] .5
[Difficulty] Hard
[SOLUTION]
All the above given statements are incorrect.
Option [a]: The IMF gets its money from quota subscriptions paid by member states. The size of each
quota is determined by how much each government can pay according to the size of its economy. The
quota in turn determines the weight each country has within the IMF - and hence its voting rights - as
well as how much financing it can receive from the IMF.
The table given below shows the quota and voting shares of the IMF members:

Option [b]: Membership of the IMF is open to any country that conducts foreign policy and accepts the
organization's statutes.
Option [c]: The IMF is responsible for the creation and maintenance of the international monetary
system, the system by which international payments among countries take place.
To achieve these goals, the IMF focuses and advises on the macroeconomic policies of a country, which
affect its exchange rate and its government's budget, money and credit management.
In addition, as a fund, it may offer financial assistance to nations in need of correcting balance of
payments discrepancies (a country may ask for financial assistance if it finds itself in an economic crisis,
whether caused by a sudden shock to its economy or poor macroeconomic planning).

Q.3) The recent IMF reforms which became effective from December 2015 has led to an increase in
India’s voting rights from 2.3% to?
[a] 3%
[b] 2.9%
*[c] 2.6%
[d] 2.4%
[e] 3.3%
[Marks] 2
[Negative Marks] .5
[Difficulty] Easy
[SOLUTION]
 The reforms were agreed upon by the 188 members of the IMF in 2010 in the aftermath of the
global financial meltdown.
 However, there implementations were delayed due to the time taken by the US Congress to
approve the changes.
 But, were finally approved by the US Congress in December 2015, thus making them finally
effective.
Following were the key changes:

 India’s voting rights increased by 0.3% from the current 2.3% to 2.6%. China’s voting rights
increased by 2.2% from current 3.8% to 6 %.
 US’s quota share dropped from 16.7 per cent to 16.5 per cent but it will retain its veto power.
 China will have the 3rd largest IMF quota and voting share after the US and Japan. While, India,
Russia and Brazil will also be among the top 10 members of the IMF.
 Under the reform, for the first time IMF’s Executive Board will consist entirely of elected
Executive Directors and it ends the category of appointed Executive Directors.


documents.
Q.4) The FSAP 2017 assessment report acknowledges that India has recorded strong growth in
recent years in both economic activity and financial assets.
It has acknowledged many efforts by Indian authorities like the ‘passing of Insolvency and
Bankruptcy Code’ and ‘setting up of Insolvency and Bankruptcy Board of India (IBBI)’.
The ‘Insolvency and Bankruptcy Code’ came into force in India in which of the following years?
[a] 2013
*[b] 2016
[c] 2014
[d] 2001
[e] 2006
[Marks] 2
[Negative Marks] .5
[Difficulty] Easy

[SOLUTION]
 The Insolvency and Bankruptcy Code was enacted in 2016 to find a time-bound resolution for
ailing and sick firms, either through closure or revival, while protecting the interests of creditors.
 It was brought to reduce the delay in resolution of insolvency and bankruptcy due to multiplicity
of laws - Companies Act, SARFAESI Act, Sick Industrial Companies Act, and so on.
 A successful completion of the resolution process was expected to aid in reducing rising bad loans
in the banking system.
I.5) The Asian Development Bank (ADB) in its Asian Development Outlook (ADO) December 2017
update has lowered India’s GDP forecast for the current fiscal by 0.3% to 6.7 %, attributing it to tepid
growth in the first half, demonetisation and transitory challenges of tax sector reforms.
It has also revised downward the gross domestic product (GDP) outlook for next fiscal beginning from
March 2018 to 7.3% from 7.4% mainly due to rising global crude oil prices and soft growth in private
sector investment.
However, ADO supplement expects growth to pick up in remaining two quarters of 2017-18 as the
government is implementing measures to ease compliance with the new Goods and Services Tax (GST)
as well as bank recapitalisation.
Q.5) Where is the Asian Development Bank headquartered?
*[a] Manila
[b] Geneva
[c] Vienna
[d] New York
[e] Washington, D.C
[Marks] 2
[Negative Marks] .5
[Difficulty] Easy
[SOLUTION]
 The Asian Development Bank (ADB) is a regional development bank established on 19 December
1966, which is headquartered in the Ortigas Center located in Mandaluyong, Metro Manila,
Philippines.
 From 31 members at its establishment, ADB now has 67 members, of which 48 are from within
Asia and the Pacific and 19 outside.
 The ADB defines itself as a social development organization that is dedicated to reducing poverty
in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth,
 This is carried out through investments – in the form of loans, grants and information sharing –
in infrastructure, health care services, financial and public administration systems, helping

nations prepare for the impact of climate change or better manage their natural resources, as
well as other areas.

Q.6) Which of the following countries hold the largest proportion of shares in the Asian
Development Bank?
[a] China
*[b] Japan
[c] United States of America
[d] India
[Marks] 2
[Negative Marks] .5
[Difficulty] Easy
[SOLUTION]
 At the end of 2014, Japan holds the largest proportion of shares at 15.7%. The United States
holds 15.6%, China holds 6.5%, India holds 6.4%, and Australia holds 5.8%.
 The ADB was modelled closely on the World Bank, and has a similar weighted voting system
where votes are distributed in proportion with members' capital subscriptions.
 The president has a term of office lasting five years, and may be re-elected. Traditionally, and
because Japan is one of the largest shareholders of the bank, the president has always been
Japanese.

documents.
I.7) The government plans to use the Socio Economic and Caste Census 2011 data to identify individual
beneficiaries for all its schemes to ensure that benefits meant for the deprived population reach the
right people.
Presently, only the rural development ministry and a few departments use the Socio Economic and
Caste Census (SECC) data for their programmes. The note being prepared by the rural development
ministry would suggest the use of SECC data for all schemes including the National Food Security Act
and health programmes.

Besides the rural development ministry, some departments including health and electricity have
shown inclination to use SECC data instead of the poverty line estimates.
Q.7) Which of the following statement(s) is/are incorrect regarding the Socio-Economic Caste
Census 2011?
*[a] SECC 2011 is the second caste based Census of Independent India.
[b] SECC 2011 is a study of socio economic status of rural and urban households and allows ranking of
households based on predefined parameters.
[c] The purpose of the SECC 2011 is to help in the preparation of the BPL List and in the identification
of beneficiaries for welfare schemes.
[d] All the above
[Marks] 2
[Negative Marks] .5
[Difficulty] Medium
[SOLUTION]
 The first statement is incorrect as the SECC 2011 is the first Caste based census of the
Independent India.
 Earlier, caste based data was collected in 1931 Census.
 The Ministry of Rural Development commenced the Socio Economic and Caste Census (SECC) in
June 2011 through a comprehensive door to door enumeration across the country.
 This is the first time such a comprehensive exercise has been carried out for both rural and urban
India.
Why this SECC?
 We see that the current definition of poverty which was derived by identifying a basket of
essential goods and services and marking the point in India’s income distribution where that
basket could be purchased by an individual, was not comprehensive and was missing too much.
 For one, the numbers seemed absurdly low — set at Rs.816 per person per month in rural areas
and Rs. 1,000 in urban areas by the Planning Commission by updating the Tendulkar
methodology, the numbers amounted to a daily expenditure of around Rs.30, which caused
public indignation.
 A new committee was formed which drew a new line, but the Rangarajan methodology too
wound up at a poverty line not very different from the Tendulkar line.
 So, a broader and more dynamic definition of poverty seemed important.
Q.8) SECC uses certain parameters that is, 14 parameters of Automatic Exclusion, 5 parameters of
Automatic inclusion and grading of deprivation on the basis of seven criteria to identify the people
below poverty line. These parameters have been laid down by which of the following committees?
[a] Rangarajan Committee

*[b] S R Hashim Committee
[c] Tendulkar Committee
[d] Arvind Mayaram Committee
[e] Arvind Subramaniam Committee
[Marks] 2
[Negative Marks] .5
[Difficulty] Easy
[SOLUTION]
SECC uses the parameters laid down by the S R Hashim committee appointed by the erstwhile Planning
Commission of India i.e., automatic exclusion on the basis of 14 parameters, automatic inclusion on
the basis of 5 parameters and grading of deprivation on the basis of seven criteria.

Q.9) Which of the following Ministries/Agencies/Organizations has conducted the SECC 2011?
[a] National Sample Survey Organization
*[b] Ministry of Rural Development
[c] Census Commissioner
[d] CSO
[Marks] 2
[Negative Marks] .5
[SOLUTION]
 The Ministry of Rural Development commenced the Socio Economic and Caste Census (SECC) in
June 2011 through a comprehensive door to door enumeration across the country.
 SECC 2011 has three census components which were conducted by three separate authorities
but under the overall coordination of Department of Rural Development in the Government of
India.
 Census in Rural Area has been conducted by the Department of Rural Development (DoRD).
 Census in Urban areas is under the administrative jurisdiction of the Ministry of Housing and
Urban Poverty Alleviation (MoHUPA) (Now known as the Ministry of Housing and Urban Affairs).
 Caste Census is under the administrative control of Ministry of Home Affairs: Registrar General
of India (RGI) and Census Commissioner of India (CCI).
Criticism: Experts have criticised conduction of the census by the ministry of rural development (MRD)
rather than by the Registrar General, Census, or by the NSS. Both organisations have been doing
survey/census work for the last sixty-five years; MRD is rather late in this game, and is prone to political
compulsions rather than act as an objective, quasi-academic unit.

I.10) According to Census 2011, India has 55 million potential workers between the ages of 15 and 35
years in rural areas. At the same time, the world is expected to face a shortage of 57 million workers
by 2020. This presents a historic opportunity for India to transform its demographic surplus into a
demographic dividend.
In order to reap this demographic dividend and to drive this national agenda for inclusive growth, by
developing skills and productive capacity of the rural youth from poor families, the Ministry of Rural
Development is implementing a scheme. The scheme was launched in September, 2014.
There are several challenges preventing India’s rural poor from competing in the modern market, such
as the lack of formal education and marketable skills. This scheme bridges this gap by funding training
projects benchmarked to global standards, with an emphasis on placement, retention, career
progression and foreign placement.
Q.10) The given passage describes which of the following schemes?
[a] Swavalamban
[b] Pradhan Mantri Rojgar Protsahan Yojana
*[c] Deen Dayal Upadhyaya Grameen Kaushalya Yojana
[d] The Apprentice Protsahan Yojana
[e] Pandit Deendayal Upadhyay Shramev Jayate Karyakram
[Marks] 2
[Negative Marks] .5
[Difficulty] Medium
[SOLUTION]
 The Ministry of Rural Development implements Deen Dayal Upadhyaya Grameen Kaushalya
Yojana for developing skills and productive capacity of the rural youth from poor families.
 DDU-GKY follows a 3-tier implementation model. The DDU-GKY National Unit at MoRD functions
as the policy-making, technical support and facilitation agency.
 The DDU-GKY State Missions provide implementation support; and the Project Implementing
Agencies (PIAs) implement the programme through skilling and placement projects.

Q.11) What is the eligibility criteria for receiving skill based training under ‘Deen Dayal Upadhyaya
Grameen Kaushalya Yojana’?
[a] Rural Youth in the age group 20-35 Years and upto 45 Years in case of SC/ST/Women
[b] Rural Youth in the age group 15-35 Years and upto 40 Years in case of SC/ST/Women
[c] Rural Youth in the age group 15-35 Years and upto 38 Years in case of SC/ST/Women
*[d] Rural Youth in the age group 15-35 Years and upto 45 Years in case of SC/ST/Women
[e] Rural Youth in the age group 15-40 Years and upto 45 Years in case of SC/ST/Women
[Marks] 2
[Negative Marks] .5
[Difficulty] Medium
[SOLUTION]
The eligibility for this scheme is Rural Youth in the age group of 15-35 Years and upto 45 Years in case of
SC/ST/Women/PWD.

Q.12) Which of the following programs provides training-cum-placement for unemployed youth in
Jammu and Kashmir?
*[a] HIMAYAT
[b] ROSHINI
[c] URJA
[d] HIMMAT
[e] HOUSLA
[Marks] 2
[Negative Marks] .5
[Difficulty] Easy
[SOLUTION]
 Himayat is a training-cum-placement programme for unemployed youth in Jammu and Kashmir.
 Youth will be provided short-term training for at least 3 months, in a range of skills for which
there is good demand.
 At the end of the training, the youth are assured of a job and there is one-year post-placement
tracking to see how they are faring.
Who runs the programme?
 The programme has been developed and initiated by the Ministry of Rural Development.
 Himayat will be implemented by private companies or NGOs who will conduct the training and
will be responsible for placement of youth.
Who is eligible?
To be eligible for this scheme one must be:
• Any youth from J&K between the age of 18-35
• School/ college drop-outs will be given priority.
I.13) The Prime Minister’s Employment Generation Programme (PMEGP) is a programme to generate
continuous and sustainable employment opportunities in rural and urban areas. It does so through
setting up of new self-employment ventures/projects/micro enterprises.
It has the objectives of bringing together widely dispersed traditional artisans/ rural and urban
unemployed youth and give them self-employment opportunities to the extent possible, at their place
and to provide sustainable employment to a large segment of traditional and prospective artisans and
rural and urban unemployed youth in the country, so as to help arrest migration of rural youth to
urban areas.
Q.13) In which of the following years was the Prime Minister’s Employment Generation Programme
(PMEGP) announced?
[a] 2010
*[b] 2008
[c] 2015
[d] 2014
[e] 2009
[Marks] 2
[Negative Marks] .5
[Difficulty] Easy
[SOLUTION]
 PMEGP was announced on 15 August 2008.
 Ministry of Micro, Small and Medium Enterprises (MSME) is implementing Prime Minister’s
Employment Generation Programme (PMEGP), which is a major credit-linked subsidy
programme, aimed at generating self-employment opportunities through establishment of
micro-enterprises in the non-farm sector by helping traditional artisans and unemployed youth.
 Khadi and Village Industries Commission (KVIC) is the nodal agency at the national level.

 At the State/District level, State offices of KVIC, KVIBs and District Industry Centres(DIC) are the
implementing agencies in the States in the ratio of 30:30:40.
Q.14) PMEGP was introduced by merging the two schemes that were in operation till 31.03.2008.
What were the two schemes?
[a] Prime Minister's Rojgar Yojana (PMRY) and Swarnjayanti Gram Swarojgaar Yojana
[b] Rural Employment Generation Programme (REGP) and Swarna Jayanti Shahari Rojgaar Yojana
*[c] Prime Minister's Rojgar Yojana (PMRY) and Rural Employment Generation Programme (REGP)
[d] Rural Employment Generation Programme (REGP) and Swarnjayanti Gram Swarojgaar Yojana
[e] Prime Minister's Rojgar Yojana (PMRY) and Swarna Jayanti Shahari Rojgaar Yojana
[Marks] 2
[Negative Marks] .5
[Difficulty] Hard
[SOLUTION]
The Government of India had introduced a new credit linked subsidy programme called Prime
Minister's Employment Generation Programme (PMEGP) by merging the two schemes that were in
operation till 31.03.2008, namely Prime Minister's Rojgar Yojana (PMRY) and Rural Employment
Generation Programme (REGP) for generation of employment opportunities through establishment of
micro enterprises in rural as well as urban areas.
Who are eligible to apply?
 Any individual, above 18 years of age. At least VIII standard pass for projects costing above Rs.10
lakh in the manufacturing sector and above Rs.5 lakh in the business / service sector.
 The maximum cost of projects is Rs. 25 lakhs in the manufacturing sector and Rs. 10 lakhs in
the service sector.
 Only new projects are considered for sanction under PMEGP.
 Self Help Groups (including those belonging to BPL provided that they have not availed benefits
under any other Scheme), Institutions registered under Societies Registration Act,1860;
Production Co-operative Societies, and Charitable Trusts are also eligible.
 Existing Units (under PMRY, REGP or any other scheme of Government of India or State
Government) and the units that have already availed Government Subsidy under any other
scheme of Government of India or State Government are NOT eligible.
Q.15) Ministry of Micro, Small and Medium Enterprises (MSME) is implementing Prime Minister’s
Employment Generation Programme (PMEGP), which is a major credit-linked subsidy programme,
aimed at generating self-employment opportunities through establishment of micro-enterprises in
the non-farm sector by helping traditional artisans and unemployed youth.
As per the MSME Development Act, 2006, a manufacturing micro-enterprise is defined as an

enterprise having an investment in plant and machinery upto?
[a] Rs.10 lakhs
[b] Rs.12 lakhs
*[c] Rs.25 lakhs
[d] Rs.20 lakhs
[e] Rs.50 lakhs
[Marks] 2
[Negative Marks] .5
[Difficulty] Easy
[SOLUTION]
What is MSME?


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Summary Sheets for Economics and Social

Issues of Phase 2 of RBI Grade B 2018

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1. Our course comprises of Video/s + Concept notes + Summary Sheet + Worksheet +

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 How can the capacity of an economy be measured?

This capacity of an economy can be measured through different indicators.

GNP = GDP + Net Factor Income from Abroad

For open economy:

3. Net Domestic Product (NDP):

Net Domestic Product = GDP - depreciation

4. Net National Product (NNP):

Net National Product = GNP – Depreciation

 Economic Growth Rate

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a. Current prices (Nominal GDP)

 New Base Year 2011-12:

To measure the change of prices, various indicators can be used:

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Per Capita Income (PCI):

Purchasing Powers Parity (PPP):

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Gross Value Added (GVA):

What is the significance of GVA:

Personal Disposable Income (PDI):

Personal Disposable Income (PDI) ≡ PI – Personal tax payments – Non-tax payments.

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1. Economic Survey 2016-17:

2. International Monetary Fund:

Update: July, 2017

Update: June, 2017

4. Asian Development Bank:

Update: April, 2017

Update: May, 2017

8. Central Statistics Office

Update: June, 2017

India’s ranking in the world:

In terms of GDP at PPP:

Can GDP symbolize the overall development of a country?

1. Fill in the blanks

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So do not forget and attempt this Worksheet.

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 Dimensions of Human Development:

 How important is human development?

 Concept of Human Development:

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 The Human Development Report:

 The Human Development Index (HDI):

Components of Human Development Index:

 Human Development Report 2016:

 Salient features of the report (Where India stands):

 Inequality-Adjusted HDI (IHDI):

India related data:

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 Gender Inequality Index (GII)

India related data:

 Multidimensional Poverty Index (MPI)

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 India’s public expenditure on health:

 Gini Coefficient / Gini Index:

 India’s position compared to BRICS countries: