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ECONOMIC SURVEY
2021-2022
Summary by NEXT IAS
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Content
Ch. No. Chapter Name Page No
1 State of the Economy 3
2. Fiscal Developments 6
3. External Sector 12
4. Monetary Management and Financial Intermediation 16
5. Price and Inflation 19
6. Sustainable Development and Climate Change 21
7. Regulatory Forbearance: An Emergency Medicine, Not Staple Diet 26
8. Innovation: Trending Up But Needs Thrust, From The Private Sector 29
9. Jay Ho: Ayushman Bharat's Jan Arogya Yojana (Jay) And Health Outcomes 32
10. The Bare Necessities 34
11. Tracking Development through Satellite Images and Cartography 41

Economic Survey 2021-2022
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Summary by NEXT IAS
01 STATE OF THE ECONOMY

CHAPTER
Introduction 2022-23.
• COVID-19 pandemic: The last two years have been • Pickup in private sector investment: The year ahead poised
difficult cor the world economy on account of the COVID-19 for a pickup in private sector investment with the financial
pandemic. system in good position to provide support for economy’s
 Repeated waves of infection, supply-chain disruptions revival.
and, more recently, inflation have created particularly • Projection: These perditions are comparable with World
challenging times for policy-making. Bank and Asian Development Bank’s latest forecasts of real
• Analyzing the aspects Putting the spotlight on the way GDP growth of 8.7 percent and 7.5 percent respectively for
forward after the pandemic, the Economic Survey of 2021- 2022-23.
22 has analysed aspects such as inflation, global liquidity • As per IMF’s latest World Economic Outlook projections:
measures, and rising energy prices to detail the risks for the India’s real GDP is projected to grow at 9 percent in 2021-22
economy going ahead. and 2022-23 and at 7.1 percent in 2023-2024, which would
• It has also taken stock of growing revenues to indicate the make India the fastest growing major economy in the world
availability of fiscal space, should the government see the for all 3years.
need to provide additional support. • Agriculture and allied sectors: It is expected to grow by 3.9
• The Survey has noted that growth in 2022-23 will be percent; industry by 11.8 percent and services sector by 8.2
supported by widespread vaccine coverage, gains from percent in 2021-22.
supply-side reforms and easing of regulations, robust export • On demand side consumption is estimated to grow by
growth, and the availability of fiscal space to ramp up capital 7.0 percent, Gross Fixed Capital Formation (GFCF) by 15
spending. percent, exports by 16.5 percent and imports by 29.4 percent
in 2021-22.
Key highlights • Macroeconomic stability indicators: They suggest that the
• Growth: Indian economy estimated to grow by 9.2 percent Indian Economy is well placed to take on the challenges of
in real terms in 2021-22 (as per first advanced estimates) 2022-23.
subsequent to a contraction of 7.3 percent in 2020-21. c Investment, as measured by Gross Fixed Capital
• GDP projected to grow by 8- 8.5 percent in real terms in Formation (GFCF) is expected to see strong growth of
15 per cent in 2021-22 and achieve full recovery of pre-

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Summary by NEXT IAS
pandemic level. safety-nets to cushion the impact on vulnerable sections

• Buffer against possible global liquidity tapering of society and the business sector, significant increase in
Combination of high foreign exchange reserves, sustained capital expenditure to spur growth and supply side reforms
foreign direct investment, and rising export earnings will for a sustained long-term expansion.
provide adequate buffer against possible global liquidity • Government’s flexible and multi-layered response: It is
tapering in 2022-23. partly based on an “Agile” framework that uses feedback-
• Economic impact of “second wave”: It was much smaller loops, and the use of eighty High Frequency Indicators (HFIs)
than that during the full lockdown phase in 2020-21, though in an environment of extreme uncertainty.
health impact was more severe.  Agile is an iterative approach to project management and
• Government of India’s unique response: It comprised of software development that helps teams deliver value to
their customers faster and with fewer headaches.
Gross Domestic Output (Constant Prices, Base Year: 2011-12)
Vaccine economics • India is emphasizing on supply side reforms: rather than
• Buffer against economic disruptions: The Survey says the a total reliance on demand management. These supply
progress of vaccination should be seen not just as a health side reforms include deregulation of numerous sectors,
response indicator, but also as a buffer against economic simplification of processes, removal of legacies like
disruptions caused by repeated pandemic waves. retrospective tax, privatization, production linked incentives
• Private consumption: This is based in part on the assumption and so on.
that private consumption “is poised to see stronger recovery
• Barbell strategy: Faced with all uncertainty, the government
with rapid coverage in vaccination and faster normalisation of
of India opted for a “barbell strategy” that combined a
economic activity”, and the importance of vaccination in the
bouquet of safety nets to cushion the impact on vulnerable
re-opening of contact-intensive sector.
sections of society/business. It is a flexible policy response
• Macro economic indicator: Vaccination is not merely a
based on a Bayesian updating of the information.
health response but is critical for opening up the economy and
 Other leg of the barbell strategy is to cushion for
therefore, it should be treated for now, as a macro economic
indicator. Over the course of a year, India delivered 157 crore unpredictable negative outcomes by providing safety
doses. nets.

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Summary by NEXT IAS
Share of Sectors in Nominal GVA

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Summary by NEXT IAS
02 FISCAL DEVELOPMENTS
CHAPTER
Introduction businesses, and the world’s largest food subsidy programme

• Over the last two years, fiscal policy has remained a significant targeting 80.96 crore beneficiaries enabled the creation of
tool for addressing the economic fallout of the pandemic. safety-nets.
The Government of India has adopted a calibrated fiscal • Measures like Production Linked Incentives (PLI), steps
policy approach to the pandemic, which has the flexibility to encourage investment in the infrastructure sector and
of adapting to an evolving situation in order to support the enhancing capital expenditure by the Central and state
vulnerable sections of society/firms and enable a resilient Governments
recovery. India’s unique agile policy response differed from • The Union Budget 2021-22 had enhanced the budget outlays
the waterfall strategy of introducing front-loaded stimulus for the more productive capital expenditure. The Government
packages, adopted by most other countries in 2020. Such budgeted for a 34.5 per cent growth in capital expenditure
an adaptive approach has now been widely accepted in the over 2020-21 BE – with emphasis on railways, roads, urban
policy circles (IMF Fiscal Monitor October 2021). transport, power, telecom, textiles and affordable housing
 The Waterfall approach entails a detailed, initial amid continued focus on the National Infrastructure
assessment of the problem followed by a rigid upfront Pipeline.
plan for implementation. This methodology works on the • Budget 2021-22 launched PLI schemes for 13 sectors, with
premise that all requirements can be understood at the an outlay of `1.97 lakh crore, for a period of 5 years starting
beginning and therefore pre-commits to a certain path of from 2021-22.
action. This is the thinking reflected in five-year economic
plans, and rigid urban master-plans. Performance of Fiscal Indicators during 2021-22
• The fiscal deficit of the Central Government at end November
Fiscal Policy Strategy in the aftermath of the Pandemic 2021 stood at 46.2 percent of the BE compared to 135.1 per
Outbreak cent during the same period in 2020-21 and 114.8 per cent
during the same period in 2019-20.
• During this period both fiscal deficit and primary deficit stood
at levels much below the corresponding levels in the previous
two years.
Revenue Collection
• Net tax revenue to the Centre, which was envisaged to grow
at 8.5 per cent in 2021-22 BE relative to 2020-21 PA, grew
at 64.9 per cent during April to November 2021 over April to
November 2020 and at 51.2 per cent over April to November
2019.
• Within direct taxes, personal income tax has grown at 47.2
percent over April-November 2020 and at 29.2 per cent
• The agile fiscal policy response adopted by the Government
over the April-November 2019. The corporate income tax
of India encompassed a change in mix of the stimulus
registered a growth of 90.4 per cent over April-November
measures amidst an uncertain evolution of the pandemic
2020 and 22.5 per cent over April-November 2019.
situation.
• The indirect tax receipts have registered a YoY growth of 38.6
• In the initial phase of the pandemic, the fiscal policy focused
per cent in the first eight months of this fiscal year. The rise in
on building safety-nets for the poor and vulnerable sections
imports of goods and services ensued due to the recovery in
of society to hedge against the worst-case outcomes.
both manufacturing sector and consumption demand, have
• Stimulus measures such as direct benefit transfers to
led to a rise in customs collection.
the vulnerable sections, emergency credit to the small

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Summary by NEXT IAS
• The revenue from excise duty registered an YoY growth of percent of GDP for 2021-22.
more than 60 per cent in 2020-21 PA.
• The GST collections for the Center were 61.4 percent of BE
Trends in Receipts
during April to November 2021. Gross GST collections saw • The Budget 2021-22 targeted significantly high growth in
an increase of 61.5 per cent over April to December 2020 non-debt receipts of the Central Government, which was
and 33.7 per cent over April to December 2019. driven by robust growth in all its components.
• The non-tax revenue collections up to November 2021 Tax Revenue

registered an YoY increase of 79.5 per cent. The key
component of dividends and profits during this period was
surplus transfer from RBI to the Central Government.
• The non-debt capital receipts include recovery of loans and
disinvestment receipts. The Budget 2021-22 had envisaged
to mobilize 1.75 lakh crore from disinvestment proceeds this
year. So far, the government has been able to raise 9330
crore (as on 24 January 2022) from disinvestment.
Expenditure
• The Budget 2021-22 envisaged a growth of 16.7 per cent in

gross tax revenue (GTR) over the revised estimates (RE) of
2020- 21.
• GTR was estimated at 22.17 lakh crore for 2021-22 BE, which
was 9.9 percent of the GDP.
• The budgeted growth in GTR was estimated to be led by 22.4
per cent growth in direct taxes and 11.4 per cent growth in
• The total expenditure of the Government increased by 8.8 indirect taxes over the revised estimates of 2020-21.
per cent during April to November 2021 and stood at 59.6 • Broadly, 50 percent of GTR was estimated to accrue from
percent of Budget Estimate. direct taxes and the remaining 50 per cent from indirect
• While the revenue expenditure has grown by 8.2 percent taxes.
during the first eight months of 2021-22 over the same period
in 2020-21, the non- interest revenue expenditure grew by 4.6
Non-Tax Revenue
per cent over April to November 2020. • The Budget for 2021-22 envisaged generation of 2.43 lakh
crore of non-tax revenue, 16.8 percent higher than 2020-21
• During April to November 2021, the expenditure on major
PA.
subsidies stood at 2.31 lakh crore.
• Food subsidy under the Pradhan Mantri Garib Kalyan Non-Debt Capital Receipts
Ann Yojana – Phase III being the major component of total
• The Budget for 2021-22 has envisaged generation of 1.88
subsidies was at two third of its BE i.e. 1.47 lakh crore during
lakh crore of non-debt capital receipts, comprising 1.75 lakh
the first eight months of 2021-22.
crore of disinvestment receipts.
• During April to November 2021, capital expenditure
• In order to minimize the presence of the Government in the
registered a growth of 13.5 per cent over April to November
PSEs across all sectors of the economy, the Government has
2020 and 28 per cent over April to November 2019.
adopted a new disinvestment policy for Aatmanirbhar Bharat
• The budgeted fiscal deficit for 2020-21 was revised from in February 2021.
3.5 per cent in BE to 9.5 per cent in RE. The fiscal deficit for
2020-21 Provisional Actuals stood at 9.2 percent of GDP i.e. Evolution of the Disinvestment Policy of the
lower than RE. Government of India
• The Medium- Term Fiscal Policy (MTFP) Statement presented • The New Public Sector Enterprise (“PSE”) Policy for
with Budget 2021-22 envisaged a fiscal deficit target of 6.8 Aatmanirbhar Bharat was notified on 4th February 2021.

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Summary by NEXT IAS
• Under the New PSE Policy, public sector commercial Transfer to States
enterprises have been classified as Strategic and Non- • The Fifteenth Finance Commission has recommended a total
Strategic sectors.
Post Devolution Revenue Deficit grant of 1.18 lakh crore to 17
• Following four broad strategic sectors have been delineated States in the financial year 2021-22, of which an amount of
based on the criteria of national security, energy security,
98,710 crores has already been released, as on 6th January
critical infrastructure, provision of financial services and
2022.
availability of important minerals- (i) Atomic Energy, Space
and Defense; (ii) Transport and Telecommunication; (iii) • With regard to the grants to Local Bodies, the XV-FC had
Power, Petroleum, Coal and other minerals; and (iv) Banking, recommended that urban areas are grouped into two broad
Insurance and Financial Services. categories for recommending grants to urban local bodies:
(a) Category-I cities: urban agglomerations/cities with more
Asset Monetization than one million populations and (b) Category-II cities: other
• The National Infrastructure Pipeline (NIP) envisaged a than million-plus cities.
projected infrastructure investment of 111 lakh crores during
• The Commission has recommended that for cities with
FY 2020 to FY 2025.
million plus population (Million-Plus cities), 100 per cent of
• The National Monetisation Pipeline (NMP) has been
the grants are performance-linked through the Million-Plus
developed by NITI Aayog in consultation with infrastructure
line ministries envisages to serve as an essential roadmap Cities Challenge Fund (MCF).
for the asset monetisation of various brownfield infrastructure • The Commission has recommended that 60 percent of
assets across roads, railways, shipping, aviation, power, the grants to rural local bodies and for urban local bodies
telecom, oil & gas, and warehousing sectors. in non-Million-Plus cities should be tied to supporting and
• The NMP estimates aggregate monetization potential of 6.0 strengthening the delivery of two categories of basic services:
lakh crores through core assets of the Central Government, (a) sanitation, maintenance of 'Open Defecation Free' status
over a four-year period, from FY 2022 to FY 2025. (for Rural Local Bodies), solid waste management and
• The top 5 sectors which capture around 83 per cent of attainment of star ratings as developed by Ministry of Housing
the aggregate pipeline value include: Roads (27 per cent) and Urban Affairs (for non- million plus cities / Category-II
followed by Railways (25 percent), Power (15 percent), oil & Cities / Towns; (b) drinking water, rain water harvesting and
gas pipelines (8 per cent) and Telecom (6 percent). Around
water recycling (both for Rural Local Bodies and Urban Local
15 percent of assets with an indicative value of ` 0.88 lakh
Bodies).
crore are envisaged to be rolled out in the current financial
year (FY 2021-22).
Central Government Debt
• In pursuance of the Budget announcement, ‘National Land
• During the year, a major challenge in the aftermath of
Monetisation Corporation’ (NLMC) is being incorporated
COVID-19 pandemic was the management of debt, both for
as a 100 per cent Govt of India owned entity with an initial
authorized share capital of 5000 crores and subscribed the Central and State Governments.
share capital of 150 crores. • Public Debt accounted for 89.9 per cent of total liabilities,
while Public Account Liabilities, which include National Small
Trends in Expenditure Savings Fund, State Provident Funds, Reserve Funds and
• In the wake of the pandemic, the additional expenditure Deposits and other Accounts, constituted the remaining 10.1
requirements led to a YoY growth of more than 30 percent in
per cent.
the revenue expenditure of the Government in 2020-21 PA.
• The total liabilities of the Central Government, as a ratio of
• The emphasis on capital expenditure was envisaged to
GDP, which were relatively stable over the past decade, have
continue in 2021-22 BE to reach a budget estimate of 2.5
percent of GDP. risen sharply in 2020-21. The Debt-GDP is however expected
to follow a downward trajectory in the upcoming years.
• As a proportion of total expenditure, capital expenditure has
been estimated to increase from 12.1 per cent in 2020-21 PA • The recently launched Retail Direct Scheme by RBI will be
to 15.9 per cent in 2021-22 BE. instrumental in channelizing the savings of middle class,
• The higher capital expenditure with a focus on infrastructure small businessmen and senior citizens directly into risk free
spending in 2021-22 BE will have a multiplier effect on the government securities.
ongoing economic recovery. • Under the scheme, retail investors will be able to open
• The Budget 2021-22 focuses on improving fiscal transparency, a Retail Direct Gilt (RDG) account using an online portal
as the Extra Budgetary Resources (EBR) for 2021-22 have through which they can directly invest a minimum of `10,000
been estimated at 30,000 crores. and maximum of `2 crore per security.

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Summary by NEXT IAS
State Finances  Enhanced limit of borrowing for the States

• The Gross Fiscal Deficit of States is estimated to cross the  Loan to States in lieu of GST Compensation shortfall
Fiscal Responsibility Legislation (FRL) threshold of 3 percent  Scheme for Special Assistance to States for Capital
of GDP during 2020-21 RE and 2021-22 BE. Expenditure
• The Revenue Deficit of the States also increased from 0.1 per
cent of GDP in 2018-19 to 2 percent of GDP in 2020-21 (RE).
General Government Finances
• This relaxation in borrowing limits was allowed on account of • The General Government liabilities as a proportion of GDP
the additional expenditure needs and constrained revenues increased steeply during 2020-21 on account of the additional
of the States due to COVID-19. borrowings made by Centre and States due to the shortfall in
revenue and higher expenditure requirements arising out of
• The net borrowing ceilings of the States were enhanced to
COVID-19 pandemic.
5 per cent of GSDP of the States for the year 2020-21 and 4
percent of GSDP of the States for 2021-22.
POLICY MEASURES TO ENHANCE THE EFFICIENCY OF
• Both Gross Fiscal Deficit and Revenue Deficit for the States GOVERNMENT SPENDING
are budgeted to decline in 2021-22 from the high levels they
• Government e-Marketplace (GeM)
reached in 2020-21.
 The Government in 2016 had set up a dedicated e-market
• In addition to the net borrowing ceilings fixed for the States,
known as Government e-Marketplace (GeM) for purchase
XV-FC had recommended performance based additional
of certain standard day to day use goods.
borrowing space of 0.50 per cent of Gross State Domestic
 The General Financial Rules 2017 mandates all Ministries
Product (GSDP) to States in the power sector.
and Departments to procure Goods and Services
Measures taken by the Centre to support the States available on GeM from GeM.
during 2021-22  The use of this e-marketplace has resulted in a substantial
• The Central Government has taken consistent steps to impart reduction in prices in comparison to the rates used earlier,
unflinching support to the States in the challenging times of with average prices falling by at least 15-20 percent, up to
the pandemic. These measures are as follows: 56 percent.

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Summary by NEXT IAS
New guidelines for reforms in Public Procurement and years, they have been given exemption from filing income
Project Management tax returns if they only have pension income and interest
• The Government issued new guidelines for procurement and income.
project management in October 2021, which have expanded  The time limit for reopening of assessment has also been
the ambit of selecting bidders for executing government reduced from six years to three years.
projects and procuring goods and services. The key changes  Certain non-resident persons have also been exempted
in the procurement process are as follows: from the requirement of furnishing of income tax returns,
 Quality-cum-Cost Based Selection (QCBS) for Works subject to fulfillment of prescribed conditions.
and Non-Consultancy Services: The revised guidelines  To reduce litigation, Finance Act 2021 has introduced a
now allow QCBS for the selection of bidders for works and special mechanism for dispute resolution to reduce the
non-consultancy services as well (where estimated value disputes particularly for small and medium taxpayers
of procurement does not exceed 10 crore). having
 Fixing of Evaluation/ Qualification and Scoring
Measures to boost investment
Criteria under QCBS for Works and Non- Consultancy
• The Taxation Laws (Amendment) Act 2021 has provided
Services: In order to ensure quality, the procuring entities
that no tax demand shall be raised in future on the basis of
now have the freedom to amend the specifications based
the said retrospective amendment for any offshore indirect
on their requirements and make any criteria used in
transfer of Indian assets if the transaction was undertaken
evaluation mandatory.
before 28th May 2012.
 Stringent deadlines for making payments: The new
guidelines stipulate timely release of payments of 75 per • Incentives have been provided by Finance Act 2020 to
cent or more of bills raised within 10 working days of the encourage foreign investments of Sovereign Wealth Funds
submission of the bill. The remaining bill payment is to and Pension Funds into the infrastructure sector of India.
be made after final checking within 28 working days. The • In order to incentivize start-ups, the eligibility for claiming tax
procuring entity is also liable to pay interest if the payment holiday has been extended for start-ups incorporated till 31st
of bills is delayed by over 30 working days. March 2022 by the Finance Act 2021.
 Single bid rejection: The new rules stipulate public • The capital gains exemption for investment in start-ups has
authorities to consider single bid as valid provided that the also been extended for one more year till 31st March 2022.
procurement was satisfactorily advertised, sufficient time • Various tax incentives have been provided for units located in
was given for submission of bids, the qualitative criteria the International Financial Services Centre (IFSC) in order to
were not unduly restrictive and prices are reasonable in make it a hub for financial services in the world.
comparison to market values.
 Fixed Budget based Selection for Consultancy Promoting digital transactions
Services: Under this method, the cost of consulting • Through the Finance Act 2021, the monetary threshold of
services shall be specified as an affixed budget in getting books of accounts audited has been increased to Rs
the tender document itself. Because of the basic and 10 crores in case of businesses whose total turnover or gross
repetitive nature of the consultancy work, its budget can receipts made in cash does not exceed 5 percent of the total
be reasonably approximated. turnover or gross receipts and the total expenditure including
purchases made in cash does not exceed 5 percent of the
Direct Tax measures by CBDT during 2021-22 total expenditure during the previous year.
• Ease of compliance for taxpayers:
 Most of the processes and compliance requirements Measures undertaken to curb Tax Evasion and
have been shifted to online platforms and the need for the promote the widening of tax-base
taxpayers to physically visit the Income Tax Offices has • For widening the tax net of Tax Deduction at Source (TDS)
been eliminated or minimized. and Tax Collection at Source (TCS) several new transactions
 A new e-filing portal was launched in 2021 with improved were brought into its ambit.
features such as a new taxpayer- friendly portal integrated • In order to promote the furnishing of income-tax returns, a
with immediate processing of ITR return, pre-filled returns, special provision has been inserted to the Act to deduct/
free of cost ITR preparation software, new call centre for collect tax at higher rates in case of certain persons who have
taxpayer assistance including chatbot/ live agent and not filed their income tax return for both of the preceding two
mobile app function. previous years and the tax deducted/ collected was greater
 To ease the burden of senior citizens above the age of 75 than Rs 50,000 in each of the two years.

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Summary by NEXT IAS
Indirect tax measures by CBIC during 2021-22 • To provide relief to the taxpayers from the high amount of
(Customs): late fee accumulated on pending GSTR-3B returns, a late fee
• The Most Favored Nations rates of Basic Custom Duties amnesty scheme has been brought out in respect of pending
have been increased in recent years on such items which returns in FORM GSTR-3B for the tax periods from July, 2017
are being manufactured in India or which domestic industry to April, 2021.
aspires to manufacture. • To reduce the burden of late fee on smaller taxpayers, late
• Under the Phased Manufacturing Plan (PMP) in respect of fee structure (under section 47 of the CGST Act) has been
significant products like mobile phones, other electronic rationalized for prospective tax periods from June 2021
goods like TVs, electric vehicles, batteries, solar panel etc, onwards by aligning the upper cap of late fee with tax liability/
the Basic Custom Duties (BCD) rates in respect of different turnover of the taxpayers.
stages of the value chain of these products are calibrated in • Retrospective amendment of section 50 of CGST Act, 2017
a manner that encourages gradual deepening of domestic was done to provide interest payment on net cash basis with
value addition. . effect from 01.07.2017 to facilitate the taxpayers and to help
• CBIC has launched the use of ECTS (Electronic Cargo in removing ambiguity and disputes regarding payment of
Tracking System) in Oct 2021 to ensure swift and secure interest on gross tax basis or net cash basis.
movement of dutiable goods from port of import to customs • Instead of quarterly requirement to file FORM GST ITC-04
warehouse. return, containing details of all goods sent to job worker
• The scheme of Direct Port Delivery (DPD) has been and received from job worker, it has been made an annual
revamped to a Customs document based DPD from the requirement for taxpayers having annual aggregate
previous client based DPD. turnover in preceding financial year is up to ` 5 crores and
once in six months for taxpayers having annual aggregate
• CBIC has introduced a Risk Management System (RMS) to
turnover in preceding financial year above ` 5 crores.
facilitate faster drawback disbursal for genuine exporters and
to help in better checking of fraudulent drawback claims on Good and Services Tax(GST)
exports.
• GST was introduced through the 101st Constitution
• CBIC has launched the Indian Customs Compliance Amendment Act, 2016.
Information Portal (CIP) for providing free access to
• A Single Tax: The Government of India introduced the
information on all Customs procedures and regulatory
GST under their “one nation, one tax” reform. It is a single
compliance for nearly 12,000 Customs Tariff Items.
tax levied on the supply of goods and services right
• To address the shortage of containers across the Country, from the manufacturer to the consumer and essentially
CBIC issued instructions to enable more availability of replaces multiple indirect taxes.
containers for exports. • Framework: Under the GST framework: (i) the center
• Remission of Duties and Taxes on Exported Products will levy and collect the Central GST, (ii) the states will
Scheme enables the issue of Export Rebate in the form of a levy and collect the State GST, on supply of goods and
transferable duty credit/ electronic scrip (e-scrip) which will services within a state.
be maintained in an electronic ledger by the CBIC. • Integrated GST (IGST): The center will levy the Integrated
• This revamped end-to-end automated scheme aims to GST (IGST) on inter-state supply of goods and services,
provide a boost to Indian exports by providing a level playing and apportion the state’s share of tax to the state where
field to domestic industry abroad. the good or service is consumed.
• The GST Council is a Constitutional body chaired by
Changes in Goods and Services Tax: the Union Finance Minister and comprises the Minister
of State for Finance/ Revenue and finance ministers of
all states. It makes recommendations on all important
issues related to the Goods and Services Tax.

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Summary by NEXT IAS
03 EXTERNAL SECTOR
CHAPTER
Introduction • The impact on trade-in value terms varied significantly across

• External trade recovered strongly in 2021-22 after the different types of goods. Trade of manufacturing goods,
pandemic-induced slump of the previous year, with strong agricultural products, and fuels & mining products witnessed
capital flows into India, leading to a rapid accumulation of positive and higher year-over-year (y-o-y) growth.
foreign exchange reserves. The resilience of India’s external • The trade value of fuels and mining products was boosted by
sector during the current year augurs well for growth revival in a four-fold rise in natural gas prices. Among manufactured
the economy. However, the downside risks of global liquidity goods, some sectors showed a strong y-o-y increase,
tightening and continued volatility of global commodity including iron and steel, electronic components, and
prices, high freight costs, coupled with the fresh resurgence pharmaceuticals while others such as automotive products
of COVID-19 with new variants may pose a challenge for and telecommunications equipment showed stagnation or
India during 2022-23. decline, reflecting the recent shortage of semiconductors.
• About global financial conditions, in 2021, inflation picked
Major Highlights
up globally as economic activity revived with the opening
• USA followed by UAE and China remained the top export up of economies. Inflation in the US touched 6.8 percent in
destinations in April-November, 2021, while China, UAE, November 2021, the highest since 1982, driven largely by
and the USA were the largest import sources for India. energy and food prices.
• India’s current account balance turned into a deficit • This may result in tightening of financial conditions, adversely
of 0.2 percent of GDP in the first half (H1) of 2021-22, affecting capital flows, putting pressure on the exchange rate,
largely led by a deficit in the trading account. and slowing down growth in emerging economies. Therefore,
• India’s external debt rose to US$ 593.1 billion as of end- the revival in inflation across the world now poses risks from
September 2021, from US$ 556.8 billion a year earlier, both a tighter global liquidity condition and exchange rate
reflecting additional SDR allocation by IMF, coupled with volatility in global currency.
higher commercial borrowings.
• India was the fourth-largest forex reserves holder in the
DEVELOPMENTS IN INDIA’S MERCHANDISE TRADE
world after China, Japan, and Switzerland.
• India’s external sector is resilient to face any unwinding
of the global liquidity arising out of the likelihood of
faster normalization of monetary policy by systemically
important central banks, including the Fed, in response
to elevated inflationary pressures.
GLOBAL ECONOMIC ENVIRONMENT

The COVID-19 pandemic continued to impact the global
economic environment during 2021.
• International Monetary Fund (IMF) in its World Economic Merchandise Exports
Outlook (WEO) October 2021 edition projected higher growth • During 2021-22 (April-December), the merchandise exports
of global trade volume in goods and services of 9.7 percent recorded growth of 49.7 percent to US$ 301.4 billion,
in 2021, moderating to 6.7 percent in 2022, in line with the compared to the corresponding period of last year and 26.5
projected global recovery. World Trade Organization (WTO) percent over 2019-20 (April-December), exceeding the pre-
in its October 2021 release, also upgraded its forecast for pandemic levels.
global merchandise trade volume growth to 10.8 percent in • Out of an ambitious export target of US$ 400 billion set for
2021, followed by a 4.7 percent rise in 2022. 2021-22, India has already attained more than 75 percent of

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Summary by NEXT IAS
it by exporting goods worth US$ 301.4 billion, which is higher and auto components, pharmaceutical drugs, telecom &
than the export target of US$ 300 billion set for the April- networking products, electronic/ technology products, etc.,
December period of 2021-22. are some of the sectors covered under the PLI scheme.
• The rise in exports is contributed by high growth in petroleum, The scheme is expected to give a push to both domestic
oil, and lubricants (POL) exports (constituting about 15 manufacturing capabilities and exports.
percent of total exports) as well as non-POL exports, • Infusion of capital in EXIM Bank: The government of
indicating the broad-based nature of expansion. India infused capital of `750 crore in Export-Import Bank of
• Owing to the rise in global crude oil prices, petroleum India (EXIM Bank) during the current financial year 2021-22
products continued to be the most exported commodity through subscription to its share capital.
in April-November 2021, whose exports have more than • The export promotion schemes such as Trade Infrastructure
doubled and their share rose to 14.9 percent from 8.8 percent for Export Scheme (TIES), Market Access Initiatives (MAI),
in the corresponding period a year earlier. Special Economic Zone (SEZ) scheme, Emergency Credit
• The exports of aluminum and its products are a newly added Line Guarantee Scheme (ECLGS) and Advance Authorization
commodity in the list of top ten exported commodities during Scheme continue to provide support to trade infrastructure
April-November, 2021. and marketing.
• India has initiated its trade agreement negotiations for: Enabling an efficient Logistics eco-system to boost
 Comprehensive Economic Cooperation Agreement exports
(CECA) between India and Australia.
• India has made substantial progress in trade-related
 FTA with European Union (EU).
logistics, reflected in leading global indices. India
 Comprehensive Economic Partnership Agreement (CEPA)
scored 90.3 percent in 2021 in United Nations Economic
with Canada and
and Social Commission for Asia Pacific’s (UNESCAP)
 CEPA with UAE. In addition, India is reviewing its existing
latest Global Survey on Digital and Sustainable Trade
trade agreements such as the CECA with Singapore and
Facilitation.
ASEAN-India Trade in Goods Agreement (AITIGA) with
• Transparency index got a 100 percent score in 2021,
ASEAN, among others.
while paperless trade and formalities got 96 percent.
Major Schemes & Initiatives to boost exports
The impressive performance of India’s exports may be attributed Pradhan Mantri Gati Shakti National Master Plan
to various schemes and initiatives taken by the Government to (NMP)
boost exports and to reduce the adverse impact of COVID-19.
• Approved in October 2021, PM Gati Shakti NMP aims
Some of these schemes are as under:
to provide multimodal connectivity to various economic
• Remission of Duties and Taxes on Exported Products zones and integrate the infrastructure linkages holistically
(RoDTEP): This new scheme reimburses currently un- for seamless movement of people, goods & services to
refunded Central, State, and Local taxes and duties incurred improve logistics efficiency.
in the process of manufacture and distribution of exported
• Gati Shakti will bring 16 Ministries together for integrated
products and thereby provides a level playing field to
planning and coordinated implementation of infrastructure
domestic industry abroad. Major components of taxes
connectivity projects like Bharatmala, Sagarmala, inland
covered are electricity duty, value-added tax (VAT) on fuels waterways, UDAN, etc.
used in transportation/ distribution, mandi tax, stamp duty,
• It will also leverage technology extensively including
etc.
spatial planning tools with ISRO imagery developed by
• Developing District as Export Hub: Under this initiative, the BiSAG-N (Bhaskaracharya National Institute for Space
focus is to make districts active stakeholders in the promotion Applications and Geoinformatics).
of exports of goods/services produced/ manufactured in the
• This will boost economic growth, attract foreign investment
district. District Export Promotion Committees (DEPCs) have and create multiple employment opportunities.
been set up in each district. This scheme would help in
diversifying the portfolio of export commodities.
• Production-Linked Incentive (PLI) scheme: An outlay of Merchandise Imports
`1.97 lakh crore (US$ 26 billion) was announced in Union • The merchandise imports grew at the rate of 68.9 percent
Budget 2021-22 for the Production-Linked Incentive (PLI) to US$ 443.8 billion in April-December, 2021 over the
scheme for 14 key sectors starting from 2021-22. Automobiles corresponding period of last year and 21.9 percent over April
December 2019.

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• Among major import commodities, crude petroleum imports • Among the top ten countries for import origin, China, UAE,
more than doubled to US$ 73.3 billion in April-November, and the USA were the top import sources for India in April-
2021 compared to last year and continues to be the highest November, 2021, with China's share reducing to 15.5 percent
imported commodity. Gold imports registered a sharp rise from 17.7 percent in the corresponding period a year earlier –
to US$ 33.2 billion (8.7 percent share), from US$ 12.3 billion reflecting increased diversification of India's import sources.
(5.6 percent share) in the corresponding period a year earlier,
returning to the second position.
Top ten Import Sources in 2021-22 (April-November) [By Share in Per cent]
TRADE-IN SERVICES BOP BALANCE AND FOREIGN EXCHANGE RESERVES

• Services Exports • The current account deficit in the BoP determines how much
 India’s services exports recorded growth of 18.4 percent net capital inflows into the country can be absorbed or used
to US$ 177.7 billion during 2021-22 (April-December). for growth. It is expected to be within manageable limits
• Services Imports during 2021-22. From a historical perspective, India can
 Services imports rose by 21.5 percent to US$ 103.3 billion sustain a current account deficit of 2.5-3.0 percent of GDP
in 2021-22 (April-December) from the corresponding without getting into an external sector crisis.
period a year earlier. • There was a massive increase in India’s foreign exchange
Note: As per the Migration and Development Brief 35, World reserves during 2021-22. The forex reserves stood higher at
Bank (November 2021), India continues to be the largest re- US$ 633.6 billion as of end-December 2021.
mittance recipient country in the world in 2021 (in current US
dollar terms) and has been so since 2008. NET INTERNATIONAL INVESTMENT POSITION
• Net International Investment Position (IIP) is the difference
CURRENT ACCOUNT BALANCE between the value of financial assets of residents of an
• After witnessing a surplus in H1: FY 21, India’s current economy that are claims on non-residents and the liabilities
account balance flipped into a deficit of US$ 3.1 billion (0.2 of residents of an economy to non-residents at a point in time.
percent of GDP) in H1: FY 22, on the back of a sharp increase It represents either a net claim on or a net liability to the rest
in the merchandise trade deficit. of the world.

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• India’s net IIP stood at (-) 11.3 percent of GDP (US$ -332 • Accordingly, being the second largest component, Indian
billion) as of end-September 2021. rupee-denominated debt provides significant insulation from
exchange rate fluctuations.
EXTERNAL DEBT
• India’s external debt as of end-September 2021, estimated at Conclusion
US$ 593.1 billion. • India’s external debt continues to be below what is estimated
• Commercial borrowings, the largest component of external to be optimal for an emerging market economy, while various
debt, at US$ 218.8 billion, recorded a quarter-over-quarter external sector vulnerability indicators improved over the
(q-o-q) positive growth of 2.5 percent over the level a quarter recent years, pointing towards the resilience of India’s
ago. external sector.
• The NRI deposits, the second largest component, at US$ • However, India’s external sector – well supported by strong
141.6 billion were at the same level as at end of the previous exports, capital inflows, low CAD and external financing
quarter. requirements and high foreign exchange reserves,
• The short-term trade credit, the third largest component, at with various external vulnerability indicators well within
US$ 97.4 billion continued to contract. manageable limits – is far better prepared this time to face
any external shocks arising out of tightening of the monetary
• Together, these three components constitute 77.2 percent of
policy stance by the advanced economies in coming months.
total external debt as of end-September, 2021.

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04 MONETARY MANAGEMENT AND FINANCIAL

CHAPTER INTERMEDIATION
INTRODUCTION repo auctions (like Variable Rate Reverse Repo (VRRR)).

• Monetary policy and liquidity operations since the beginning • The liquidity conditions remained in surplus in 2021-22.
of the COVID-19 pandemic have been geared towards
mitigating its adverse impact on the economy.
DEVELOPMENTS IN G-SEC MARKET
• The yields on 10-year G sec which had reached 8.2 percent
• Accommodative monetary policy along with other regulatory
on 26th September 2018 reduced substantially to reach 5.75
dispensations, asset classification standstill, temporary
percent in June 2020. It has since then increased to stand at
moratorium, and provision of adequate liquidity was put in
6.45 percent as of 31st December 2021.
place to provide a safety net to the system.
• In 2021-22, some of the measures undertaken by RBI like NATIONAL ASSET RECONSTRUCTION COMPANY
CRR reduction reached pre-set sunset dates, liquidity has LIMITED
been wound down partly but remains in surplus mode, and • An Asset Reconstruction Company (ARC) Limited and
regulatory measures have been realigned. Asset Management Company (AMC) would be set up
to consolidate and take over the existing stressed debt
MONETARY DEVELOPMENTS
and then manage and dispose of the assets to Alternate
• The repo rate which currently stands at 4 percent is the
Investment Funds and other potential investors for
lowest in the last decade.
eventual value realization.” In line with this vision, two
• Since May 2020, the policy rates have been on hold along entities viz. National Asset Reconstruction Company
with an accommodative monetary policy stance with Limited (NARCL), and India Debt Resolution Company
forwarding guidance that this stance will continue as long as Limited (IDRCL) have been formed.
necessary to revive growth on a durable basis while ensuring
• NARCL will majorly be owned by Public Sector Banks.
that inflation remains within the target (Consumer Price Index
Canara bank is the Sponsor with a shareholding of up
inflation of 4 percent within a band of +/- 2 percent).
to 12 percent. NARCL would be capitalized through a
combination of equity and debt from various Banks and
will have a finite life of 5 years.
• It may acquire stressed assets of about `2 lakh crore
approx. in multiple phases within the extant regulations
of RBI under the 15:85 structure, implying that the
consideration for the acquisition will be 15 percent in Cash
and 85 percent in Security Receipts.
• NARCL and IDRCL’s relationship will be defined through
a debt management agreement wherein NARCL will
aggregate and acquire the stressed assets and IDRCL,
in turn, will provide stressed assets management and
resolution services to NARCL on an exclusive basis.
LIQUIDITY CONDITIONS AND THEIR MANAGEMENT

• Liquidity has remained in surplus in the system since mid- BANKING SECTOR
2019, in sync with the easing of monetary conditions.
• The Gross Non-Performing Advances (GNPA) ratio (i.e.
• In 2021-22 so far, the RBI resumed normal liquidity operations GNPAs as a percentage of Gross Advances) and Net Non-
in a phased manner and engaged in rebalancing liquidity from Preforming (NNPA) ratio of Scheduled Commercial Banks
passive absorption under fixed-rate reverse repo under its (SCBs) continued to decline since 2018-19. GNPA ratio of
Liquidity Adjustment Facility (LAF) to market-based reverse SCBs decreased from 7.5 percent at end-September 2020 to

17
Summary by NEXT IAS
6.9 percent at end-September 2021. NNPA ratio of SCBs was enabling rescue efforts for the bank.
2.2 percent at end-September 2021.  Timely repayment by the bank to DICGC: To establish
• GNPA ratio of Public Sector Banks (PSBs) decreased from the priority of repayment to DICGC (both interest and
9.4 percent at end-September 2020 to 8.6 percent at end- principal amount), a provision for penal interest in case of
September 2021. The Stressed Advances ratio of PSBs delay has been put in the act.
increased marginally from 10.0 percent to 10.1 percent  No ceiling on premium: The earlier act earlier had a
during the same period on account of rising in restructured ceiling of 15 paise on premium, which has been removed.
advances. Now, the ceiling on the premium will be notified by DICGC,
with the prior approval of RBI.
• The Capital Adequacy Ratio has continued to improve since
2015-16. Capital to Risk-weighted Asset Ratio (CRAR) of BANK CREDIT GROWTH
SCBs increased from 15.84 percent at end-September 2020
• The credit growth had been declining since 2019.
to 16.54 percent at end-September 2021 on account of its
• The credit growth was 5.3 percent at beginning of April 2021
improvement for both public and private sector banks.
and started to increase since then, but was still modest and
DEPOSIT INSURANCE IN INDIA stood at 7.3 percent as of 17th December 2021.
• The Deposit Insurance and Credit Guarantee Corporation Note:
(Amendment) Act, passed by the Parliament in 2021, made
DIGITAL PAYMENTS
significant changes in the landscape of deposit insurance in • UPI as a payment option in IPO’ was introduced as a new
India. payment channel to retail investors by SEBI.
• Under the Act, the Corporation is liable to pay the insured • The transaction limit for such transactions which was
deposit amount to depositors of an insured bank. Such increased by RBI from `1 lakh to `2 lakh in March 2020
liability may arise when an insured bank undergoes: was further increased to `5 lakh in December 2021.
 liquidation (sale of all assets on closing down of the bank) • RBI and the Monetary Authority of Singapore announced
 reconstruction or any other arrangement under a scheme, a project to link UPI and PayNow, which is targeted for
or operationalization by July 2022. Bhutan recently became
 merger or acquisition by another bank. Deposit insurance the first country to adopt UPI standards for its QR code.
provided by DICGC covers all commercial banks, • It is also the second country after Singapore to have
including Payment Banks, Small Finance Banks, Regional BHIM-UPI acceptance at merchant locations.
Rural Banks, Foreign Bank branches in India, local area
banks, and Co-operative Banks in all States and Union FACTORING IN INDIA
Territories. • Factoring is an important source of liquidity worldwide,
• The following are the key features of the Amendment Act: especially for MSMEs. Factoring is a transaction where an
 Introduced interim payments: Interim payment will now entity sells its receivables (dues from a customer) to a third
be made by DICGC to depositors of those banks for whom party (a ‘factor’ like a bank or NBFC) for immediate funds.
any restrictions/ moratorium have been imposed by RBI • To solve the liquidity issues of MSMEs and lay down the
under the Banking Regulation Act resulting in restrictions basic legal framework for factoring in India, the Factoring
on depositors from accessing their savings. Regulation Act 2011 was enacted.
 Timeline for interim payments: Clear-cut timeline of a • As per the Factoring Act 2011, four types of entities were
maximum of 90 days has been fixed for providing interim allowed to engage in factoring business: Banks, Statutory
payment to depositors. Within the first 45 days, the insured Corporations (which were exempted from registration under
bank must furnish the details of all outstanding deposits to Section 5), NBFCs (which have to obtain registration from
the Corporation. RBI), and companies.
 Within 30 days of the receipt of details, the Corporation • As per the Factoring Act 2011, RBI grants registration to only
will verify the authenticity of the claims and within 15 those NBFCs which do factoring as “principal business”, i.e.
days of the verification, the Corporation must make the whose financial assets in the factoring business constitute at
payment to such depositors. least 50percentt of its total assets and the income derived
 Repayment by banks to DICGC ¬ Deferment of from factoring business is not less than 50 percent of its
repayments: DICGC may defer repayments due to it gross income.
from an insured bank after insurance pays out, on terms • The Factoring Regulation (Amendment) Act, 2021 was enacted
decided by DICGC’s Board. It is in spirit with the rationale with the amendments in line with the recommendations of the
of interim payments, i.e., to help depositors while also UK Sinha Committee.

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Summary by NEXT IAS
INSURANCE SECTOR access to local assets before funds go to the foreign

• In India, insurance penetration was 2.71 percent in 2001 and administration or not.
has steadily increased to 4.2 percent in 2020. As of 2020,  Recognition of the claims of local creditors in a foreign
the penetration for life insurance in India is 3.2 percent and administration.
nonlife insurance penetration is 1 percent.  Recognition and enforcement of local securities, taxation
system over local assets where a foreign administrator is
• Globally, insurance penetration was 3.3 percent for the life
appointed, etc.
segment and 4.1 percent for the non-life segment in 2020.
• The Insolvency Law Committee (ILC) had recommended the
Cross Border Insolvency adoption of the United Nations Commission on International
• Cross-border insolvency signifies circumstances in which an Trade Law (UNCITRAL).
insolvent debtor has assets and/or creditors in more than one • This law addresses the core issues of cross-border insolvency
country. cases with the help of four main principles:
• At present, the Insolvency and Bankruptcy Code, 2016 (IBC)  Access: It allows foreign professionals and creditors
provides for the domestic laws for the handling of an insolvent direct access to domestic courts and enables them
enterprise. IBC at present has no standard instrument to to participate in and commence domestic insolvency
restructure the firms involving cross-border jurisdictions. proceedings against a debtor.
• The absence of a standardized cross-border insolvency  Recognition: It allows recognition of foreign proceedings
framework creates complexities and raises various issues and enables courts to determine relief accordingly.
such as:  Cooperation: It provides a framework for cooperation
 The extent to which an insolvency administrator may between insolvency professionals and courts of countries.
obtain access to assets held in a foreign country.  Coordination: It allows for coordination in the conduct of
 Priority of payments- Whether local creditors may have concurrent proceedings in different jurisdictions.

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05 PRICES AND INFLATION

CHAPTER
Introduction the price rise in pulses and edible oils that reported high
• Rising global inflation: As economic activity started showing inflation reflecting the impact of imported inflation in these
signs of picking-up in the second year of the pandemic, the commodities.
global economy faced the fresh challenge of rising global • Petrol and diesel prices: Reduction in central excise and
inflation. subsequent cuts in VAT by most States has also helped ease
• Major economies: COVID-19 related stimulus spending petrol and diesel prices.
in major economies along with pent-up demand boosting • Wholesale inflation based on Wholesale Price Index (WPI)
consumer spending pushed inflation up in many advanced after remaining very benign during the previous financial year
and emerging economies. on account of pandemic induced weakening of economic
• The surge in energy, food, non-food commodities, and activity, record low global crude oil prices and weak demand,
input prices, supply constraints, disruption of global supply witnessed a sharp uptick, rising to 12.5 per cent during 2021-
chains, and rising freight costs across the globe stoked 22.
global inflation during the year. • This was attributable to the pick-up in economic activity,
• Crude oil prices also witnessed an upswing during the year sharp increase in international prices of crude oil and other
on the back of increased demand from recovering economies imported inputs, and high freight costs.
and supply restrictions by the Organization of the Petroleum • The consequent divergence between CPI-C and WPI
Exporting Countries and its allies (OPEC+). inflation: during the year remained a subject of debate.
• On the domestic front the average headline Consumer Price • This divergence can be explained by factors such as
Index-Combined (CPI-C) inflation in India moderated to 5.2 variations due to base effect, difference in scope and
per cent in 2021-22 from 6.6 per cent in the corresponding coverage of the two indices, their price collections, items
period of 2020-21 and was recorded at 5.6 per cent in 2021. covered and difference in commodity weights.
• The Consumer Price Index inflation remained range • Further, WPI is more sensitive: to cost-push inflation led
bound as food prices eased considerably due to the supply by imported inputs. With the gradual waning of base effect
management response by the Government. in WPI, the divergence in CPI-C inflation and WPI inflation is
• Food inflation remained benign during the year at 2.9 per also expected to narrow down.
cent as against 9.1 per cent in the corresponding period last
Key highlights
year.
• The average headline CPI-Combined inflation moderated to
• In the case of vegetables prices of onions and potatoes
5.2 per cent in 2021-22 from 6.6 per cent in the corresponding
remained under control, though retail prices of tomatoes
period of 2020-21.
witnessed an uptick due to untimely rains in major producing
 The decline in retail inflation was led by easing of food
states.
inflation.
 However, with fresh arrivals in the market, retail prices
 Food inflation averaged at a low of 2.9 per cent in 2021-
of tomatoes too, are showing signs of easing.
22 (April to December) as against 9.1 per cent in the
 While seasonality plays a significant role in the case of
corresponding period last year.
vegetables, random shocks like untimely rains also
 Effective supply-side management kept prices of most
have an impact on their availability and prices.
essential commodities under control during the year.
 A strong network of cold storage chains well supported
 Proactive measures were taken to contain the price rise in
by effective transport infrastructure is needed to stabilize
pulses and edible oils.
the prices of such perishable commodities.
 Reduction in central excise and subsequent cuts in Value
 Effective supply-side management kept prices of most
Added Tax by most States helped ease petrol and diesel
essential commodities under control during the year.
prices.
• Edible oils: Proactive measures were taken to contain

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Summary by NEXT IAS
• Wholesale inflation based on Wholesale Price Index (WPI)  Recently, government has been prioritizing increasing
rose to 12.5 per cent during 2021-22. production of pulses and oilseeds through area
 This has been attributed to: expansion, productivity through HYVs, MSP support and
 Low base in the previous year, procurement.
 Pick-up in economic activity, • Calibrated Import Policy: Knee jerk reactions to price
Sharp increase in international prices of crude oil and rise of essential commodities like pulses and edible oils
other imported inputs, and through frequent import duty/tariff revisions though providing
High freight costs. immediate relief to the consumers in the way of lower prices,
• Divergence between CPI-C and WPI Inflation: send wrong signals to domestic producers and create an
 The divergence peaked to 9.6 percentage points in May environment of uncertainty.
2020.  A long-term consistent approach is mandated.
 However, this year there was a reversal in divergence  A step in this direction has been taken by the government
with retail inflation falling below wholesale inflation by 8.0 where five year MoUs have been signed with Myanmar
percentage points in December 2021. for annual import of 2.5 LMT of Urad and 1 LMT of Tur,
 This divergence can be explained by factors such as: with Malawi for annual import of 1 LMT of Tur, and MoU
with Mozambique for annual import of 2 LMT Tur has been
 Variations due to base effect,
extended by another five years.
 Difference in scope and coverage of the two indices,
 These MoUs will ensure predictability in the quantity of
 Price collections, pulses being produced abroad and exported to India,
 Items covered, thus benefiting both India and the pulse exporting country.
 Difference in commodity weights, and • Focus on transportation and storage infrastructure for
 WPI being more sensitive to cost-push inflation led by perishable commodities: Better storage and supply chain
imported inputs. management is required to ensure availability in lean season
• With the gradual waning of base effect in WPI, the divergence and reduced wastages of horticulture and other perishable
in CPI-C and WPI is also expected to narrow down. essential commodities to reduce the seasonal spikes in
prices for consumers, glut for the farmers in times of good
Long term perspective for management of supply side harvests due to lack of marketing infrastructure, resulting in
factors distress sales.
• Changing Production Patterns: Encouraging farmers to  Effective utilisation of Agriculture Infrastructure Fund
shift from cultivation of rice and wheat to pulses and oilseeds for investment in viable projects for post-harvest
would help ensure that the country is self-reliant in pulses and management infrastructure for perishable commodities
oilseeds and also assist in reducing import dependence. can help improve agriculture infrastructure in the country.
 Shift in cultivation towards pulses would also enable the  Schemes like Operation Green and Kisan Rail need to be
government to maintain realistic buffer stocks of rice and exploited further to protect the interests of the farmers as
wheat. well as the consumers.
General inflation based on different price indices

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SUSTAINABLE DEVELOPMENT AND CLIMATE

06 CHANGE
CHAPTER
Introduction: increase of 12, 10 and 8 points respectively.

• India has progressed on the fulfillment of Sustainable • Chandigarh (score of 79) retained its top rank amongst UTs
Development Goals (SDGs), citing an improvement in the in 2020-21 while Puducherry, Lakshadweep and Delhi (score
overall score of NITI Aayog SDG India Index & Dashboard. of 68) ranked second.
• It has also increased its total forest cover. The chapter • Puducherry made the highest gain (nine points) in 2020-21,
highlights the importance of balancing rapid economic followed by Delhi, Jammu and Kashmir and Ladakh (seven
growth with conservation, ecological security & environmental points each).
sustainability. It also discusses several initiatives taken in the • Special attention is being paid to achievement of SDGs in the
area of sustainable finance by the Ministry of Finance, RBI North-East region, with a North-Eastern Region (NER) District
and SEBI. SDG Index 2021-22 developed by NITI Aayog.
• The index is constructed from 84 indicators and covers 15
INDIA’S PROGRESS ON SUSTAINABLE DEVELOPMENT
global goals, 50 SDG targets and 103 districts in the eight
GOALS
states of the North Eastern Region.
• India has been making strides towards achieving the social,
economic and environmental goals covered under SDGs STATE OF THE ENVIRONMENT
in the face of the considerable human and economic costs • Sustainable development requires balancing rapid
imposed by the COVID-19 pandemic. economic growth with conservation, ecological security and
environmental sustainability. This section explores the state
Goal wise performance of India as a whole: NITI Aayog
of the environment across land, water and air.
SDG India Index Report and Dashboard 2020-21
• India’s overall score on the NITI Aayog SDG India Index & Land Forests
Dashboard improved to 66 in 2020-21 from 60 in 2019-20
and 57 in 2018-19.
• Despite 2020-21 being a pandemic year, India performed
well on eight of the 15 SDGs measured by the NITI Aayog
SDG India Index.
Performance of States and UTs on the NITI Aayog SDG

India Index, 2021
• The number of Front Runners (scoring 65-99) increased to 22
states and UTs in 2020-21 from 10 in 2019-20. All remaining
states and UTs were Performers (scoring 50- 64).
• Amongst states, additions to the Front Runner category Performance of States/UTs on the NITI Aayog SDG India
in 2020-21 included Uttarakhand, Gujarat, Maharashtra, Index (2019 and 2020)
Mizoram, Punjab, Haryana and Tripura. Amongst UTs, • Russia, Brazil, Canada, USA and China were the top five
additions to the Front Runner category included Andaman largest countries by forest area in 2020, while India was the
and Nicobar Islands, Delhi, Jammu and Kashmir, Ladakh and tenth largest country by forest area.
Lakshadweep. • Forests covered 24 per cent of India’s total geographical
• Kerala (score of 75) retained its top rank amongst states in area accounting for two per cent of the world’s total forest
2020-21. Tamil Nadu and Himachal Pradesh ranked second. area in 2020.
• Mizoram, Haryana, and Uttarakhand are the top gainers in • The top 10 countries account for 66 percent of the world’s
2020-21, in terms of improvement in score from 2019, with an forest area.

22
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• Of these countries, Brazil (59 per cent), Peru (57 per cent), • This increase in total forest cover is mainly attributed to an
Democratic Republic of Congo (56 per cent) and Russia (50 increase in very dense forest which rose by 19.54 percent
per cent) have half or more of their total geographical area between 2011 and 2021. Open forest also improved by 6.71
under forests. per cent, while moderately dense forest declined by 4.32 per
• India ranked third globally in average annual net gain in cent between 2011 and 2021.
forest area between 2010 to 2020, adding approximately • Amongst states, Madhya Pradesh (11 per cent of India’s total
0.38 percent of the 2010 forest area every year between 2010 forest cover) had the largest forest cover in India in 2021,
to 2020. followed by Arunachal Pradesh (9 per cent), and Chhattisgarh
• India’s total forest cover was 7,13,789 sq km in 2021 (8 per cent),
reflecting an increase of 3.14 per cent in the forest cover over • Mizoram (85 per cent), Arunachal Pradesh (79 per cent) and
2011, from 21.05 per cent of the country’s geographical area Meghalaya (76 per cent), were the top three states in terms of
in 2011 to 21.71 per cent in 2021. highest percent of forest cover w.r.t. total geographical area
of the state in 2021.
Plastic Waste Management and Elimination of identified single use plastic items, which have low utility
Identified Single Use Plastics and high littering potential, by 2022.
• India is committed to mitigate pollution caused by littered  In order to stop littering due to light-weight plastic carry
single use plastics. In 2018, the Government announced that bags, the thickness of plastic carry bags has been
India would phase-out single use plastic by 2022. increased to one hundred and twenty microns with effect
from December 31, 2022.
• The Hazardous and Other Wastes (Management and
 The plastic packaging waste, which is not covered under
Transboundary Movement) Rules, 2016 as amended regulate
the phase out of identified single use plastic items, shall be
the import of identified plastic waste into the country by SEZ
collected and managed in an environmentally sustainable
and EOUs.
way through the Extended Producer Responsibility of
• India piloted a resolution on ''Addressing Single Use Plastic
the Producer, Importer and Brand Owner (PIBO), as per
Product Pollution'' which was adopted by the Fourth United
Plastic Waste Management Rules, 2016.
Nations Environment Assembly held in 2019.
• A National Level Taskforce has been constituted by the
• The following domestic regulatory actions have been taken in
Ministry of Environment, Forest and Climate Change for
2021:
taking coordinated efforts to eliminate identified single use
 In August 2021, the Ministry of Environment, Forest and
plastic items and effective implementation of Plastic Waste
Climate Change, Government of India, notified the Plastic
Management Rules, 2016. All States/UTs and concerned
Waste Management Amendment Rules, 2021 prohibiting
central ministries are members of the National Task Force.

23
Summary by NEXT IAS
Water • Under the Nirmal Ganga (Unpolluted Flow) component of

Ground Water the mission, 160 sewerage projects have been sanctioned
to create a cumulative treatment capacity of 5,024 MLD,
reflecting a ten-fold increase from 463 MLD through 28
projects in 2014.
• Gross Polluting Industries (GPIs) along River Ganga
have been inventoried. Since 2015, sector specific charters
for implementation of cleaner technology, upgradation of
treatment facilities and adaptation of waste minimization
practices have been implemented in the major industrial
sectors like pulp & paper, distilleries, sugar and textile by
involving different stakeholders.
Air
• The Government of India launched the National Clean Air
• Ground Water Resources Assessment of states/UTs is Programme (NCAP) in 2019 to tackle the air pollution problem
carried out jointly by state groundwater/ nodal departments in a comprehensive manner, with a target to achieve 20-30
and Central Ground Water Board at periodic intervals, and per cent reduction in particulate matter (PM) concentrations
the Dynamic Ground Water Resources of India is published by 2024 across the country keeping 2017 as the base year
by compiling the state/UT wise ground water resources for the comparison of concentration.
assessed. • In 2019-20, the highest funds were released to Uttar Pradesh,
• During the period 2009-20, units categorized as “safe”, have followed by Maharashtra and Madhya Pradesh while in 2020-
declined from 2009 (73 per cent) to 2020 (64 per cent). “Semi- 21, the highest funds were released to Andhra Pradesh,
critical” units have increased from 9 per cent in 2009 to 15 Punjab and West Bengal.
per cent in 2020. The share of “Critical” units has remained • Several steps are being taken to control and minimize air
in the range of 3-5 per cent during 2004-2020. The share of pollution from various sources in the country, which inter alia
“Over-exploited” units accounted for 14-17 per cent of total include:
assessment units during 2004-20. In addition, approximately  Vehicular Emission: India has leapfrogged from BS-IV to
one per cent of assessment units have been categorized as BS-VI norms for fuel and vehicles since April, 2020. Metro
“saline”. rail networks for public transport have been enhanced
and more cities have been covered. Cleaner/alternate
Reservoirs fuels like CNG, LPG and ethanol blending in petrol have
• The reservoir live storage is at its peak during monsoon been introduced. Government has approved Phase-II of
months and lowest in summer months, requiring careful FAME Scheme with an outlay of 10,000 Crore for a period
planning and coordination of storage, release and utilization of five years commencing from 1st April 2019.
of reservoirs.  Industrial Emission: Stringent emission norms for coal
based thermal power plants have been introduced. There
Rivers is a ban on use of imported pet coke in the country since
• The Ganga River Basin is the largest river basin in India, July 2018, with exception for permitted processes. Online
covering more than a quarter of the country's land area, continuous emission monitoring devices have been
hosting about 43 per cent of its population and contributing installed in highly polluting industries. Brick kilns have
28 per cent of India’s water resources. been shifted to zig-zag technology to reduce pollution.
• The Government of India launched the Namami Gange  Air Pollution due to dust and burning of waste: Six
Mission in 2014 as an integrated and multi-sectoral mission waste management rules covering solid waste, plastic
for conservation of Ganga and its tributaries. waste, e-waste, bio-medical waste, construction and
demolition waste and hazardous waste have been
Namami Gange Mission notified.
• The total expenditure incurred under the Namami Gange
Monitoring of Ambient Air Quality:
Mission was lower in 2020-21 and 2021-22 needs to be
• Air quality monitoring network of manual as well as continuous
viewed in the context of the COVID pandemic and recent
monitoring stations, under programmes such as National Air
changes in accounting norms.
Monitoring Programme, have been expanded.

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Summary by NEXT IAS
• Air pollution remains a major concern, with 36 cities showing • India sought for the just transition for the developing countries
an increasing trend in PM10 concentration in 2020-2021 as with adequate time frame so that the green economy benefits
compared to 2019-2020. are shared with all.
• In addition to the above measures, some key measures being • The “Glasgow Climate Pact” urges the developed country
taken for reducing air pollution in Delhi / NCR are as follows: Parties to fully deliver on the USD 100 billion mobilization goal
 A Commission on Air Quality Management in NCR urgently and through 2025, and emphasizes the importance
and Adjoining Areas was promulgated vide ordinance of transparency in the implementation of their pledges.
dated 13th July 2021 for better coordination, research, • It also decided to convene an annual high-level ministerial
identification and resolution of problems surrounding the round table on pre-2030 ambition, beginning at the fourth
air quality index. session of the Conference of the Parties serving as the
 To control emissions from stubble burning, under Central meeting of the Parties to the Paris Agreement.
Government Scheme on ‘Promotion of Agricultural
Mechanization for in-situ management of Crop Residue in India’s NDC and its voluntary commitment on
the States of Punjab, Haryana, Uttar Pradesh and NCT of enhanced climate action.
Delhi’. • India submitted its Nationally Determined Contribution
 All diesel vehicles older than 10 years and all petrol (NDC) under the Paris Agreement on a “best effort basis”
vehicles older than 15 years have been banned in Delhi keeping its developmental imperatives in mind. India
and NCR. committed to (i) reduce the emission intensity of GDP by 33
 Expressways & Highways have been operationalized to to 35 per cent by 2030 as compared to 2005 level; (ii) create
divert non-destined traffic away from Delhi. an additional carbon sink of 2.5 to 3 billion tonnes of CO2
 Shifting industries to clean fuel and installation of Online equivalent through additional forest and tree cover by 2030;
Monitoring of Industrial Emission & Effluent systems in red and (iii) achieve about 40 per cent cumulative electric power
category industries in Delhi-NCR is in progress. installed capacity from non-fossil fuel energy resources by
2030.
• As a result of these interventions, there has been an
• Against these targets, India’s third Biennial Update Reports
improvement in the air quality index for Delhi since 2016.
(BUR) submitted to the UNFCCC in 2021 reports that during
Delhi achieved approximately 22 per cent reduction in PM2.5
2005-2016, the country had reduced emission intensity of its
and 27 per cent reduction in PM10 in 2021 as compared to
GDP by 24 per cent.
2016.
• According to the India State of Forest Report 2021 released in
CLIMATE CHANGE January 2022, the total carbon stock in the country’s forests
• India launched the National Action Plan on Climate Change is estimated to be 7,204 million tonnes, and the carbon stock
(NAPCC) in 2008, establishing eight National Missions to in forest has increased by 79.4 million tonnes as compared to
advance action on the country’s climate priorities. the last assessment of 2019.
• India’s climate actions, especially the adaptation efforts are • According to the Central Electricity Authority, as on 31st
largely financed domestically. The National Adaptation Fund December 2021, the share of non-fossil sources in installed
on Climate Change (NAFCC) was launched in 2015. capacity of electricity generation was 40.20 per cent.
• The projects focus on climate sensitive sectors such as • In order to coordinate India’s response on climate change, an
agriculture, water, forestry as well as the coastal and institutional framework of a high-level inter-ministerial Apex
Himalayan ecosystem, and are being implemented to Committee for the Implementation of Paris Agreement
(AIPA) has been created.
enhance the adaptive capacity of the most vulnerable
sections of our population and ecosystems.
FINANCE FOR SUSTAINABLE DEVELOPMENT
Major decisions at the COP26 Climate Summit, Dealing with Financial Risks associated with Climate Change
Glasgow • In May 2021, the Reserve Bank of India (RBI) set up a new
• The 26th Session of the Conference of the Parties (COP 26) to unit–‘Sustainable Finance Group’ (SFG) within its Department
the UNFCCC was held under the UK Presidency in Glasgow of Regulation to effectively counter these risks, and for
from 31st October – 13th November 2021. leading the regulatory initiatives in the areas of sustainable
finance and climate risk.
• The COP26 adopted outcomes on all pending issues of the
“Paris Rule Book”, which is the procedures for implementation • To assess the progress of its regulated entities in managing
of the Paris Agreement, including market mechanisms, climate risk, RBI is preparing a consultative discussion paper
transparency, and common timeframes for NDCs. covering, inter alia, (i) governance, (ii) strategy, (iii) risk
management, and (iv) disclosure.

25
Summary by NEXT IAS
Augmenting Finance for Sustainable Development International Solar Alliance (ISA)

• In January 2021, a Task Force on Sustainable Finance was • In November 2021, the Hon’ble Prime Minister launched the
set up by the Department of Economic Affairs, Ministry of joint Green Grids Initiative- One Sun One World One Grid
Finance, Government of India. (GGI –OSOWOG) at the World Leaders’ Summit in Glasgow.
• India is actively contributing to the global efforts towards • A joint GGI-OSOWOG Secretariat is being planned to be
green finance. RBI joined the Central Banks and Supervisors established at the ISA Secretariat to mobilize political support
Network for Greening the Financial System (NGFS) as a and render technical support for the initiative.
member on April 23rd, 2021 and has begun participating in • ISA has attained a Permanent Observer Status at the UN
the work streams of the NGFS. General Assembly.
• The liberalized External Commercial Borrowings (ECB) norms • ISA is mandated to facilitate mobilization of USD 1 trillion
of RBI have enabled the Indian renewable energy companies in solar investments by 2030 for massive scale-up of solar
and other firms to tap the ECB route for raising finance energy deployment. The Strategic Plan of the ISA for 2021-
through green bonds and sustainable bonds, reflecting the 2026 identifies three key global issues – Energy Access,
growing attractiveness of this route for raising finance. Energy Security, and Energy Transition.
• India is also a part of several bilateral and global sustainable
finance initiatives. RBI is a member of a Task Force on Coalition for Disaster Resilient Infrastructure
Climate-related Financial Risks set up by the Basel Committee • India’s call for promoting disaster resilience of infrastructure
on Banking Supervision, and the International Platform on through the Coalition for Disaster Resilient Infrastructure
Sustainable Finance. (CDRI) has been receiving global attention.
• In addition to India’s seed funding of USD 70 million, the
Investing in Resilience for Sustainable Development United Kingdom, United States and the Netherlands have
• SEBI has been one of the early adopters of sustainability pledged GBP 1 million, USD 9.2 million and 100,000 Euro
reporting for listed entities and requires mandatory ESG respectively for CDRI’s programmes and projects.
related disclosures as part of the Business Responsibility • In March 2021, the third International Conference on
Report (BRR), for the top 100 listed entities (by market Disaster Resilient Infrastructure (ICDRI) was launched,
capitalisation) since 2012. which discussed key global issues around resilience of
• The above requirement of filing BRR was progressively critical infrastructure sectors.
extended to the top 500 entities (from financial year 2016-17)
• In November 2021, the Infrastructure for Resilient Island
and later to the top 1000 listed entities (from the financial year
States (IRIS) was launched. This is a dedicated intiative for
2019-20).
Small Island Developing States (SIDS) that provides quality
• The Business Responsibility and Sustainability Report technical and financial services to make SIDS infrastructure
(BRSR) which shall replace the existing BRR to bring in resilient to climate change and disaster events.
greater transparency through disclosure of ESG-related
information and by enabling market participants to identify Leadership Group for Industry Transition (LeadIT
and assess sustainability-related risks and opportunities. Group)
• The BRSR shall be applicable to the top 1000 listed entities • LeadIT was launched by India and Sweden, with the support
(by market capitalization) on a mandatory basis from FY of the World Economic Forum at the UN Climate Action
2022–23; however, entities can choose to adopt it on a Summit in New York in September 2019, as one of the nine
voluntary basis from FY 2021–22. action tracks identified by the UN Secretary-General to
boost climate ambitions and actions to implement the Paris
INDIA’S INITIATIVES AT THE INTERNATIONAL STAGE Agreement.
Lifestyle for Environment (LIFE)
• In November 2021, a One-Word Movement in the context of
CONCLUSION
climate: LIFE - Lifestyle for Environment, at the COP 26 was • India’s performance on the NITI Aayog SDG India Index
proposed in Glasgow. has improved from an overall score of 60 in 2019-20 to 66
in 2020-21. India has also been making significant strides
• This movement calls for coming together with collective
in increasing its forest area, ranking third globally in net
participation, to take lifestyle for the environment forward as
gain in forest area during the decade (2010-20). Much of
a campaign and as a mass movement for environmentally
India’s increase in forest cover during 2011-21 is attributed
conscious lifestyle.
to enhancement in very dense forest cover, which rose by

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Summary by NEXT IAS
07 REGULATORY FORBEARANCE: AN
CHAPTER EMERGENCY MEDICINE, NOT STAPLE DIET!
Introduction
• The agriculture sector has experienced buoyant growth in the • India runs one of the largest food management programs
past two years. The sector, which is the largest employer of in the world. The Government has further extended the
the workforce, accounted for a sizeable 18.8 percent (2021- coverage of food security networks through additional
22) in Gross Value Added (GVA) of the country registering provisions of food grains through the schemes like PM
a growth of 3.6 percent in 2020-21 and 3.9 percent in 2021- Gareeb Kalyan Yojana (PMGKY).
22. Growth in allied sectors including livestock, dairying, and • Natural farming in India is being promoted through
fisheries has been the major drivers of overall growth in the a dedicated scheme of the Bharatiya Prakritik Krishi
sector. Paddhati Programme (BPKP). The scheme promotes
on-farm biomass recycling with major stress on biomass
mulching, use of on-farm cow dung-urine formulations,
periodic soil aeration, and exclusion of all synthetic
chemical inputs.
• India is the second-largest fish-producing country in the
world accounting for 7.56 percent of global production. It
contributes about 1.24 percent to the country’s GVA and
over 7.28 percent to the agricultural GVA.
• The fisheries sector has demonstrated an outstanding
double-digit average annual growth of 10.87 percent
since 2014-15.
• Government launched a new flagship scheme of ₹ 20,050
crores called Pradhan Mantri Matsya Sampada Yojana
(PMMSY) in May 2020 as a part of the ANB Package.
Major Highlights
Under PMMSY, key interventions include enhancing
• The net receipts from crop production alone have increased fish production and productivity, modernizing and
by 22.6 percent as compared to the previous SAS Report
strengthening the value chain, creating fisheries and post-
of 2014 although there is a visible diversification in the
harvest infrastructure, and developing robust fisheries
sources of income of the farmers.
management and regulatory frameworks.
• The livestock sector has grown at a CAGR of 8.15 percent
• The scheme aims to create a conducive environment for
over the last five years ending 2019-20.
private sector participation and promotes the dynamic
• Dairy is the single largest agricultural commodity development of innovative entrepreneurial ventures and
contributing 5 percent of the national economy and viable business models in the fisheries sector.
employing more than 8 crore farmers directly. India is
ranked 1st in milk production contributing 23 percent of
global milk production. Milk production in the country has GROSS VALUE ADDED (GVA) IN AGRICULTURE
grown at a compound annual growth rate of about 6.2 • The share of the sector in total GVA of the economy has
percent a long-term trend of around 18 percent. The share of the
• The sector has been a stable source of income across agriculture & allied sector in total GVA, however, improved to
groups of agricultural households accounting for about 15 20.2 percent in the year 2020-21 and 18.8 percent in 2021-
percent of their average monthly income. 22.
• The Gross Capital Formation (GCF) in agriculture and allied
sectors relative to GVA in the sector has been showing a
fluctuating trend Fluctuation in the GCF in the sector arises

27
Summary by NEXT IAS
mainly because of wide fluctuations in private investment in between agricultural and non-agricultural sectors, the likely
agriculture and allied sectors. effect on the rest of the economy, besides ensuring rational
• While public investment has remained stable between 2-3 utilization of land, water, and other production resources
percent over the years, the private investment has fluctuated and a minimum of 50 percent as the margin over the cost of
production.
and the total agricultural GCF has moved in sync with
variation in private investment. • Government has announced the increase in MSP for all
Note: mandated Kharif crops of the year 2021-22. The highest
increase in MSP has been recommended for lentil (Masur)
• The oilseed production in India has grown by almost 43
and rapeseed & mustard at ₹ 400 per quintal each followed by
percent from 2015-16 to 2020-21.
the gram at ₹ 130 per quintal and safflower at ₹ 114 per quintal.
• India is the world’s second-largest consumer and number
one importer of vegetable oil.
Sweet Revolution
• India is the largest consumer and the second-largest
• Keeping in view the importance of beekeeping as part of
producer of sugar in the world.
the Integrated Farming System (IFS) in the country, the
• Sugarcane Industry is the country’s second-largest agro-
government approved the allocation of ₹ 500 crores for the
based industry, next to cotton.
National Beekeeping & Honey Mission (NBHM) for three
• The overall stage of groundwater development (ratio of years (2020-21 to 2022-23).
annual groundwater draft and net annual groundwater
• NBHM aims for the overall promotion & development of
availability) in the country is 63 percent.
scientific beekeeping in the country to achieve the goal
• This ratio which signifies the rate of extraction of of ‘Sweet Revolution’ which is being implemented through
groundwater, is very high (more than 100 percent) in the the National Bee Board (NBB).
states of Delhi, Haryana, Punjab, and Rajasthan. Himachal
• India’s export of honey has increased by about 110
Pradesh, Tamil Nadu, Uttar Pradesh
percent between 2013-14 to 2019-20.
• National Mission on Edible Oils - Oil Palm (NMEO-OP) has
been launched to augment the availability of edible oil in the
country by harnessing area expansion and through price Recent Initiatives in Animal Husbandry and Dairy
incentives. Under the scheme, for the first time, Government Sector
will give price assurance to the oil palm farmers for the Fresh • National Animal Disease Control Programme
Fruit Bunches (FFBs). This will be known as the Viability Price  National Animal Disease Control Programme (NADCP),
(VP) which will protect the farmers from the fluctuations of the which is the largest ever vaccination program carried
international crude palm oil (CPO) prices. out either for human or animal vaccination in the world,
is being implemented to control and eventually eradicate
Price Policy: Minimum Support Price (MSP)
the Foot & Mouth Disease (FMD) and Brucellosis by 2030.
• The Government’s price policy for major agricultural
commodities seeks to ensure remunerative prices to the • Animal Husbandry Infrastructure Development Fund (AHIDF)
growers for their produce to encourage higher investment  As part of the ANB stimulus package, the Animal
and production and thereby to safeguard the interest of Husbandry Infrastructure Development Fund (AHIDF)
consumers by making available supplies at reasonable worth Rs 15,000 crore was launched in 2020.
prices.  AHIDF facilitates investments in the establishment
• The Government fixes the MSP of 22 mandated crops based of infrastructure for dairy and meat processing and
on the recommendations of the Commission for Agricultural the establishment of animal feed plants by the FPOs,
Costs & Prices (CACP) and after due consideration of the individual entrepreneurs, MSME, Section 8 companies,
views of State Governments and the concerned Central and private companies.
Ministries/ Departments.  Under this scheme the Central Government provides 3
• The 22 mandated crops include 14 Kharif crops viz. paddy, percent interest subvention to the borrower and credit
jowar, bajra, maize, ragi, tur (arhar), moong, urad, groundnut, guarantee up to 25 percent of total borrowing.
soybean (yellow), sunflower seed, sesamum, Niger seed,
FOOD PROCESSING SECTOR
cotton, and 6 Rabi crops viz. wheat, barley, gram, Masur
(lentil), rapeseed and mustard, safflower and 2 commercial • During the last five years ending 2019-20, Food Processing
crops viz. jute and copra. Industries (FPI) sector has been growing at an average annual
• Important factors while deciding MSP are the cost of growth rate of around 11.18 percent. The sector constituted
production, overall demand-supply conditions, domestic and as much as 9.87 percent of GVA in manufacturing in 2019-20
international prices, inter-crop price parity, terms of trade at 2011-12 prices.

28
Summary by NEXT IAS
• In FPI, 100 percent FDI is permitted under the automatic • Ethanol Blended with Petrol (EBP) Programme: The
route. However, in the case of trading in respect of food Government has now set a 20 percent ethanol blending
products manufactured and/or produced in India including target for mixing ethanol with petrol to be achieved by 2025.
through e-commerce, 100 percent FDI is allowed under the  It is estimated that the blending target at 10 percent would
Government approval route. be achieved during 2022. To achieve these targets, the
Government has allowed the production of ethanol from
Food Management different feedstocks viz B-Hy & C-Hy molasses, cane
• Fortification of Rice and its Distribution: The Government juice, sugar syrup, sugar, and damaged food grains
of India approved the Centrally Sponsored Pilot Scheme including surplus FCI rice, maize, etc. by the distilleries
‘Fortification of Rice and its Distribution under Public either attached with sugar mills or standalone.
Distribution System’ on 14.02.2019 for 3 years beginning  The ethanol blending target for ESY 2021-22 is 10 percent
2019-20. The Pilot Scheme is being implemented in 15 which is to progressively increase to 20 percent by the
Districts (1 District per State). year 2025.
 Eleven states including Andhra Pradesh, Gujarat,
Maharashtra, Tamil Nadu, Chhattisgarh, Uttar Pradesh, Conclusion
Odisha, Telangana, Madhya Pradesh Uttarakhand, and • The increasing importance of allied sectors including animal
Jharkhand have started distributing the fortified rice in husbandry, dairying, and fisheries in the growth and income
their identified districts under the pilot scheme. of the farmers indicates that focus needs to shift more
 The Government has started distributing fortified rice towards harnessing the potential of allied activities. There is
under the Integrated Child Development Scheme and PM also a need to improve the productivity of small and marginal
Poshan schemes across the country during 2021-22 to farmers through the development and implementation of
scale up the distribution of fortified rice in the country to smallholding farm technologies. While the Government has
fight malnutrition and micronutrient deficiencies among adopted the use of MSP as a signal to encourage crop
pregnant women, lactating mothers, children, etc. diversification, there is also a need for coordinated action
• One Nation One Ration Card: Under the scheme “Integrated from the State Governments to facilitate the shift to high value
Management of Public Distribution System" which was started and less water consuming crops to enable the realization
during 2018-19 and 2019-20, the One Nation One Ration of the objective of doubling farmers’ income sustainably.
Card (ONORC) System has been launched. The validity The increase in agriculture R & D therefore may improve
of the scheme has been extended to 31.03.2023 from the productivity in the crop and allied sectors. However in terms
existing 31.03.2022. of the use of fertilizers focus should be on the use of new
technology including drones and AI-based decision support
systems, reduction in the use of chemical fertilizers, and
use of low-cost organic inputs, and supporting start-ups for
innovations.

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Summary by NEXT IAS
INNOVATION: TRENDING UP BUT NEEDS

08 THRUST, FROM THE PRIVATE SECTOR
CHAPTER
Introduction negative growth of 0.7 growth in October 2020.

• Global Industrial activity continued to be affected by the • Certain industries such as mining, textiles, petroleum, coal
disruptions caused by the COVID-19 pandemic. While the products and nuclear fuels, rubber, plastic, and infrastructure
Indian industry was no exception to these disruptions, its have shown consistent improvement in credit growth.
performance has improved in 2021-22. Note:
• Gradual unlocking of the economy, record vaccinations, • Capacity utilization (CU) is an important economic
improvement in consumer demand, continued policy indicator to assess the demand and investment prospects
support towards industries by the government in the form of the economy. CU rates are largely able to track the
of AtmaNirbhar Bharat Abhiyan, and further reinforcements pace of manufacturing activities in the economy.
in 2021-22 have led to an upturn in the performance of the • The growth rate of the IIP-manufacturing index and
industrial sector. capacity utilization provides a snapshot of the demand
• The growth of the industrial sector, in the first half of 2021-22, conditions for India’s manufacturing sector.
was 22.9 percent vis a vis the corresponding period of 2020- • Another indication of optimism about the economic
21and is expected to grow by 11.8 percent in this financial performance is the RBI’s Business Expectation Index
year. (BEI).
• This index gives a glimpse of the demand conditions in
Index of Industrial Production (IIP)
the manufacturing sector by combining parameters which
• The industrial performance has shown improvement as include overall business situation, production, order
reflected in the cumulative growth of the IIP. During April- books, inventory of raw material and finished goods, profit
November 2021-22 the IIP grew at 17.4 percent as compared margin, employment, exports, and capacity utilization.
to (-) 15.3 percent in April-November 2020-21.
Eight Core Index (ICI) FDI Policy reforms and Other Measures during the
Covid-19 Pandemic period
• The monthly Index of Eight Core Industries (ICI) measures
the collective and individual performance of production in • The changes in the FDI policy can be broadly categorized
selected eight core industries like Coal, Crude Oil, Natural into measures taken to improve foreign participation while
Gas, Refinery Products, Fertilizers, Steel, Cement, and protecting Indian industry from opportunistic takeovers, to
Electricity. enhance transparency and rationalization of processes, and
steps to monitor and expedite implementation.
• This is an index of the eight most fundamental industrial
sectors of the Indian economy and comprises 40.27 percent • Measures are taken to allow greater foreign participation.
of the weight in IIP.  Defense Sector: The FDI policy amendments, notified
vide Press Note 4 (2020 series) dated 17.09.2020, have
• The growth rate of the ICI index during the period of April-
been carried out to realize the vision of an AtmaNirbhar
November2021-22was 13.7percent as compared to (-) 11.1
Bharat.
percent in the corresponding period of the last financial year.
 Now, FDI in the defense sector is allowed up to 74 percent
• Fertilizers and crude oil registered a negative growth of 0.6
through automatic route (from earlier 49percent) for
percent and 2.7 percent respectively.
companies seeking new industrial licenses.
 Insurance Sector: permissible FDI limit from 49percent
GROSS FIXED CAPITAL FORMATION
to 74percent in Insurance Companies under the automatic
• Gross fixed capital formation (GFCF) is the gross addition to
route and allow foreign ownership and control with
fixed assets like machinery and equipment, intangible assets
safeguards.
and indicates the state of investments in the economy.
 Petroleum & Natural Gas sector: foreign investment up
• Gross bank credit to the industrial sector, recorded a growth to 100percent under the automatic route in cases where
of 4.1 percent in October 2021 (Y-o-Y basis) compared to a

30
Summary by NEXT IAS
the Government has accorded ‘in-principle’ approval for • Textiles: Textile industry is the second-largest employment
strategic disinvestment of a Public Sector Undertaking generator in the country, next only to agriculture. , it has
(PSU) engaged in the Petroleum and Natural Gas Sector. shown a remarkable recovery with a positive contribution
 Telecom sector: foreign investment up to 100percent to growth, as reflected by IIP, of 3.6 percent during April
under automatic route in Telecom services sector. October 2020.
• Curbing opportunistic acquisitions/takeovers: vide Press • Production-Linked Incentive (PLI) Scheme for Man-
Note 3 (2020) dated 17.04.2020, the Government amended Made Fibre (MMF) segment and technical textiles, notified
the FDI policy according to which an entity of a country, in September 2021, for enhancing India’s manufacturing
which shares a land border with India or where the beneficial capabilities and enhancing exports.
owner of investment into India is situated in or is a citizen • Further in major support to enhance the competitiveness of
of any such country, can invest only under the Government the sector, the government notified the setting up of 7 PM
route. MEGA INTEGRATED TEXTILES REGION AND APPAREL
• Measures to improve transparency and to rationalize PARK (MITRA) in October 2021.
processes include amendment of the Standard Operating
Champion Portal
Procedure (SOP) to improve ease of processing FDI
proposals. • The CHAMPIONS portal (www.champion.gov.in) is an
ICT-based technology system for making the smaller units
• ‘FDI Monitoring Cell’ has been formed which follows up with
big by helping and handholding them.
applicant/ investor, to expedite FDI proposals with a view to
identifying hurdles if any. An Inter-Ministerial Committee (IMC) • The key features of the portal include:
has been constituted under the Chairpersonship of Secretary, • Information dissemination: Regular updates on recent
Department for Promotion of Industries and Internal Trade to development in the MSME sector.
take appropriate decisions on delayed proposals and those • With a view to resolving the grievances in a fast track
escalated by Administrative Ministries/ Departments. manner, all Nationalised Banks, a good number of Private/
Regional Rural Banks, State Financial Corporations,
SECTOR-WISE PERFORMANCE AND ISSUES IN Central Government Ministries/ Departments, State
INDUSTRY Governments, and CPSEs have been on-boarded on the
• Steel: The performance of the steel industry is pivotal for the portal.
growth of the economy. The steel industry has bounced back
• Scheme/Programme-wise mapping of officials of the
with an increase of 25.0percent and 28.9percent respectively.
Ministry for fast-track responses of grievances.
• Coal: Coal is the most important and abundant fossil fuel in
• Integration with various portals such as MSME Samadhaan,
India and accounts for a 55percent of the country’s energy
Udyam Registration, CPGRAM, etc.
needs. Coal production increased by 12.24 percent in April-
October 2021 as compared to (-) 3.91 percent in April- PARAKH - A Unified Laboratory Network
October 2020.
• Recognizing that testing and certification are crucial
• Micro Small Medium Enterprise: Micro, Small &
for enhancing the competitiveness of Indian goods and
Medium Enterprises (MSMEs) contribute significantly to
services, a portal called “PARAKH” has been set up in
the economic and social development of the country by
June 2021, wherein all the accredited, certified and
fostering entrepreneurship and by generating employment
recognized laboratories in the country would be mapped
opportunities. The relative importance of MSMEs can be
on a Geographic Information System (GIS).
gauged from the fact that the share of MSME GVA in total
GVA (current prices) for 2019-20 was 33.08 percent. • This united laboratory network has been developed with
the support of the Ministry of Electronics and Information
• New Definition of MSME
Technology (MEITY), Bhaskaracharya National Institute
of Space Applications and Geo-Informatics, Gujarat
(BISAG), and the concerned line ministries/ departments
of the Government of India.

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Production Linked Incentives Schemes Connecting PILLARS OF INDIA PM-GATI SHAKTI

• PLI Schemes launched in March 2020, are a cornerstone • Another milestone achieved that has heralded a new
of the Government’s push for achieving an AtmaNirbhar chapter in governance is the PM Gati Shakti an integrated
Bharat. plan ensuring multi-modal and seamless connectivity
• The idea is to provide support to the sectors, regain for people, goods, and services. It covers16 ministries
dominance in global trade and be more prepared for the and infrastructure like Bharatmala, Sagarmala, inland
volatilities and shocks in global supply chains as opposed waterways, dry/land ports, UDAN, etc. It is also expected
to the protectionist approach of the pre-1991 era. to include social infrastructures like hospitals and
• The objective of the scheme is to boost domestic universities.
manufacturing in sunrise and strategic sectors, improve • GATI-SHAKTI will improve connectivity and make Indian
the cost competitiveness of domestically manufactured businesses more competitive. It will also leverage
goods, and enhance domestic capacity and economies technology extensively including spatial planning tools
of scale. with ISRO imagery developed by Bhaskaracharya National
Institute for Space Applications and Geoinformatics
• PM MITRA inspired from 5F’s -farm to fiber; fiber to factory;
factory to fashion; fashion to foreign -will strengthen the textile Transitioning to clean energy
sector by developing integrated large scale and modern
• The two main pillars for mitigation action to achieve net-
industrial infrastructure facility for entire value-chain of the
zero carbon ambition are transition to clean and renewable
textile industry.
sources of energy and storage of this energy.
 Pharmaceuticals: Indian Pharmaceutical industry ranks
• The World Bank in its report Minerals for Climate Action
third in the world in pharmaceutical production by volume.
has in its report mentioned that this transition from
India is the largest supplier of generic medicines with a
conventional fossil fuel-based energy to clean energy
20percent share in the global supply.
as well as battery storage will be more mineral intensive.
 Price competitiveness and good quality has enabled
Minerals and metals like copper, aluminium, iron,
Indian medicines producers to be dominant players in the
manganese, nickel, etc. are critical for developing clean
world market, thereby making the country the “Pharmacy
energy sources like solar PV, wind, nuclear while minerals
of the world”.
like lithium and graphite are important for energy storage.
INFRASTUCTURE
• Public-Private Partnership in infrastructure has been an Conclusion
important source of investment in the sector. As per the Initiatives under Atma Nirbhar Bharat including introduction of
database of the World Bank on private participation in structural and procedural reforms, record vaccinations, various
infrastructure, India is ranked second among developing PLI scheme designed to attract investments in sectors of core
countries both by the number of PPP Projects as well as the competency and cutting edge technology, Make-in-India pro-
associated investments. gramme to boost domestic manufacturing capacity, reduction of
• The government launched the Viability Gap Funding (VGF) corporate tax rate, etc. and steps to improve operational efficien-
scheme for providing financial assistance to financially cy have helped the industrial sector to keep up its ante. The sec-
unviable but socially/ economically desirable PPP projects. tor has started to recover steadily and according to the National
• The Government of India has in November 2020 approved Statistical Office, is expected to grow at 11.8 percent in 2021-22.
the continuation of and revamping of the Scheme for The recovery of the industrial sector, positive business expec-
tations propelled by extensive reforms and improved consumer
Financial Support to Public-Private Partnerships (PPPs) in
demand, suggests that further improvements in the industrial per-
Infrastructure Viability Gap Funding (VGF) Scheme till 2024- formance can be expected.
25.

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Summary by NEXT IAS
JAY HO:
09 AYUSHMAN BHARAT'S JAN AROGYA
CHAPTER YOJANA (JAY) AND HEALTH OUTCOMES
Introduction hotels, transport, communication & services related to

The services sector contributes over 50 percent to India’s broadcasting.
GDP. While the Covid-19 pandemic has hurt most sectors of • The sub-sector ‘Public administration, defences & other
the economy, the services sector has been the worst affected services’ includes expenditure by the government on one
as its’ share in India’s GVA declined from 55 percent in 2019- hand and services such as health, education, recreation,
20 to 53 percent in 2021-22. The impact has been much etc., on the other, contracted by 4.6 percent YoY in 2020-21.
severe on contact-based services such as tourism, retail • The relatively less contact intensive sub-sector ‘Financial,
trade, hotel, entertainment, recreation, etc. real estate & professional services’ was the least impacted,
with a marginal decline of 1.5 percent YoY in its GVA during
Major Highlights 2020-21.
• During the first half of 2021-22, the Services sector grew
by 10.8 percent.
• GVA of ‘Trade, hotels, transport, communication & services
related to broadcasting’ remains below its pre-pandemic
level. The overall Services sector GVA is expected to grow
by 8.2 percent in 2021-22.
• High-frequency indicators such as services purchasing
managers’ index, air freight, and rail freight bottomed
out in 2020. The global issue of container shortage is
impacting port traffic.
• Services exports grew by 21.6 percent, deriving strength • Gross Value Added (GVA) of the services sector is estimated
from global demand for software and IT services exports. to grow by 8.2 percent in 2021-22. Sub-sectors ‘Trade,
India’s share in world commercial services exports hotels, transport, communication & broadcasting services’,
increased to 4.1 percent in 2020. ‘Financial, real estate & professional services, and ‘Public
• The Government undertook a major reform of removing administration, defence & other services’ are estimated
telecom regulations in the IT-BPO sector. As per a survey to expand by 11.9 percent, 4 percent, and 10.7 percent
conducted by NASSCOM, these reforms have reduced respectively in 2021-22.
compliance burden, enhanced productivity, increased
SERVICES SECTOR SHARE AT THE STATE AND UT LEVEL
global competition, and lowered the cost of doing
business in India. • The services sector accounts for more than 50 percent of the
Gross State Value Added (GSVA) in 12 out of the 33 states
• During the first half of 2021-22, the Services sector
and UTs.
received over US$ 16.7 billion FDI accounting for almost
54 percent of the total FDI inflows into India. • Chandigarh stands out with a particularly high share of
services in GSVA at 74 percent while Sikkim’s share remains
• India has become the third-largest start-up ecosystem in
the lowest at 24.25 percent.
the world after the US and China. Further, a record 44
Indian start-ups have achieved unicorn status in 2021 • Notably, the Services share in Sikkim’s GSVA has increased
taking the overall tally of unicorns in India to 83, most of from over 18 percent in 2018-19 to over 24 percent in 2020-
these are in the services sector. 21.
• Sikkim achieved the highest growth of 11.71 percent in
IMPACT OF COVID-19 AND SEQUENTIAL RECOVERY services GSVA during 2020-21.
• The services sector contracted by 8.4 percent Year on FDI INFLOWS INTO THE SERVICES SECTOR
Year (YoY) in 2020-21. This decline was driven by a sharp • The services sector is the largest recipient of FDI inflows in
contraction of 18.2 percent YoY in the sub-sector ‘Trade, India. According to the World Investment Report 2021 by the

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Summary by NEXT IAS
UN Conference on Trade and Development (UNCTAD), India stringent and restrictive as they involved considerable
was the fifth-largest recipient of Foreign Direct Investment paperwork, required permissions for every drone flight, and
(FDI) in 2020 improving its rank by four places, from the ninth very few “free to fly” green zones were available.
position in 2019. Key features of Drone Rules 2021 include:
• In 2020-21, India registered the highest ever annual FDI • Several approvals were abolished; with the total forms to
inflows of US$ 81.97 billion. be filled reduced from 25 to 5: Various approvals such as
unique authorization number, unique prototype identification
TRADE-IN SERVICES SECTOR number, certificate of manufacturing, and operator permit,
• In 2021 so far, world trade in services has shown signs of etc. have been done away with. Certain exemptions have
recovery as a result of worldwide extensive inoculation and also been introduced for Nano/micro drones.
resumption in global economic activity.
• According to WTO, global services trade returned to positive
growth territory in April-June 2021, rising 26 percent YoY
largely reflecting the rebound from the same period last year,
the quarter in which the strongest impact due to Covid-19
was felt.
 Services exports: India has a dominant presence in

global services exports. It remained among the top ten
services exporter countries in 2020, with its share in world
• Type of fees reduced from 72 to 4.
commercial services exports increasing from 3.4 percent
in 2019 to 4.1 percent in 2020. • Extended applicability of rules
 Services imports: India’s services imports exhibited a • Simplified and accessible certification process
sharper decline of 8.4 percent in 2020-21 in comparison • Prior security clearance removed
with services exports primarily on account of a fall in travel • Expanded area of drone operations
and transportation payments. During H1 2021-22, the • Relaxations on foreign companies
growth of services imports was 20.7 percent on account • No remote pilot license required
of relaxation in lockdown restrictions and resumption in • Relaxations for Research and Development (R&D)
domestic economic activity.
• Reduced penalties
Sagarmala Programme
Start-ups
• The Sagarmala program is the flagship program of the • Startups in India have grown remarkably over the last six
Ministry of Ports, Shipping, and Waterways to promote years, most of these belong to the services sector.
port-led development in the country by taking advantage of • India had a record number of start-ups (44) reach unicorn
India’s 7,500 km long coastline, 14,500 km long potentially status in 2021. It overtook the UK to emerge as the third
navigable waterways, and the strategic location on major highest country in a number of unicorns after the US and
maritime trade routes China which added 487 and 301 unicorns respectively in
2021.
Note: India accounts for only about 2 percent of the space
economy, much behind the major players – USA and • As of January 14, 2022, India has 83 unicorns with a total
valuation of US$ 277.77 billion.
China.
• Over the recent years, Delhi has replaced Bangalore as the
Drone Rules, 2021 startup capital of India.
• In March 2021, the Ministry of Civil Aviation (MoCA) published • With a total of 11,308 startups, Maharashtra has the highest
the UAS Rules, 2021. These Rules were considered too number of recognised startups.

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Summary by NEXT IAS
THE BARE NECESSITIES

10
CHAPTER
Introduction: Health Organisation (WHO) guidelines and global best

• The need for a strong and resilient social infrastructure practices, India’s National COVID Vaccination Program has
became even more important during the ongoing COVID-19 been one of the world’s largest vaccination programs.
pandemic that brought into focus the vulnerabilities in social • National Expert Group on Vaccine Administration for
infrastructure across countries. Specifically, pandemic posed COVID-19 (NEGVAC) on the basis of concurrent scientific
the challenge of balancing livelihoods while saving lives. To evidence guided the program. The program was envisioned
save lives and livelihoods amidst the COVID-crises, countries to vaccinate all eligible beneficiaries aged 18 years and
have adopted various strategies. India, the country with the above in the shortest possible time.
second largest population and a large elderly population,
adopted a multi-pronged approach.
Availability of Vaccine:
• Given the nature of pandemic, the health response including
vaccination strategy remained critical. India, one of the young
nations in the world, also faced the challenge to sustain the
learning outcomes in schools, building skills and reskilling
population, employment and livelihood to one of the largest
labour forces in the world. Government’s response through
‘Aatma Norther Bharat Abhiyan’ packages and other sector
specific initiatives have provided the necessary support to
mitigate the adverse impact of pandemic.
INDIA’S HEALTH RESPONSE TO THE COVID-19

• Like most other countries, India also faced two COVID-19
waves: first in 2020 and second in 2021. • The country started with two Made in India COVID vaccines.
• During the first-wave, the cumulative number of COVID-19 India’s first domestic COVID-19 vaccine, Whole Virion
cases started rising progressively from the month of May Inactivated Coronavirus Vaccine (COVAXIN), was developed
2020, and peaked in mid-September 2020. and manufactured by Bharat Biotech International Limited
• Thereafter, the country faced a massive surge in COVID-19 in collaboration with National Institute of Virology of Indian
cases starting March 2021, with a peak of more than four Council of Medical Research (ICMR).
lakhs daily cases1 in May 2021 and more than 4400 daily • The ICMR funded the clinical trials of the COVISHIELD vaccine
deaths by the end of May 2021. developed in collaboration with Oxford – AstraZeneca.
• A fresh surge of cases and a new variant Omicron had • Besides, manufacturing of COVID-19 vaccines viz., Sputnik-V,
surfaced in December 2021 and was spreading at the time of ZyCoV-D, recombinant (Ad26.COV2-S) have also been given
writing. emergency use authorization by the regulatory authority.
• To save lives, the Government adopted a multi-pronged Moreover, import of COVID-19 Vaccines viz., Sputnik-V,
approach viz., (i) restrictions/partial lockdowns, (ii) building Moderna, and recombinant (Ad26.COV2-S) have also been
capacity in health infrastructure, (iii) COVID-19 appropriate permitted.
behavior, testing, tracing, treatment, and (iv) vaccination
drive. Pricing and equity
• At all Government COVID-19 Vaccination Centres (CVCs),
COVID Vaccination Strategy COVID-19 vaccines were made available free of cost for all
• Guided by scientific and epidemiological evidence, World eligible citizens. Except for about 4-5 percent of total doses

35
Summary by NEXT IAS
administered in the country, rest have been administered at 25 percent of the total Government expenditure (Centre and
Government COVID-19 Vaccination Centres. States taken together). In 2021-22 (BE), it was 26.6 percent.
• Technology driven: Arogya Setu mobile app was launched • Expenditure on the health sector increased from 2.73 lakh
to enable people to assess themselves the risk of their crore in 2019-20 (pre-COVID-19) to ` 4.72 lakh crore in 2021-
catching the COVID-19 infection. It calculates the risk of 22 (BE), an increase of nearly 73 percent. For the education
infection based on a person's interaction with others, using sector, the increase during the same period was 20 percent.
Bluetooth technology, algorithms and artificial intelligence. • The Central and State Governments’ budgeted expenditure
• Co-WIN 2.0 (along with e-VIN), a unique digital platform, on the health sector reached 2.1 percent of GDP in 2021-22,
supported the real-time vaccination activities viz., registration against 1.3 percent in 2019-20.
for vaccine, tracking COVID-19 vaccine status of every
beneficiary, stocks of vaccine, storage, actual vaccination
EDUCATION
process, and generation of digital certificates. • During initial COVID-19 restrictions, as a precautionary
measure to protect the students from COVID-19, schools
• Vaccination Progress: As on 16th January 2022, a total
and colleges were closed across India. This posed a new
of 156.76 crore doses of COVID-19 vaccines have been
challenge for the Government in terms of continuity of
administered: 90.75 crore first dose and 65.58 crore second
education.
dose. Vaccination speed increased significantly once the
population between ages 18 to 45 years was permitted • Basic facilities in schools also improved in 2019-20 over
earlier years. Toilets (girls or boys), drinking water, and hand-
TRENDS IN SOCIAL SECTOR EXPENDITURE washing facilities are now available in most Government
• Government’s spending on social services increased schools (10.32 lakh). Priority to drinking water and sanitation
significantly during the pandemic. in schools under Jal Jeevan Mission, Swachh Bharat
Mission as well as under Samagra Shiksha Scheme have
• In 2021-22 (BE), Centre and State governments earmarked
been instrumental in providing required resources and
an aggregate of ` 71.61 lakh crore for spending on social
creating these assets in schools.
service sector; an increase of 9.8 percent over 2020-21.
• As on 19.01.2022, Further, availability of teachers, measured
• Last year’s (2020-21) revised expenditure has also gone
by Pupil Teacher Ratio, an indicator whose decrease signals
up by 54,000 crores from the budgeted amount. In 2021-22
improvement in quality of education, has improved at all
(BE), funds to the sector increased to 8.6 percent of Gross
levels continuously from 2012-13 to 2019-20: from 34 to 26
Domestic Product (GDP) (8.3 percent in 2020-21).
at primary, 23 to 18 at upper primary, 30 to 18 at secondary,
• During the last five years, social services accounted for about and 39 to 26 at higher secondary level.

36
Summary by NEXT IAS
• In 2019-20, 26.45 crore children were enrolled in schools. 2021.

During the year, schools enrolled about 42 lakh additional
• Steps have been taken by the Government to minimize the
children, out of which 26 lakh were in primary to higher
adverse impact of the pandemic on the education system
secondary levels and 16 lakh were in pre-primary as per
to address the concerns raised through private studies
Unified District Information System for Education plus
undertaken during the pandemic period. Almost all enrolled
(UDISE+) database.
children have textbooks for their current grade (91.9 percent).
• Year 2019-20 saw improvement in gross enrolment ratios
• Gross enrolment ratio in higher education recorded at 27.1
(GER) at all levels and improvement in gender parity. GER
percent in 2019-20, slightly higher from 26.3 percent in 2018-
in primary – enrolment in class 1st to 5th as a percentage of
19. For males, it has also increased from 26.3 percent in
population in age 6 to 10 years - for girls as well as boys have
2018-19 to 26.9 percent in 2019-20 while for females it has
improved in 2019-20.
increased from 26.4 percent to 27.3 percent respectively
• GER in upper-primary (enrollment in class 6 to 8 as a percent
of population in age 11-13 years), which was stagnant Recent Initiatives in Higher Education
between 2016-17 and 2018-19, improved in 2019-20.
• Government has taken multiple initiatives aimed at
School Drop-out
revolutionizing the higher education ecosystem by (i) enabling
• Year 2019-20 saw decline in dropout rates11 at primary,
higher vocationalisation, (ii) greater multi-disciplinary
upper-primary, and secondary levels. In 2019-20, school
research, (iii) providing multiple entry and exit points, (iv)
dropout rate at primary level declined to 1.45 percent from
promoting globalization of education, (v) leveraging the
4.45 percent in 2018-19. The decline is for both girls and
potential of Information and Communication Technology (ICT)
boys.
in teaching and learning process for all learners.
• ASER found that despite the pandemic, enrolment in the age
cohort of 15-16 years continued to improve as the number of National Apprenticeship Training Scheme (NATS):
not enrolled children in this age group declined. • It has been extended for the next five years with an outlay of
• However, the ASER (Rural) report also found that during the 3054 crores which will make, through apprenticeship, around
pandemic, children (age 6-14 years) ‘not currently enrolled in 9 lakh students employable.
schools’ increased from 2.5 percent in 2018 to 4.6 percent in • Academic Bank of Credit, launched on 29.07.2021, would

37
Summary by NEXT IAS
digitally store the academic credits earned from various improved in 2019-20 over 2018-19.
recognized Higher Educational Institutions (HEI) such that • The improvement in skills has also been for males and
credits so earned can be accounted for award of degree by females, both in rural and urban sectors. However, formal
any given HEI.. training for males and females is lower in rural areas than in
• e-PGPathshala: 154 Universities have come on board urban areas.
for accepting credit transfer for courses offered through
SWAYAM platform till now, thereby boosting mainstreaming Pradhan Mantri Kaushal Vikas Yojana (PMKVY)
of Massive Online Open Courses (MOOCs). • PMKVY has two training components, viz., Short Term
• Unnat Bharat Abhiyan: The objective of the scheme is to Training (STT) and Recognition of Prior Learning (RPL).
engage reputed higher educational institutions (central and Between 2016-17 and 2021-22 (as on 15 January 2022),
state; public and private) to understand and work in rural under PMKVY 2.0 about 1.10 crore persons were trained, 83
areas. percent certified and about 21 lakhs placed. In 2021-22,
• Scholarships for weaker sections: scholarship schemes • As on 15.01.2022, 1.26 lakh migrants have been trained /
(such as Central Sector Scheme of Scholarship for College oriented (0.88 lakh in STT and 0.38 lakh in RPL).
and University Students which has benefited over 1.5 lakh • Recognition of Prior Learning (RPL): RPL’s objectives are
students in 2021-22 as of November. (i) to align the competencies of the unorganized workforce of
the country with the standardized National Skill Qualification
SKILL DEVELOPMENT Framework; (ii) to enhance the opportunities for employment
• Periodic Labour Force Survey (PLFS) 2019-20 shows that and provide alternative means for higher education; (iii) to
formal vocational / technical training among youth (age 15- provide opportunities for reducing inequalities.
29 years) and working population (age 15-59 years) have
Aatmanirbhar Skilled Employees Employer Mapping around 26.7 lakh migrant’s data/profiles are also available on
(ASEEM) portal the portal. The Portal consists of three IT based AI (artificial
• ASEEM, a digital platform, created to match supply of skilled intelligence) driven interfaces for stakeholder interactions:
workforce with the market demand, acts as a directory of
Pradhan Mantri Dakshta Aur Kushalta Sampann
skilled workforce. As on 31.12.2021, 1.38 crore candidates
Hitgrahi Yojana (PM-DAKSH)
have been registered on the portal including candidates
• PM-DAKSH Yojana is a national action plan for skilling of
registered on Skill India Portal (SIP). As on 31.12.2021,
marginalized persons including scheduled castes, backward

38
Summary by NEXT IAS
classes and safai karamcharis. The eligible target group crores, from ` 61,500 crore in FY 2020-21. Allocation for
are being provided skill development training programmes FY 2021-22 has been enhanced to Rs 98000 crore so far.
on (i) up-skilling/reskilling (ii) short term training programme In FY 2021-22 over 8.70 crore individuals and 6.10 crore
(iii) long term training programme and (iv) entrepreneurship households were provided work so far.
development programme. During the year 2021-22, a • To boost employment and livelihood opportunities for
target has been set to provide skill development training to returnee migrant workers, Garib Kalyan Rojgar Abhiyaan was
approximately 50,000 persons of the target groups. launched in June 2020. It focused on 25 target-driven works
to provide employment and create infrastructure in the rural
Trends in Urban employment using Quarterly PLFS areas of 116 districts of 6 States with a resource envelope of
data Rs 50,000 crore.
• Before the outbreak of COVID-19, the urban labor market
had shown signs of improvement in terms of labour force Boosting Self-employment
participation rate (LFPR), Worker population ratio (WPR) and • The Deendayal Antyodaya Yojana – National Rural Livelihoods
Unemployment rates (UR). Mission (DAY-NRLM), launched in 2011, targets to mobilise
• In the first quarter of 2020-21, the unemployment rate for the about 9-10 crore households into Self Help Groups (SHGs).
urban sector rose to 20.8 percent. The LFPR and WPR in the It is to link them to sustainable livelihood opportunities by
urban sector also declined significantly during this quarter. building their skills and enabling them to access formal
• With the revival of the economy in the subsequent quarters sources of finance, entitlements and services from both
of 2020-21, all three labour market indicators showed a swift public and private sectors.
recovery.
Social protection
• The UR gradually declined during this period to reach 9.3 per
• Pradhan Mantri Shram Yogi Maan-Dhan (PM-SYM)
cent in Q4 of 2020-21.
Yojana: it is a voluntary and contributory pension scheme
Trends in data on demand for work under MGNREGS for providing a monthly minimum assured pension of 3000 on
attaining the age of 60 years.
• The demand for work under Mahatma Gandhi National Rural
Employment Guarantee Scheme (MGNREGS) is an indicator • National Pension Scheme for Traders, Shopkeepers and
of rural labour markets Self-Employed Persons: It is a voluntary and contributory
pension scheme for providing a monthly minimum assured
• An analysis of the latest data on demand for work under
pension of 3000 after attaining the age of 60 years. The
MGNREGS suggests the following trends in the rural labour
traders, shopkeepers and self-employed persons in the age
market: (i) MGNREGS employment peaked during the nation-
group of 18-40 years with an annual turnover not exceeding
wide lockdown in 2020 (ii) the demand for MGNREGS work
1.5 crore and are not members of EPFO/ESIC/NPS (Govt.
has stabilized after the second COVID wave; (iii) aggregate
funded)/PM-SYM or not an income tax payer, can join the
MGNREGS employment is still higher than pre-pandemic
scheme.
level.
Policy responses to boost rural livelihood Status of Labour Reforms

• In 2019 and 2020, 29 Central Labour laws were amalgamated,
Incentives for job creation
rationalized and simplified into four labour codes, viz.,
• Aatmanirbhar Bharat Rojgar Yojana (ABRY) was announced
the Code on Wages, 2019 (August, 2019), the Industrial
as a part of Aatmanirbhar Bharat 3.0 package to boost the
Relations Code, 2020, the Code on Social Security, 2020,
economy, increase the employment generation in post COVID
and the Occupational Safety, Health & Working Conditions
recovery phase and to incentivize creation of new employment
Code, 2020 (September, 2020).
along with social security benefits and restoration of loss of
employment during COVID-19 pandemic. HEALTH
• Under ABRY, the Government of India is crediting for a period Programmes and Schemes for Health Sector
of two years both the employees’ share (12 percent of wages)
• Ayushman Bharat Health and Wellness Centres (AB-
and employers’ share (12 percent of wages) of contribution
HWCs): It adopts a continuum of care approach, comprising
payable or only the employees’ share, depending on
two interrelated components. The first component is creation
employment strength of the EPFO registered establishments.
of 1,50,000 Health and Wellness Centres (HWCs) which
cover both, maternal and child health services and non-
Wage employment
communicable diseases, including free essential drugs and
• Allocation to MGNREGS in FY 2021-22 increased to 73,000

39
Summary by NEXT IAS
diagnostic services. Expectation of life at birth for India are available for 2014-18.
• Ayushman Bharat Pradhan Mantri Jan Arogya Yojana Life expectancy at birth was 69.4 years for the period 2014-
(AB-PMJAY): The scheme provides a health cover of ` 5 18; it has increased by 0.4 years from 2013-17.
lakhs per family per year for secondary and tertiary care
hospitalization to over 10.74 crores poor and vulnerable
Total Fertility rate
families in the bottom 40 percent of the Indian population. • Latest NFHS-5 shows that Total Fertility Rate (TFR), an
average number of children per woman, has further come
• PM-Ayushman Bharat Health Infrastructure Mission (PM-
down to 2 in 2019-21 from 2.2 in 2015-16 (Table 13).
ABHIM) is a mission to develop the capacities of primary,
secondary, and tertiary care health systems, strengthen • Use of family planning methods has increased from 53.5
existing national institutions, and create new institutions, to percent in 2015-16 to 66.7 percent in 2019-21.
cater to detection and cure of new and emerging diseases. • Institutional delivery has increased to 88.6 percent in 2019-
• Pradhan Mantri Swasthya Suraksha Yojana (PMSSY): 21 compared to 78.9 percent in 2015-16.
Under PMSSY, construction of 22 new All India Institutes
Sex Ratio
for Medical Science (AIIMS) and 75 Government Medical
• Sex ratio, number of females per 1000 males, in the total
College up-gradation Projects has been approved and taken
population has risen from 991 females in 2015-16 (NFHS-4)
up for implementation.
to 1020 in 2019-21 (NFHS-5). More importantly, sex ratio at
• Ayushman Bharat Digital Mission (ABDM), erstwhile
birth, female children per 1000 male children born in the last
National Digital Health Mission (NDHM), announced
five years, has grown from 919 in 2015-16 to 929 in 2019-21.
on 27th September, 2021 with the aim to develop the
backbone necessary to support the integrated digital health DRINKING WATER AND SANITATION
infrastructure of the country.
Jal Jeevan Mission (JJM)
• e-Sanjeevani: In wake of COVID-19 pandemic, Ministry
• Rolled out in August 2019, JJM envisioned to provide
of Health and Family Welfare upgraded e-Sanjeevani
adequate safe drinking water through individual household
application to enable patient-to-doctor tele-consultation to
tap connections to all households in rural India by 2024. The
ensure continuum of care and facilitate health services to all
goal of the Mission is to enable every rural household to get
citizens in the confinement of their homes free of cost.
assured supply of potable-piped water at a service level of 55
litre per capita per day (lpcd) regularly on a long-term basis.
Health Outcome Indicators
• The mission will benefit more than 19 crore rural families or
• As per latest National Family Health Survey (NFHS)-5, social
more than 90 crores rural population.
indicators such as total fertility rate, sex ratio and health
outcome indicators viz., infant mortality rate, under-five • Total outlay for the mission is Rs 3.60 lakh crores.
mortality rate, institutional birth rates have improved over • In 2019, out of about 18.93 crore families in rural areas,
year 2015-16. about 3.23 crore (17 percent) rural families had tap water
connections in their homes.
Child Health Indicators • Six States/ UTs have achieved the coveted status of 100
• NFHS-5 also shows that not only services are reaching the percent households with tap water supply.
public but the intended outcomes have also improved. All
child nutrition indicators have also improved at all India Swachh Bharat Mission (Grameen) [SBM-G]
levels. Under Five Mortality Rate (U5MR) has declined from • Rural sanitation has made tremendous progress under
49.7 in 2015-16 to 41.9 in 2019-21. Infant Mortality Rate (IMR) SBM-G since its inception on 2nd October, 2014. Since
has declined from 40.7 per 1000 live births in 2015-16 to 35.2 inception till 28.12.2021, more than 10.86 crore toilets have
per 1000 live births in 2019-21. been built in rural India.
• Stunting has declined from 38 percent in 2015-16 to 36 percent • Open Defecation Free (ODF) Plus under Phase II of SBM(G)
in 2019-21. Wasting has also declined from 21 percent in is being implemented from 2020-21 to 2024-25 with a goal of
2015-16 to 19 percent in 2019-21. And, underweight declined making all the villages Open Defecation Free (ODF) through
from 36 percent in 2015-16 to 32 percent in 2019-21. convergence between different verticals of financing and
various schemes of Central and State Governments.
Life Expectancy
• As per the recently released findings of the fifth round of the
• Report on ‘Sample Registration based System (SRS) based
National Family Health Survey, 2019-21 (NFHS-5), population
Abridged Life Tables 2014-18’ provides estimates of
living in households that use an improved sanitation facility
average longevity at various age groups Latest estimates of

40
Summary by NEXT IAS
has increased from 48.5 percent in 2015-16 to 70.2 percent • As on 18th January 2022, 2.17 crore houses have been
in 2019-21. sanctioned and 1.69 crore houses completed against a
• Electricity and Clean Cooking Fuel: Government has made target of 2.63 crore houses till 2021-22.
efforts to increase access to clean fuel for cooking through
the Pradhan Mantri Ujjwala Yojana (PMUY). As per NFHS-5,
Pradhan Mantri Gram Sadak Yojana (PMGSY)
58.6 percent of households were using clean fuel for cooking • As on 18.01.2022, a total of 1,82,506 roads measuring
in 2019-21, a significant increase from 43.8 percent in 2015- 7,82,844 km and 9,456 Long Span Bridges (LSBs) have been
16. sanctioned and 1,66,798 roads measuring 6,84,994 km and
6,404 LSBs have been completed.
• Government has made efforts through schemes such as
SAUBHAGYA Yojana to ensure ‘Power for all.’ As per latest Multidimensional Poverty
NFHS, households with electricity have increased from 88
• Using the NFHS-4 (2015-16) report, in line with the global
percent in 2015-16 to 96.8 percent in 2019-21.
Multidimensional Poverty Index (MPI), NITI Aayog prepared
RURAL DEVELOPMENT a Multidimensional Poverty Index at the national level, for
all states and districts of India. It will enable measuring
• Pradhan Mantri Awaas Yojana-Gramin (PMAY-G): PMAY-G,
deprivation across twelve indicators at national, States and
launched on 20th November 2016, envisages ‘Housing for
districts level.
All by 2022’ through a robust monitoring mechanism and
improved scheme architecture. It aims to provide assistance • In 2015-16, 25 percent households were found to be
for construction of 2.95 crore houses. multidimensional poor in India. Among states,
• In the first phase from 2016-17 to 2018-19, one crore houses • Bihar had the largest (51.91%) multidimensional poor
were taken up. Under phase II, assistance is being provided households, followed by Jharkhand (42.16%) and Uttar
for construction of remaining 1.95 crore houses in 2019-20 to Pradesh (37.79%).
2021-22.

41
Summary by NEXT IAS
11 TRACKING DEVELOPMENT THROUGH

SATELLITE IMAGES AND CARTOGRAPHY
CHAPTER
Introduction Kharif crop cycle

• An important theme of this year’s Economic Survey is the use • Kharif crop cycle has been compared of Moga district
of new forms of data and information for tracking economic in Punjab. The images show that the Kharif sowing cycle
activity and development. Chapter 1 looked at the use of has shifted ahead by around two-to-three weeks causing
high-frequency data for the real-time management of an the Kharif harvest to almost coincide with Rabi sowing
economy through uncertain times. This chapter looks at the in November. The closing of the gap is a likely factor that
use of another kind of data – geospatial data and cartographic encourages farmers to burn stubble and may be related to
techniques – to track, compare and represent longer-term restrictions on the early transplanting of Kharif paddy. These
developments. restrictions were introduced in 2009 to reduce the pumping of
groundwater but may have had the unintended consequence
Night light luminosity of damaging air quality.
• Using satellite images, India’s night-time luminosity is
compared between 2012 and 2021. Night-time luminosity Conclusion
provides an interesting representation of the expansion of • While this chapter has restricted itself to static two-dimensional
images due to practical considerations of publication,
electricity supply, the geographical distribution of population
readers will be aware that dynamic and multi-dimensional
and economic activity, urban expansion as well as the growth cartography is now commonplace for everyday activities
of ribbon developments between urban hubs. like ordering a taxi or looking for an address. However,
• Similarly, using geospatial and cartographic techniques, The Survey is quite optimistic that overall macro-economic
stability indicators suggest that the Indian Economy is well
the subsequent maps show the extent of physical as well as
placed to take on the challenges of 2022-23 and one of the
financial infrastructure development in India. This includes reasons that the Indian Economy is in a good position is its
expansion of national highways, airports, commercial bank unique response strategy.
branches, metros, etc.
Operational Airports in India (2016) Operational Airports in India (2021)

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Summary by NEXT IAS

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01 STATE OF THE ECONOMY

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pandemic level. safety-nets to cushion the impact on vulnerable sections

Vaccine economics • India is emphasizing on supply side reforms: rather than

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Share of Sectors in Nominal GVA

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Introduction businesses, and the world’s largest food subsidy programme

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• The non-tax revenue collections up to November 2021 Tax Revenue

• The Budget 2021-22 envisaged a growth of 16.7 per cent in

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State Finances  Enhanced limit of borrowing for the States

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Introduction • The impact on trade-in value terms varied significantly across

GLOBAL ECONOMIC ENVIRONMENT

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TRADE-IN SERVICES BOP BALANCE AND FOREIGN EXCHANGE RESERVES

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04 MONETARY MANAGEMENT AND FINANCIAL

INTRODUCTION repo auctions (like Variable Rate Reverse Repo (VRRR)).

LIQUIDITY CONDITIONS AND THEIR MANAGEMENT

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INSURANCE SECTOR access to local assets before funds go to the foreign

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05 PRICES AND INFLATION

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General inflation based on different price indices

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SUSTAINABLE DEVELOPMENT AND CLIMATE

Introduction: increase of 12, 10 and 8 points respectively.

Performance of States and UTs on the NITI Aayog SDG

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Water • Under the Nirmal Ganga (Unpolluted Flow) component of

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Augmenting Finance for Sustainable Development International Solar Alliance (ISA)

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INNOVATION: TRENDING UP BUT NEEDS

Introduction negative growth of 0.7 growth in October 2020.

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Production Linked Incentives Schemes Connecting PILLARS OF INDIA PM-GATI SHAKTI

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Introduction hotels, transport, communication & services related to

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 Services exports: India has a dominant presence in

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THE BARE NECESSITIES

Introduction: Health Organisation (WHO) guidelines and global best