2016

Career Anna
RBI ESI E Book 2

Career Anna

Numericals in ESI will usually revolve around National Income, GDP,

GNP related questions and in this e book we bring to you how to deal
with such questions, formulaes, solved examples and more.
There are various concepts of National Income. The main concepts of
National Income are: GDP, GNP, NNP, NI, PI, DI, and PCI.
These different concepts explain about the phenomenon of economic
activities of the various sectors of the various sectors of the economy.

Gross Domestic Product (GDP)

The most important concept of national income is Gross Domestic Product.
Gross domestic product is the money value of all final goods and services
produced within the domestic territory of a country during a year.

Algebraic expression under product method is,

GDP=(P*Q)

where,
GDP=Gross Domestic Product
P=Price of goods and service
Q=Quantity of goods and service
denotes the summation of all values.

According to expenditure approach, GDP is the sum of consumption,
investment, government expenditure, net foreign exports of a country
during a year.

Algebraic expression under expenditure approach is,

GDP=C+I+G+(X-M)

Where,
C=Consumption
I=Investment
G=Government expenditure
(X-M)=Export minus import

GDP includes the following types of final goods and services. They are:

1. Consumer goods and services.
2. Gross private domestic investment in capital goods.
3. Government expenditure.
4. Exports and imports.

Gross National Product (GNP)

Gross National Product is the total market value of all final goods and
services produced annually in a country plus net factor income from
abroad. Thus, GNP is the total measure of the flow of goods and services at
market value resulting from current production during a year in a country
including net factor income from abroad. The GNP can be expressed as the
following equation:

GNP=GDP+NFIA (Net Factor Income from Abroad)
or, GNP=C+I+G+(X-M)+NFIA

Hence, GNP includes the following:
1. Consumer goods and services.
2. Gross private domestic investment in capital goods.
3. Government expenditure.
4. Net exports (exports-imports).
5. Net factor income from abroad.

Net National Product (NNP)

Net National Product is the market value of all final goods and services
after allowing for depreciation. It is also called National Income at market

price. When charges for depreciation are deducted from the gross national
product, we get it.
Thus,

NNP=GNP-Depreciation

or, NNP=C+I+G+(X-M)+NFIA-Depreciation

National Income (NI)

National Income is also known as National Income at factor cost. National
income at factor cost means the sum of all incomes earned by resources
suppliers for their contribution of land, labor, capital and organizational
ability which go into the years net production. Hence, the sum of the
income received by factors of production in the form of rent, wages,
interest and profit is called National Income. Symbolically,

NI=NNP + Subsidies - Interest Taxes
or, GNP - Depreciation + Subsidies - Indirect Taxes
or, NI = C+G+I+(X-M)+NFIA-Depreciation-Indirect Taxes + Subsidies

Personal Income (PI)

Personal Income is the total money income received by individuals and
households of a country from all possible sources before direct taxes.
Therefore, personal income can be expressed as follows:

PI = NI - Corporate Income Taxes - Undistributed Corporate Profits -
Social Security Contribution + Transfer Payments

Disposable Income (DI)

The income left after the payment of direct taxes from personal income is
called Disposable Income. Disposable income means actual income which
can be spent on consumption by individuals and families. Thus, it can be
expressed as:

DI=PI-Direct Taxes

From consumption approach,

DI=Consumption Expenditure + Savings

Per Capita Income (PCI)

Per Capita Income of a country is derived by dividing the national income
of the country by the total population of a country. Thus,

PCI=Total National Income/Total National Population

Balance of Payments
According to the RBI, balance of payment is a statistical statement that
shows
1. The transaction in goods, services and income between an economy and
the rest of the world,
2. Changes of ownership and other changes in that economy's monetary
gold, special drawing rights (SDRs), and financial claims on and liabilities to
the rest of the world, and
3. Unrequited transfers.
Description: The transactions in BOP are categorised in

a) Current account showing export and import of visibles (also called
merchandise) and invisibles (also called non-merchandise). Invisibles take
into account services, transfers and income.

b) Capital account showing a capital expenditure and income for a country.

It gives a summary of the net flow of both private and public investment
into an economy. External commercial borrowing (ECB), foreign direct
investment, foreign portfolio investment, etc form a part of capital account.
c) Errors and omissions: Sometimes the balance of payment does not
balance. This imbalance is shown in the BOP as errors and omissions. BOP
is compiled using the double entry book keeping system consisting assets
and liabilities.

What is the basic structure of the balance of payments accounts?
Current Account
1. Balance of trade in goods
2. Balance of trade in services
3. Net primary income (this includes incomes from interest, profits,
dividends generated from foreign investment and also migrant
remittances i.e. payments from people living and working overseas)
4. Net secondary income

Capital account

Sale/transfer of patents, copyrights, franchises, leases and other

transferable contracts, and goodwill
Transfers of ownership of fixed assets

Financial Account
This includes transactions that result in a change of ownership of financial
assets and liabilities between UK residents and non-residents

Net balance of foreign direct investment flows (FDI)

Net balance of portfolio flows (e.g. inflows and outflows of debt and
equity)
Balance of banking flows (e.g. hot money flowing in/out of banking
system)

Balancing item (estimated errors & omissions)

Changes to the value of reserves of gold and foreign currency
Overall balance of payments = zero

The Balance of Payment Position of India on Current Account since
Independence:
With the introduction of planning in India, the balance of payments
position of the country has been recording considerable changes with the
continuous changes in its imports and exports.

Balance of Payments (BOP) Position during the First Four Plans:
The balance of payments position during the First Plan period was quite
satisfactory as the country experienced a deficit in its current account only
to the extent of Rs. 42.3 crore. In this period, the inflow of foreign capital
was only Rs. 13.6 crore and the foreign exchange reserve was about Rs. 127
crore.
During the Second Plan, the deficit in the balance of trade was to the tune of
Rs. 2,339 crore and the surplus of invisibles and donations ultimately
reduced the deficit in balance of payment to Rs. 1,725 crore. This higher
deficit in the balance of payment, during the Second Plan was resulted from
heavy imports of capital goods, huge imports of food grains and raw
materials and lesser expansion of exports and higher maintenance imports.
During the Third Plan the country experienced a current account deficit in
its BOP to the extent of Rs. 1,941 crore which was financed by loans from
foreign countries under various schemes. During the Fourth Plan, the
Government introduced both export promotion and import substitution
measures for wining out the deficits in the BOP. Moreover, due to sudden
increase in the invisibles accounts receipts to the extent of Rs. 1,680 crore
in 1973-74, the plan ended with a surplus of Rs. 100 crore in its BOP.

BOP During the Fifth Plan:

During the Fifth Plan period, due to the applicability of two factors like hike
in oil prices arid increase in the value of exports due to promotional
measures, although a surplus in trade balance was attained in 1976-77 (Rs.
316 crore) but the plan experienced an increasing trend in trade deficit to
the extent of Rs. 3,179 crore. But due to higher entry of net invisibles, the
Fifth Plan ended with surplus of Rs. 3,082 crore.

BOP During the Sixth to Tenth Plan:
The balance of payments position has recorded a total change since 197980. India started to record a heavy deficit in its balance of payments since
1979- 80.
Thus the table reveals that due to the mounting deficit in trade balance, i.e.,
from Rs. 5,967 crore in 1980-81 to Rs. 6,721 crore in 1984-85, India
maintained a huge deficit in its balance of payments to the extent of Rs.
11,384 crore during the Sixth Plan period. Again due to a persistent
growing deficit in trade balance the cumulative deficits in the balance of
payment during the Seventh Plan rose further to Rs. 38,313 crores,
showing the annual average deficit of Rs. 7,662 crore.
Again in 1990-91, total amount of deficits in the balance of payments was
as high as Rs. 17,369 crore. But in 1999-2000 and 2000-2001, the total
amount of deficits in the balance of payments was Rs. 20,331 crore and Rs.
11,431 crore respectively. In 2001-02, total surplus in BOP was Rs. 16,426
crore and the total surplus further increased to Rs. 47,952 crore in 200304. In 2008-09, total deficit in BOP was Rs. (-) 1,31,614 crore.
This huge deficit in the balance of payments position during the entire
Sixth, Seventh and Eighth and Ninth Plan periods was the result of
tremendous rate of growth of imports accompanied by a poor rate of
growth of exports. The trade deficits during these four plans were so heavy
that it could not be offset by the flow of funds under net invisibles.

Recovery in Balance of Payments Position in India since 1991-92, i.e.,

After Economic Reforms:
The balance of payments position, which had reached a point of near
collapse in June 1991, gradually stabilized during the course of 1991-92. In
1990-91, foreign currency reserves had declined to $ 1.1 billion despite
heavy borrowing from the IMF. In order to restore international
confidence, the Government negotiated a stand by arrangement with the
IMF in October 1991 for $ 2.3 billion over a 20 month period, a Structural
Adjustment Loan with the World Bank of $ 500 billion and a Hydrocarbon
Sector Loan with ADB for $ 250 million.
Along with this effort, the Government also launched the India
Development Bonds aimed at mobilizing NRI sources of funds. With the
assurance of external support through these efforts, the balance of
payments position was gradually stabilized in 1991-92 and the foreign
exchange reserves were restored to the level of $ 5.6 billion at the end of
March 1992.
Thus, the balance of payments position in India showed a steady
improvement since 1991-92 with exports covering a larger proportion of
imports than in the earlier years. The export-import ratio has averaged
nearly 90 per cent during 1991-92 to 1993-94 compared to an average of
about 65 per cent for the preceding three years.
In 1994-95, this export-import ratio stood at 91.9 per cent. The current
account deficit has also declined, averaging about 0.7 per cent of GDP for
these three years (1991-94), compared to an average of about 2.6 per cent
of GDP in the preceding three years.
In this connection, Economic Survey, 1995-96 observed, The development
in Indias trade and payments over the past five years mark a noticeable
structural change towards a more stable and sustainable balance of
payments. During the post-liberalization period, there has been a sharp
improvement in the coverage of import payments through export earnings.
The coverage ratio has averaged around 88 per cent since 1992-93,
compared with only 52.4 per cent at the beginning of the 1980s and about
70 per cent at the end of the 1980s. There has also been a marked
improvement in the flow of invisible receipts. Together, these changes
brought about a sharp reduction in the ratio of the current account deficit
to GDP from an unsustainable level of 3.2 per cent in 1990-91 to 0.8 per
cent in 1994-95.

There has been a structural change in the capital account in terms of a

sharp reduction in debt creating flows and an increased recourse to nondebt creating foreign investment flows. For example, debt creating flows, as
a percentage of total capital flow in the balance of payments, averaged as
much as 97 per cent during the Seventh Plan Period (1985-86 to 1989-90).
But the ratio declined very sharply to less than 18 per cent in 1994-95. This
declining trend is shared by all the major components of debts flows,
namely external assistance, commercial borrowing and non-resident
deposits. This favourable shift, away from recourse to debt creating flows
for financing the current account deficit, has obvious implications for
moderating and reducing future debt service liabilities.
During the recent years, the balance of payments position of the country
experienced a mixed scenario. The year 2004-05 marked a significant
departure in the structural composition of Indias balance of payment
(BOP), with the current account, after three consecutive years of surplus,
turning into a deficit. In a significant transformation, the current account
deficit, observed for 24 years since 1977-78, had started shrinking from
1999-2000.
The contraction gave way to a surplus in 2001-02, which continued until
2003-04. However, from a surplus of US $14.1 billion in 2003-04, the
current account turned into a deficit of US $5.4 billion in 2004-05. This
deficit was caused by a burgeoning excess of merchandise imports over
exports, which was left uncompensated by the net surplus in invisibles.
Which the magnitude of deficit is one of the highest in recent times, it
underscored the rising investment demand in the economy. As a
proportion of LSDPP, the turnaround in the current account balance was
from a surplus equivalent to 2.3 per cent in 2003-04 to a deficit of 0.8 per
cent in 2004-05.
The turnaround in the current account during 2004-05 was accompanied
by a significant strengthening of more than 80 per cent in the capital
account resulting in continued reserve accretion. Compared with 2003-04,
when loan inflows and turned not net outflows, such inflows shot up
rapidly during 2004-05 and bolstered the rise of the capital account
surplus with good support from robust foreign investment inflows. Reserve
accumulation during 2004-05, at around four-fifths of such accumulation
during 2003-04, maintained Indias status as one of the largest reserve
holding economies in the world.

Rise in Trade Deficit during 1995-96 and Thereafter:

Indias trade deficit during 1995-96 swelled to $ 4,538 billionmore than
double of the deficit of $ 2.027 billion in the previous financial year. The
countrys exports during 1995-96 were estimated at $ 31,830 billion
signifying growth of 21.38 per cent over the exports during the previous
fiscal year valued at $ 26,623 billion.
Against a target of 18 to 20 per cent growth rate for the year 1995- 96, the
actual achievement were considerably higher at 21.4 per cent in dollar
terms. Import during 1995-96 were estimated at $ 36,369 billion against $
28,251 billion during the previous fiscal year reflecting a growth of 28.74
per cent. Thus the rise in the trade deficit during 1995-96 has been resulted
mostly from the sudden spurt in imports, in spite of attaining a
considerable higher growth in exports.
1996-97:
The balance of payments position of India has been experiencing some
changes in the year 1996-97 as Indias exports went up by only 4.01 per
cent and imports grew by 5.99 per cent during 1996-97 as compared to
that of 21.58 per cent and 28.74 per cent recorded respectively during
1995-96.
1998- 99:
The balance of payments (BOP) position of India has been gradually
improving in recent years. Indias BOP remained comfortable in 1998-99
partly due to anticipatory policy actions, such as issue of Resurgent India
Bonds. The deficit in the current account of the BOP in 1998-99 had
declined to about 1.0 per cent of GDP as against 1.7per cent in 1995-96 and
1.4 per cent in 1997- 98, mainly reflecting sharp declines in POL and noncustoms imports.
Reflecting the trends in exports and imports, the deficit on the trade
account of BOP in 1998-99 narrowed to US $ 13.25 billion from US $ 15.51
billion in 1997-98 or from 3.8 per cent of GDP in 1997-98 to 3.1 per cent of
GDP in 1998-99.
1999- 2000:
Indias Balance of payments position in 1999-2000 remained comfortable.
The current account deficit in 1999-2000 was contained to 0.9 per cent of

GDP, despite an unfavourable international trade and financial backdrop

including a near two-third like in Indias oil import bill.
2000- 01:
Indias balance of payments (BOP) position in 2000-01 remained
comfortable and the external sector experienced a distinct improvement.
There were, however, some pressures on the BPO during the first half of
the year on account of significant hardening of international oil prices, the
sharp downturn in international equity prices and successive increases in
interest rates in the United Suites and Europe; but the situation cased with
the mobilization of funds under the India Millennium Deposits, which
helped to revert the declining trend in reserves and enhanced confidence in
the strength of Indias external sector. As a result, the BOP situation
experienced a turn around 0.5 per cent of GDP from 1.1 per cent of GDP in
1999-2000.
2001- 02:
Indias balance Of payments in 2001-02 exhibited mixed developments.
While exports, on BOP basis, remained stagnant at previous years level,
but imports declined by 2.8 per cent, thus resulting in a decline in
merchandise trade deficit, as per cent of GDP, from 3.1 per cent in 2000-01
to 2.6 per cent in 2001-02. Moreover, the current account BPO turned into
a surplus in 2001-02, after a gap of 24 years (last recorded in 1977-78).
2007-08 and 2008-09:
Both the year 2007-08 and 2008-09 were marked by adverse
developments in the external sector of the economy, reflecting impact of
global financial crisis on the emerging economies including India. Indias
BOP exhibited considerable resilience during fiscal 2008-09 despite one of
the severest external shock.
The current account balance [(-) 2.4 per cent of GDP in 2008-09 vis-a-vis
() 1.3 per cent in 2007-08] remained well within sustainable limits and
there was limited use of foreign exchange reserves despite massive decline
in net capital flows to US $ 7.2 billion in 2008-09 as against US $ 106.6
billion in 2007-08. As a result, the total net capital account of BOP as per
cent of GDP stood at only 0.6 per cent in 2008-09 as compared to that of 8.8
per cent in 2007-08.

Convertibility of Rupee:

For the first time, the Union Budget for 1992-93 has made the Indian rupee
partially convertible. This was an inevitable move for the expeditious
integration of Indian economy with that of the world In order to face the
serious current account deficit in the balance of payments, the Government
of India introduced the partial convertibility of rupee from March 1. 1992.
Under this system, which remained in operation for a period of one year,
60 per cent of the exchange earnings were convertible in rupees at market
determined exchange rate and the remaining 40 per cent earnings were
convertible in rupees at the officially determined exchange rate.
The entire foreign exchange requirement for meeting import obligations
was required to be purchased at market determined exchange rate,
excepting a few specified imports and imports on the government account.
The term convertibility of a currency indicates that it can be freely
converted into any other currency. Convertibility can also be identified as
the removal of quantitative restrictions on trade and payments on current
account. Convertibility establishes a system where the market place
determine the rate of exchange through the free interplay of demand and
supply forces.
In India, hawala trade normally handle about 4 billion dollars a year. Until
recently, this was traceable to the increasing differential between official
and hawala exchange rates. This convertibility of rupee has bridged this
gap and in check the hawala trade effectively.

Current Account Convertibility:
Current account convertibility is the next phase for attaining full
convertibility of rupee. Current account convertibility relates to the
removal of restrictions on payments relating to the international exchange
of goals, services and factor incomes, while capital account convertibility
refers to a similar liberalization of a countrys capital transactions such as
loans and investment, both short term and long term.
The International Monetary Fund (IMF) which works towards the
establishment of multilateral system of payments, requires member

countries to move towards restoration of current account convertibility,

but permits them to restrict convertibility for capital transactions.
Current account convertibility has been defined as the freedom to buy
or sell foreign exchange for the following international transactions:
(a) All payments due in connection with foreign trade, other current
business, including services and normal short term banking and credit
facilities;
(b) Payments due as interest on loans and as net income from other
investments;
(c) Payments of moderate amount of amortization of loans or for
depreciation of direct investment; and
(d) Moderate remittances for family living expenses.

Capital Account Convertibility:
The next and final step in this line is the convertibility of rupee on capital
account. But we must draw a sharp distinction between currency
convertibility in the current and capital accounts. Capital account
convertibility refers to a liberalization of a countrys capital transactions
such as loans and investment, both short term and long term as well as
speculative capital flows.
When it comes to capital account convertibility, one has to be more prudent
and be very much sure about its capacity to launch such a system. If the
country can build a large stock of international reserves, then only this
system could provide a bonus. Confidence in the financial system and a
steady macro-economic environment are very much essential to the
introduction of capital account convertibility of rupee in near future.
Capital account convertibility in India can be introduced in stages by
gradually widening access to resident Indians to external financial markets.
In the light of historical experience, the general view is that opening up of
the capital account should occur late in the sequencing of stabilization and
structural reforms.
Capital account convertibility is likely to be sustainable only if it is
supported by credible macro- economic policies, listing reduction in fiscal
deficit, moderation in inflation and a flexible financial system which can

adapt to changing situations as some of the essential pre-conditions for

capital account convertibility. Thus capital account convertibility implies
the right to transact in financial assets with foreign countries without
restrictions. Although the rupee is not fully convertible on the capital
account, convertibility exists in respect of certain constituent elements.

These are as follows:
(a) Capital account convertibility exists for foreign investors and NonResident Indians (NRIs) for undertaking direct and portfolio investment in
India.
(b) Indian investment abroad up to US $ 4 million is eligible for automatic
approval by the RBI subject to certain conditions.
(c) In September 1995, the RBI appointed a special committee to process
all applications involving Indian direct foreign investment abroad beyond
US $ 4 million or those not qualifying for fast track clearance.
But in the context of the need for attracting higher capital inflows into the
country, it is also important for the Government to introduce convertibility
on capital account, as foreign investors may enter confidently only when
there is an assurance that the exit doors will always remain open.
The Budget 2002-03 has adopted a cautious step towards Capital Account
Convertibility by allowing NRI to repatriate their Indian income.
Considering the present condition along with the comfortable foreign
exchange reserve of the country at present, the government is now
favouring a make towards fuller capital account convertibility in the
context of changes in the last two decades. For the mean time on 18th
March, 2006 former Prime Minister Dr. Manmohan Singh asked the Finance
Ministry and RBI to work out a roadmap for fuller capital account
convertibility based on current realities. Dr. Singh is of the view that such
roadmap for fuller capital account convertibility would attract greater
foreign investments into the country.
Thus it is expected that the Government of India and the RBI are going to
announce a roadmap soon for the attainment of fuller capital account
convertibility of the country. However, while taking decision for full
convertibility of rupee, the Government should take adequate care of its
possible consequences.

In the mean time on 29th March, 2006, 160 renowned Indian economists
asked the government to desist from moving towards full convertibility of
rupee as it was brought with dangerous consequences. They argued, We
urge the UPA government from such an unnecessary and dangerous
measure. This (full float of rupee) would expose Indian economy to
extreme volatility.
The statement made by about 160 leading economists from various
institutions across the country and signed by Prof. Prabhat Patnaik of JNU,
Delhi also expressed apprehension that to expose the country to
unpredictable movements in capital flows would create a potential for
fragility and crisis and particularly when the stock market is witnessing a
speculative boom.

Tara-pore Committees Second Report on Capital Account
Convertability (July 2006):
With the growing strength of balance of payments in the post-1991 period
and with external sector remaining robust and gaining strength every year
and the relative macro economic stability with high growth providing a
conducive environment relaxation of capital controls, RBI, in pursuance of
the announcement the Prime Minister constituted a committee on March
20, 2006 with Mr. S.S. Tarapore as its chairman for setting out a roadways
towards fuller capital account convertibility. The committee submitted its
Report to the RBI on July 31, 2006.
Keeping itself conscious of the risks involved in the movement towards
fuller convertibility of the Rupee as emanating from cross country
experiences in this regard the committee calibrated the liberalization road
map to the specific contexts of preparednessnamely, a strong
macroeconomic framework, sound financial systems and markets and
prudential regulatory and supervisory architectures.
After making review of the existing capital controls, it detailed a broad five
year time frame for movement towards fuller convertibility in three
phases: Phase-I (2006-07); Phase II (2007-08 to, 2008-09) and Phase III
(2009-10 to 2010-11).
The report recommended the meeting of certain indicators/targets as a
concomitant to the movement in: meeting FRBM targets; shifting from the
present measures of fiscal deficit to a measure of the Public Sector

Borrowing Requirement (PSBR); segregating government debt

management and monetary policy operations through the setting up of the
office of Public Debt independent of the RBI; imparting greater autonomy
and transparency in the conduct of monetary policy; and slew of reforms in
banking sector including a single banking legislation and reduction in the
share of Government/RBI in the capital of public sector bank.
Keeping the current account deficit to GDP ratio under 3 per cent; and
evolving appropriate indicators of adequacy of reserves to cover not only
import requirements, but also liquidity risks associated with present types
of capital flows, short-term debt obligations and broader measures
including solvency.
Thus, the committee recommended a three phase strategy for moving
towards capital account convertibility. Although, RBI has not been taken
any final decision on acceptance of the recommendations in totality but it
has initiated measures on an on-going basis beginning with the
announcement in Us Mid-term Review of the Annual Policy Statement for
2007-08.

Balance of Payment Crisis in India
Let us make in-depth study of the factors responsible and solution to
the balance of payment crisis in India.
Factors Responsible for Balance of Payment Crisis:
The following factors are mostly responsible for this growing crisis in
the balance of payments:
1. The first important factor responsible for this growing crisis in BOP was
the policy of import liberalisation introduced by the Congress (I)
Government headed by Late Rajiv Gandhi resulting in a huge inflow of
imports particularly after the announcement of Exim Policy in 1985.
2. The second factor responsible for the crisis was the existing heavy
import base of the country. In-spite of attaining an encouraging 18.7 per
cent annual growth rate of exports during Seventh Plan, which was even
higher than the annual growth rate of imports (16.8 per cent), the BOP
position deteriorate to a serious point as the country started with larger
volume imports.

3. The third factor responsible for this BOP crisis is the higher import
intensity in the industrial development resulting from import intensive
industrialisation process followed in the country for meeting the
requirements of elitist consumption (viz., colour TVs, VCRs, refrigerators,
motor cycles, cars) etc.
4. The steep depreciation of rupee with dollar and other currencies during
1987-91 (from Rs. 12.82 per dollar in 1987 to Rs. 20.64 in April, 1991) had
resulted in a considerable increase- in the value of imports.
5. The worsening of the current account deficit in BOP in 1990-91 and
therefore was partly on account of Gulf war and the higher price of POL
imports and higher volume of POL imports continuously.
6. The aggravation in trade deficit in recent years was also resulted from a
deterioration in the invisibles account because of lower remittances and
higher interest payments.
7. The current account deficit in 1990-91 weakened the ability to finance
deficit massively. Political uncertainty at home, copied with rising inflation
and widening fiscal deficits, led to a loss of international confidence. This
had resulted drying up of commercial borrowing and an outflow of NRI
deposits.
This forced substantial recourse to the IMF with net borrowing of $ 1.2
billion and a large reserve drawdown ($ 1.3 billion). After a further
deterioration in the first quarter of 1991-92, the new government took a
series of measures to restore viability in external payments.
8. Although there was a severe import compression during 1991-92 but the
export performance in 1991-92 was disappointing with a marginal fall in
exports in dollar terms reflecting depressed conditions in world markets
and a virtual collapse in exports to the former Soviet Union. Thus in-spite of
serious attempts, the trade deficit declined marginally by $ 4.7 billion
compared with the previous year. However, the foreign exchange reserves
of the country at the same time increased by S 3.57 billion.
9. The current global economic slowdown is mostly responsible for
growing trade deficit and unfavourable balance of payments situation
arising out of reduction in exports.

Solution to the Growing Problem of Deficits in Balance of Payments

(BOP):
The growing and persistent deficits in the balance of payments cannot be
solved by the use of accumulated foreign exchange reserves or through
borrowing from the IMF or by the inflow of resources through external
loans and grants. The basic factors responsible for this persistent balance
of payments crisis must be dealt with seriously. Otherwise, the country will
reach a situation like Argentina and Mexico and will lose its creditworthiness in the international market.
Thus, under such a situation the ultimate solution lies in containing the
import bill through severe compression on the one hand and to promote
export to the maximum extent on the other. Prof. Sukhamoy Chakraborty in
this connection observed, In my judgment, Indias balance of payments is
likely to come under pressure unless we carry out a policy of import
substitution in certain crucial sectors. These sectors include energy, edible
oil and nitrogenous fertilizers.

1. Import Control:
Under the present circumstances, the country should reduce its
dependence on those commodities in which it has its productive capacities.
Accordingly, the country should try to increase the production of food
grains, edible oils and completely stop its import of these commodities.
The country should increase the production of iron and steel, paper,
fertilizers etc. by a higher degree of capacity utilisation of these existing
industrial units and thus reduce its imports. The country should also put a
check on the ever increasing import of POL through both increased
domestic production and curtailment of its wasteful and unlimited
consumption.
Moreover, there should be a severe curb on the imports of luxuries.
Besides, the country should try to adopt import substitution measures
progressively and also discourage indiscriminate grant of licenses of
foreign collaborations.

2. Export Promotion:
In order to tackle the balance of payments crisis more effectively, the
country should try to promote exports of non-traditional items like
engineering goods, processed foods (fish and meat preparation), fruits and
handicrafts etc. Moreover, the country should try to diversify its export
markets into some non-traditional areas and should derive sufficient
export surplus by containing home consumption of those commodities.
In the mean time, the year 1991-92 closed with important changes in trade
and exchange rate policies announced in the Budget for 1992-93. Due to
considerable import compression on measures the total value of imports
declined from $ 24,072 in 1990-91 to $ 19.411.
Moreover, there was a shift to a new system of exchange rate management
after the introduction of the system of full convertibility of rupee and
market exchange rate in 1993-94 and 1994-95 Budget. Again in order to
eliminate the cumbersome system of import licensing characterized by
bureaucratic delay and arbitrariness, the system of liberalization of import
licensing and tariff reductions were introduced.
This would promote greater competitiveness of Indian industry and helped
the country to promote exports in the long run. Thus care must be taken so
that the fruits of import liberalization remain restricted to export oriented
and import substitutions industries. Considering the growing balance of
payment crisis in the country, timely action must be taken so as to
overcome the impending crisis.

These timely actions should be taken in the following manner:
(i) Careful screening of imports as essential and non-essential and then
strictly curtail the nonessential imports;
(ii) Intensifying drive towards export promotion seriously and also to
diversify the exports of the country;
(iii) Encouraging implementation of measures towards import substitution
and to attain self- reliance, and
(iv) To discourage indiscriminate grant of licences to foreign collaborations
excluding the areas of adopting sophisticated technology.

However, the balance of payments position in India is not at all satisfactory

and such unsatisfactory performance is mostly resulted from huge trade
deficit arising out of persistently rising imports and slowly rising exports.
Thus the ultimate solution to such critical problem rests on promotion of
exports and restriction of imports to the unavoidable minimum
simultaneously.

Categories of Transactions of Balance of Payments
Some of the categories of transactions of balance of payments are :
1. Autonomous transactions and
2. Accommodating transactions
The transactions recorded in the balance of payments accounts can be
categorized as Autonomous Transactions and Accommodating
Transactions.

Let us discuss each of them in detail:
Autonomous Items:
Autonomous items refer to those international economic transactions,
which take place due to some economic motive such as profit
maximization. These items are also known as above the line items.
Autonomous transactions are independent of the state of BOP account.
For example, if a foreign company is making investments in India with the
aim of earning profit, then such a transaction is independent of the
countrys BOP situation. Autonomous transactions take place on both
current and capital accounts.
1. On the current account, merchandise exports and imports of goods are
autonomous transactions.
2. On the capital account, receipts and repayments of long-term loans by
private individuals are autonomous transactions.

Surplus or Deficit in BOP:

BOP account is in surplus when autonomous receipts are more than the
autonomous payments. BOP is in deficit when autonomous receipts are less
than autonomous payments.
Accommodating Items:
Accommodating items refer to the transactions that are undertaken to
cover deficit or surplus in autonomous transactions, i.e. such transactions
are determined by net consequences of autonomous transactions. These
items are also known as below the line items.
Accommodating transactions are compensating capital transactions which
are meant to correct the disequilibrium in autonomous items of balance of
payments. For example, if there is a current account deficit in the BOP, then
this deficit is settled by capital inflow from abroad.

The sources used to meet a deficit in BOP, are:
(i) Foreign exchange reserves;
(ii) Borrowings from IMF or foreign monetary authorities.

Does Balance of Payments Always Balance?
It is worthwhile to note that this balance is in the accounting sense only.
Surplus on current account can lead to the grant of loans to the other
countries by the Government or it can lead to the increase in the reserves
of foreign exchange which show up themselves in the capital account.
On the other hand, a deficit on current account can be met by borrowing
from abroad, that is, by obtaining loans through foreign aid or by drawing
from IMF or by running down countrys foreign exchange reserves. Thus
the surplus or deficit in the current account of a countrys balance of
payments gives rise to further financial transactions which show up
themselves in capital account.
In other words, if the balance of payments is used in the wider sense so as
to include external assistance, drawing from IMF drawing upon the
countrys reserves also as distinguished from its narrower sense, the

balance of payments of a country must always balance all the receipts

taken together must be equal to all the payments taken together.
The above fact has an important lesson that must be borne in mind. If a
country has no foreign exchange reserves or it has no assets to sell to pay
for the imports and if nobody is willing to lend to it, it will have to cut down
its imports that will reduce productive capacity in the economy and
adversely affect economic growth of the country.
Such a crisis situation arose in India in 1991 when our foreign exchange
reserves had fallen to a very low level and no one was willing to lend to us
or give us aid. In fact, due to loss of confidence of foreign investors, there
was capital flight from India.
Therefore, in 1991 India had to mortgage its gold to Bank of England and
Central Bank of Japan to get the necessary foreign exchange to pay for the
needed imports. Besides, we had to accept the preconditions of IMF for
providing assistance to us to tide over the crisis. It is interesting to note this
was done under the guidance of Dr. Manmohan Singh, who was then the
Finance Minister.

Indian Trade Policy - Imports and Exports

SIMPLIFICATION & MERGER OF REWARD SCHEMES
Export from India Schemes:

1. Merchandise Exports from India Scheme (MEIS)
(a) Earlier there were 5 different schemes (Focus Product Scheme, Market
Linked Focus Product Scheme, Focus Market Scheme, Agri. Infrastructure
Incentive Scrip, VKGUY) for rewarding merchandise exports with different
kinds of duty scrips with varying conditions (sector specific or actual user
only) attached to their use. Now all these schemes have been merged into a
single scheme, namely Merchandise Export from India Scheme (MEIS) and
there would be no conditionality attached to the scrips issued under the
scheme.
(b) Rewards for export of notified goods to notified markets under
Merchandise Exports 2 from India Scheme (MEIS) shall be payable as
percentage of realized FOB value (in free foreign exchange). The debits
towards basic customs duty in the transferable reward duty credit scrips
would also be allowed adjustment as duty drawback. At present, only the
additional duty of customs / excise duty / service tax is allowed adjustment
as CENVAT credit or drawback, as per Department of Revenue rules.

2. Service Exports from India Scheme (SEIS)
(a) Served From India Scheme (SFIS) has been replaced with Service
Exports from India Scheme (SEIS). SEIS shall apply to Service Providers
located in India instead of Indian Service Providers. Thus SEIS provides
for rewards to all Service providers of notified services, who are providing
services from India, regardless of the constitution or profile of the service
provider.
(b) The rate of reward under SEIS would be based on net foreign exchange
earned. The reward issued as duty credit scrip, would no longer be with
actual user condition and will no longer be restricted to usage for specified
types of goods but be freely transferable and usable for all types of goods
and service tax 3 debits on procurement of services / goods. Debits would
be eligible for CENVAT credit or drawback.

3. Duty credit scrips to be freely transferable and usable for payment

of custom duty, excise duty and service tax.
(a) All scrips issued under MEIS and SEIS and the goods imported against
these scrips would be fully transferable.
(b) Scrips issued under Exports from India Schemes can be used for the
following:-
(i) Payment of customs duty for import of inputs / goods including capital
goods
(ii) Payment of excise duty on domestic procurement of inputs or goods,
including capital goods as per DoR notification.
(iii) Payment of service tax on procurement of services as per DoR
notification.

4. Status Holders
(a) Business leaders who have excelled in international trade and have
successfully contributed to countrys foreign trade are proposed to be
recognized as Status Holders and given special treatment and privileges to
facilitate their trade transactions, in order to reduce their transaction costs
and time.
(b) The nomenclature of Export House, Star Export House, Trading House,
Star Trading House, Premier Trading House certificate has been changed to
One, Two, Three, Four, Five Star Export House

BOOST TO "MAKE IN INDIA"
5. Reduced Export Obligation (EO) for domestic procurement under
EPCG scheme: Specific Export Obligation under EPCG scheme, in case
capital goods are procured from indigenous manufacturers, which is
currently 90% of the normal export obligation (6 times at the duty saved
amount) has been reduced to 75%, in order to promote domestic capital
goods manufacturing industry.
6. Higher level of rewards under MEIS for export items with high
domestic content and value addition. It is proposed to give higher level of

rewards to products with high domestic content and value addition, as

compared to products with high import content and less value addition.

Forthcoming e-Governance Initiatives
DGFT is currently working on the following EDI initiatives:
(i) Message exchange for transmission of export reward scrips from DGFT
to Customs.
(ii) Message exchange for transmission of Bills of Entry (import details)
from Customs to DGFT.
(iii) Online issuance of Export Obligation Discharge Certificate (EODC).
(iv) Message exchange with Ministry of Corporate Affairs for CIN & DIN.
(v) Message exchange with CBDT for PAN.
(vi) Facility to pay application fee using debit card / credit card.
(vii) Open API for submission of IEC application.
(viii) Mobile applications for FTP

New initiatives for EOUs, EHTPs and STPs
(a) EOUs, EHTPs, STPs have been allowed to share infrastructural facilities
among themselves. This will enable units to utilize their infrastructural
facilities in an optimum way and avoid duplication of efforts and cost to
create separate infrastructural facilities in different units.
(b) Inter unit transfer of goods and services have been allowed among
EOUs, EHTPs, STPs, and BTPs. This will facilitate group of those units which
source inputs centrally in order to obtain bulk discount. This will reduce
cost of transportation, other logistic costs and result in maintaining
effective supply chain.
(c) EOUs have been allowed facility to set up Warehouses near the port of
export. This will help in reducing lead time for delivery of goods and will
also address the issue of unpredictability of supply orders.

(d) STP units, EHTP units, software EOUs have been allowed the facility to
use all duty free equipment/goods for training purposes. This will help
these units in developing skills of their employees.
(e) 100% EOU units have been allowed facility of supply of spares/
components up to 2% of the value of the manufactured articles to a buyer
in domestic market for the purpose of after sale services.
(f) At present, in a period of 5 years EOU units have to achieve Positive Net
Foreign Exchange Earning (NEE) cumulatively. Because of adverse market
condition or any ground of genuine hardship, then such period of 5 years
for NFE completion can be extended by one year.
(g) Time period for validity of Letter of Permission (LOP) for EOUs/EHTP/
STPI/BTP Units has been revised for faster implementation and monitoring
of projects. Now, LOP will have an initial validity of 2 years to enable the
unit to construct the plant and install the machinery. Further extension can
be granted by the Development Commissioner up to one year. Extension
beyond 3 years of the validity of LOP, can be granted, in case unit has
completed 2/3rd of activities, including the construction activities.
(h) At present, EOUs/EHTP/STPI units are permitted to transfer capital
goods to other EOUs, EHTPs, STPs, SEZ units. Now a facility has been
provided that if such 14 transferred capital goods are rejected by the
recipient, then the same can be returned to the supplying unit, without
payment of duty.
(i) A simplified procedure will be provided to fast track the de-bonding /
exit of the STP/ EHTP units. This will save time for these units and help in
reduction of transaction cost.
(j) EOUs having physical export turnover of Rs.10 crore and above, have
been allowed the facility of fast track clearances of import and domestic
procurement. They will be allowed fast tract clearances of goods, for export
production, on the basis of preauthenticated procurement certificate,
issued by customs / central excise authorities. They will not have to seek
procurement permission for every import consignment.

Facilitating & Encouraging Export of dual use items (SCOMET)

(a) Validity of SCOMET export authorisation has been extended from the
present 12 months to 24 months. It will help industry to plan their activity
in an orderly manner and obviate the need to seek revalidation or
relaxation from DGFT
(b) Authorisation for repeat orders will be considered on automatic basis
subject to certain conditions.
(c) Verification of End User Certificate (EUC) is being simplified if SCOMET
item is being exported under Defence Export Offset Policy.
(d) Outreach programmes will be conducted at different locations to raise
awareness among various stakeholders.

Facilitating & Encouraging Export of Defence Exports
(a) Normal export obligation period under advance authorization is 18
months. Export obligation period for export items falling in the category of
defence, military store, aerospace and nuclear energy shall be 24 months
from the date of issue of authorization or co-terminus with contracted
duration of the export order, whichever is later. This provision will help
export of defence items and other high technology items.
(b) A list of military stores requiring NOC of Department of Defence
Production has been notified by DGFT recently. A committee has been
formed to create ITC (HS) codes 16 for defence and security items for
which industrial licenses are issued by DIPP.

e-Commerce Exports
(a) Goods falling in the category of handloom products, books / periodicals,
leather footwear, toys and customized fashion garments, having FOB value
up to Rs.25000 per consignment (finalized using eCommerce platform)
shall be eligible for benefits under FTP. Such goods can be exported in
manual mode through Foreign Post Offices at New Delhi, Mumbai and
Chennai.
(b) Export of such goods under Courier Regulations shall be allowed
manually on pilot basis through Airports at Delhi, Mumbai and Chennai as
per appropriate amendments in regulations to be made by Department of

Revenue. Department of Revenue shall fast track the implementation of EDI

mode at courier terminals.

Social Structure of India
India is a country with diverse cultures. Customs and traditions vary from
region to region. Yet, of course, some commonality does exist in the social
structure, which is an unifying force. Let us try to understand the various
social formations that provide the unifying force as well as distinct
characteristics to the Indian society.

Social Structure of India

Caste system The social structure is based upon the caste system.
The society is divided into four major castes- the Brahmans,
Kashtriyas, Vaisyas and the Sudras. The Brahmans are the priests and
are considered to be the uppermost caste. The Kshatriyas are the
warriors, Vaisyas are the business class, the merchants and the
Sudras are the working class. Inter-caste marriages are not permitted
as a rule, although now it has become quite common in the urban
areas. Untouchability continues to be practiced. The Dalits are
treated as untouchables as they do the menial jobs of removing the
night soil or cleaning the streets. The Constitution does not permit
the practice of untouchability and those practising it can be
persecuted. Now of course, with growing urbanization, the caste
system is becoming obsolete.

Family The family as a unit is given much importance. Divorces as a

rule are not very common or appreciated. Couples prefer adjusting
rather than breaking up a marriage. Since children are given much
importance, divorces are generally shunned. The family system
nurtures the well-being of the children. Nowadays, in the urban setup due to modernization, preference is being given to divorce as a
solution to settle an unhappy marriage. But on the whole, people like
to retain the family unit.

Women Historically, women have played a significant role in the

social and political structure of India. In the ancient times, women
enjoyed much freedom, but with advent of the Muslims the purdah

system came into vogue in the northern part of India. In many

regions, women remain very submissive, although with the improved
education levels, women have become more assertive.

Men In the Indian society, a man is considered to be the breadearner and shoulders the responsibility of the family. He is very
dominating by nature and prefers to rule over his women.

Patriarchal setup India is mostly a patriarchal set-up, with the

father having control over the family unit. The man controls the reins
of the family unit. He is the head of the family. The eldest male
member has much say in the matters of the family.

Matriarchal setup In Kerala, in the south of India, the woman of

the house is the dominant force. She decides the issues of the family.

Marriage This is an important social obligation which most Indians

adhere to. It is given much importance by society. Marriages are
generally arranged, but now many are choosing their own partners in
urban areas. Children born outside marriage are looked down upon.
Marriages are conducted with elaborate rituals and much money is
spent on this occasion.

Birth This is an occasion for rejoicing. Ceremonies and rituals are

held to celebrate the occasion. The birth of male child is looked up to.
In some areas, the birth of a girl is looked down upon.

Death This is also an important occasion in the family system.

Death is considered to be inevitable. Ceremonies are held on this
occasion and even after the death of a person, yearly rituals are held
in remembrance of them.

Multi Culturalism in India
Multicultural concerns have long informed Indias history and traditions,
constitution and political arrangements. Much of the writings on Indian
history, culture and politics are marked by some kind of multicultural
concern. The central question that remains is how a vast multi-ethnic
country in terms of religion, language, community, caste and tribe has
survived as a state in conditions of underdevelopment, mass poverty,

illiteracy and extreme regional disparities. Placed in relation to the failures

of many less diverse and plural post-colonial and socialist states, Indias
record of relative political unity and stability seems remarkable indeed. It
is argued that at the heart of the resolution of many ethnic conflicts in India
lies a set of multicultural state policies.
The Indian Constitution as the source of these policies can be said to be a
basic multicultural document, in the sense of providing for political and
institutional measures for the recognition and accommodation of the
countrys diversity. In the post-independence period, the major form of
political recognition of territorially based ethnic identity of the people has
remained statehood within the Indian federation, although other forms,
most notably, sub-statehood, in the form of Regional or Tribal District
Councils, have often served similar purposes for small ethnic communities.
Awareness: Indians are subconsciously more aware about other cultures.
Indian with its colourful history knows more about religion such as Islam
or Buddhism.

Empathy: The awareness subtly contributes to an understanding about
others viewpoint. We tend to me in more accustomed to think what others
think and why. This is a big factor for national harmony.

Tolerance: This has also resulted in a greater tolerance for other cultures.
It is not uncommon to see a Jain (pure veg) restaurant side by side with a
Mughai (known for its non veg cuisine) one.

Compassion: Indians have by default an implicit compassion for other
cultures. There is after all a region that Indian NRIs are happily living in all
geographies or the world.

Non-discrimination: Unlike many other nations, India does not prohibit
anyone from occupying any posts. Religion, language, region etc. simply
does not matter. Infact we have many examples.

DEMOGRAPHIC TRENDS IN INDIA

The various aspects of demographic trends in India are:

Size of population.

Rate of growth.

Birth and death rates.

Density of population.

Sex-ratio.

Life-expectancy at birth.

Literacy ratio.

India is the worlds second most populous country and its largest
democracy. Despite two decades of exceptionally rapid economic growth,
material poverty is still widespread in Indiathe World Bank estimates
that well over 50% of the country still lives on less than $2 a day. Even so,
life expectancy at birth is now estimated to exceed 65 years, the United
States level right after World War II, and is on track to continue its rise,
barring only some presently unimaginable catastrophe.
While birth rates have fallen very sharply over the past two generations,
nationwide levels remain well above replacement at about 2.6 births per
woman per lifetime. Since international migration trends do not impact
Indias population profile much, the countrys fertility and mortality
prospects will essentially shape its future demographic contours.
The U.S. Census Bureau and the UN Population Division (UNPD) offer
broadly consistent pictures of Indias population profile for the year 2030.
Both the Census Bureau and the UNPDs medium variant projections
envision India 2030 as a country with roughly 1.5 billion people, implying
an intervening rate of population growth averaging about 1.1% per year.
Twenty years from now, India will still be a rather youthful country, with
8%9% of its population 65 years of age or older and a median age of 31
32 years (compared to roughly 13% and 37 years, respectively, for the
United States today).
About 68% of India 2030s population will comprise men and women of
working age (conventionally defined as the 1564 group), compared with
65% today. This means that the working-age manpower is set to grow
more rapidly than overall population in the decades immediately ahead, by
about 1.3% per annum on average.

By 2030, UNPD anticipates Indias life expectancy to reach 70 years, and by

its projections, the India of 2030 will be about 40% urban, up from an
estimated 30% today.

How does this profile compare with other major states in the AsiaPacific region, especially China, which is still the most populated
country in the world?
China is clearly the obvious comparator to India. No other countries are
even close in scale to these two.
India is on track to become the worlds most populous country in the notso-distant future, however. Both Census and UNPD projections anticipate
that Indias population will exceed Chinas by 2025, and the UNPDs
projections imply that the crossover may occur even sooner than that
possibly within a decade.
By 2030, current projections envision that China will have entered into a
long-term depopulation. That impending depopulation is by now virtually
unavoidable and has already been baked in the cake, so to speak. The
countys fertility trends sank below the replacement level two decades ago
and are currently estimated to be 30% below replacement.
Chinas working-age population is on track to peak around 2015 and will
have been shrinking for a decade and a half by 2030. By contrast, Indias
steadily growing working-age population will be the worlds largest well
before 2030.
China will be aging very rapidly over the decades immediately ahead. By
2030, the populations median age will likely be about 43 years, up eight
years from today, and the 65 years and older share will be approaching
17%, twice as much as today. Accordingly, China will face the burdens that
come with an aging population. By 2030 it will be a decidedly grayer
society than America todayon an income level far below current OECD
norms, even assuming rapid material progress.
Chinas coming population profile will also be characterized by major
changes in family structure. Due to the prevalence of female feticide today,
China now has a biologically abnormal excess of little boys, which
portends a potentially monumental marriage squeeze in the decades
ahead. While China currently has a universal marriage norm, in less than a

generation a fifth or more of men in their late 30s or early 40s may be
essentially unmarriageable. This is a demographic wildcard for Chinas
future and may presage unpredictable social strains or political pressures.
While India also has abnormally high ratios of little boys in some regions,
its gender ratio is far less extreme than Chinas and is unlikely to have
similar ramifications on marriage prospects.
Thus far, Indias prospective population profile may sound more favorable
than Chinas, at least regarding implications for economic development.
However, China will retain a number of demographic advantages bearing
directly on economic potential. Today, China is substantially more
urbanized than India.
The UNPD estimates 48% of the country is urban today, as against 30% for
India, and it projects that this gap will actually widen over the next two
decades. For another, Chinas overall public health conditions are
substantially better. Life expectancy in China is about eight years higher
than it is in India and is projected to remain significantly higher through
2030.
Perhaps most importantly, China has a dramatic edge over India on mass
educational attainment. As of today, almost everyone in Chinas workingage population is at least literate. By contrast, roughly a third of Indias
working-age manpower has never been to school. India is about half a
century behind China in eliminating illiteracy. Even posting steady
educational progress, India will still lag far behind China in attainment
levels twenty years from now.

What do Indias current and projected demographics indicate about
how the country might fare on the international stage going forward,
both economically and militarily?
From a strategic standpoint, three aspects of a countrys demographics are
especially relevant to economic and military potential: (1) the pool of youth
sufficiently educated to engage in modern warfare, (2) the pool of trained,
or highly trained, working-age manpower, and (3) the scientifictechnological capacities of the highly educated cadre within the workforce.
One can take the pool of men aged 1524 with a high school education or
better as the proxy for manpower suitable for mobilization for the wars of
today and tomorrow. Twenty years ago, China could boast nearly two and a

half times as many relatively educated young men as India. Given past birth
trends and current education trends, however, India is on track to overtake
China in this current decade. By 2030, according to estimates by
researchers at the Vienna Institute of Demography (VID), Indias pool of
relatively well-educated young men will exceed 100 million, as opposed to
fewer than 75 million in China.
What about men and women of working age with a high school education
or better? Again, the ongoing shift in balance between India and China is
remarkable. As recently as 1990, India was estimated to have fewer
relatively well-educated men and women of working age than the United
States and barely a third as many as China. Today it is estimated to have
over half as many as China, on course to outstrip China by 2040.
Measuring scientific-technological capabilities is a complex proposition.
One useful aperture on knowledge production is the number of
international patents a country earns in relation to its manpower with
higher education and its income level. In general, every doubling of per
capita income tracks with a quadrupling of patents per person with a
higher education. At this juncture, India is punching way above its weight
in patent generation.
Over the past decade and a half, the U.S. Patent and Trade Office (PTO)
awarded India over three times as many patents as would have been
predicted on the basis of its income level and educational profile. China, on
the other hand, does not seem to be punching above its weight, but rather
performing more or less as a country with its income and education profile
would be predicted to perform. Whether China can emerge as an
indigenous center of knowledge production is a huge question for the
future of Asia, and the world. India, on the other hand, looks to be already
on course to accomplish this.

URBANIZATION IN INDIA
Urban areas have been recognized as engines of inclusive economic
growth. The census of India, 2011 defines urban settlement as :-
All the places which have municipality, corporation, cantonment board or
notified town area committee
All the other places which satisfy following criteria :
a. A minimum population of 5000 persons ;
b. At least 75 % of male main working population engaged in nonagricultural pursuits ; and
c. A density of population of at least 400 persons per square kilometer
The first category of urban units are known as Statutory town. These town
are notified under law by respective State/UT government and have local
bodies like municipal corporation, municipality, etc, irrespective of
demographic characteristics. For example- Vadodara (Municipal
corporation), Shimla (Municipal corporation)

The second category of towns is known as Census Town. These were
identified on the basis of census 2001 data. Cities are urban areas with
more than 100,000 population. Urban areas below 100,000 are called
towns in India


Similarly Census of India defines:-
Urban Agglomeration (UA): An urban agglomeration is a continuous
urban spread constituting a town and its adjoining outgrowths (OGs), or
two or more physically contiguous towns together with or without
outgrowths of such towns. An Urban Agglomeration must consist of at least
a statutory town and its total population (i.e. all the constituents put
together) should not be less than 20,000 as per the 2001 Census. In varying
local conditions, there were similar other combinations which have been
treated as urban agglomerations satisfying the basic condition of
contiguity. Examples: Greater Mumbai UA, Delhi UA, etc.

Out Growths (OG): An Out Growth (OG) is a viable unit such as a village or
a hamlet or an enumeration block made up of such village or hamlet and
clearly identifiable in terms of its boundaries and location. Some of the
examples are railway colony, university campus, port area, military camps,
etc., which have come up near a statutory town outside its statutory limits
but within the revenue limits of a village or villages contiguous to the town.

While determining the outgrowth of a town, it has been ensured that it
possesses the urban features in terms of infrastructure and amenities such
as pucca roads, electricity, taps, drainage system for disposal of waste
water etc. educational institutions, post offices, medical facilities, banks etc.
and physically contiguous with the core town of the UA. Examples: Central
Railway Colony (OG), Triveni Nagar (N.E.C.S.W.) (OG), etc.

Each such town together with its outgrowth(s) is treated as an integrated
urban area and is designated as an urban agglomeration. Number of
towns/UA/OG 2011, according to Census 2011 Census are :-

1 Statutory Towns 4,041

2 Census Towns 3,894

3 Urban Agglomerations 475

4 Out Growths 981

At the central level, nodal agencies which look after program and policies
for urban development are Ministry of housing and urban poverty
alleviation (MoHUPA) and Ministry of Urban development. Urban
development is a state subject. At state level there are respective
ministries, but according to 74th Constitutional Amendment act,1992, it is
mandatory for every state to form ULBs and devolve power, conduct
regular election, etc. Under 12 schedule of Indian constitution , 18 such
functions have been defined which are to be performed by ULBs and for
that states should support the ULBs through finances and decentralization
of power, for more autonomy. But this is not uniform throughout all the

states and still more is need to be done to empower ULBs in India.

Urban areas are managed by urban local bodies(ULBs), who look after the
service delivery and grievance redressal of citizens. There are eight type of
urban local government in India- municipal corporation municipality,
notified area committee, town area committee, cantonment board,
township, port trust and special purpose agencies.

Migration is the key process underlying growth of urbanisation; and the
process of urbanization is closely related with rural to urban migration of
people. In most developing countries of the world where rate of urban
growth is relatively higher the urban-ward migration is usually high. Rural
to urban migration is by far the major component of urbanisation and is the
chief mechanism by which urbanisation trends all the world-over has been
accomplished

After independence, urbanization in India is increasing at very high pace,
but at the same time there are some problems, which are becoming
barriers for balance, equitable and inclusive development.
Challenges in urban development
Institutional challenges
Urban Governance

74th amendment act has been implemented half-heartedly by the states,
which has not fully empowered the Urban local bodies (ULBs). ULBs
comprise of municipal corporations, municipalities and nagar panchayats,
which are to be supported by state governments to manage the urban
development. For this , ULBs need clear delegation of functions, financial
resources and autonomy. At present urban governance needs improvement
for urban development, which can be done by enhancing technology,
administrative and managerial capacity of ULBs.
Planning

Planning is mainly centralized and till now the state planning boards and
commissions have not come out with any specific planning strategies an

depend on Planning commission for it. This is expected to change in

present government, as planning commission has been abolished and now
focus is on empowering the states and strengthening the federal structure.

In fact for big cities the plans have become outdated and do not reflect the
concern of urban local dwellers, this needs to be take care by Metropolitan
planning committee as per provisions of 74th amendment act. Now the
planning needs to be decentralized and participatory to accommodate the
needs of the urban dwellers.

Also there is lack of human resource for undertaking planning on full scale.
State planning departments and national planning institutions lack
qualified planning professional. Need is to expand the scope of planners
from physical to integrated planning- Land use, infrastructure,
environmental sustainability, social inclusion, risk reduction, economic
productivity and financial diversity.

Finances
Major challenge is of revenue generation with the ULBs. This problem can
be analyzed form two perspectives. First, the states have not given enough
autonomy to ULBs to generate revenues and Second in some case the ULBs
have failed to utilize even those tax and fee powers that they have been
vested with.

There are two sources of municipal revenue i.e. municipal own revenue
and assigned revenue. Municipal own revenue are generated by municipal
own revenue through taxes and fee levied by them. Assigned revenues are
those which are assigned to local governments by higher tier of
government.

There is growing trend of declining ratio of own revenue. There is poor
collection property taxes. Use of geographical information system to map
all the properties in a city can have a huge impact on the assessment rate of
properties that are not in tax net.

There is need to broaden the user charge fee for water supply, sewerage
and garbage disposal. Since these are the goods which have a private
characteristics and no public spill over, so charging user fee will be feasible
and will improve the revenue of ULBs , along with periodic revision. Once
the own revenue generating capacity of the cities will improve, they can
easily get loans from the banks. At present due to lack of revenue
generation capabilities, banks dont give loan to ULBs for further
development. For financing urban projects, Municipal bonds are also
famous, which work on the concept of pooled financing.

Regulator
There is exponential increase in the real estate, encroaching the
agricultural lands. Also the rates are very high, which are not affordable
and other irregularities are also in practice. For this, we need regulator,
which can make level playing field and will be instrumental for affordable
housing and checking corrupt practices in Real estate sector.

Infrastructural challenges
Housing
Housing provision for the growing urban population will be the biggest
challenge before the government. The growing cost of houses comparison
to the income of the urban middle class, has made it impossible for
majority of lower income groups and are residing in congested
accommodation and many of those are devoid of proper ventilation,
lighting, water supply, sewage system, etc. For instance in Delhi, the
current estimate is of a shortage of 5,00,000 dwelling units the coming
decades. The United Nations Centre for Human Settlements (UNCHS)
introduced the concept of Housing Poverty which includes Individuals
and households who lack safe, secure and healthy shelter, with basic
infrastructure such as piped water and adequate provision for sanitation,
drainage and the removal of household waste.

Safe Drinking Water
The safe drinking water sources are also found to be contaminated because
of water in the cities are inadequate and in the future, the expected

population cannot be accommodated without a drastic improvement in the

availability of water. The expenses on water treatment and reuse will grow
manifold.

Sanitation
The poor sanitation condition is another gloomy feature in urban areas and
particularly in slums and unauthorized colonies of urban areas. The
drainage system in many unorganized colonies and slums are either not
existing and if existing are in a bad shape and in bits resulting in blockage
of waste water. This unsanitary conditions lead to many sanitation related
diseases such as diahorrea and malaria. Unsafe garbage disposal is one of
the critical problem in urban areas and garbage management always
remained a major challenge.

Health conditions
The important indicators of human development are education and health.
The health condition of urban poor in some areas are even more adverse
compared to rural areas. As many as 20 million children in the developing
countries are dying consequent to drinking water. About 6, 00,000 persons
are losing their lives on account of indoor air pollution .
The National Family Health Survey, 2006-07 has envisaged that a lot of
women and children are suffering from nutritional anaemia and diseases
like tuberculosis and asthma are occurring in good number. Providing
health care services to the growing urban population is major challenge
before the government health care delivery system.
They have to take the help of private players as public health facilities are
poor. In case of migrants, they cannot take the benefit of government
policies, so they have to pay very high charges, which keep them in the
vicious cycle of poverty. Urban education system also is becoming elite in
private institution due to limited seats and high charged fee. The condition
of public educational institution is dismal.

Urban public transport

As high income individual are buying more private vehicle and use less
public transport. Such huge number of vehicles in cities is causing more
traffic jam, which in turn decreases the efficiency of public transport. Also
the penetration of public transport is less, which make people use private
vehicle. Public transport
is less disabled friendly. There is also lack of infrastructure and poor
maintenance of existing public transport infrastructure.

Other challenges
Environmental concern
Vulnerability to risk posed by the increasing man-made and natural
disasters. According to UNDP 70 % of Indian population is at risk to floods
and 60% susceptible to earthquakes. The risk are higher in urban areas
owing to density and overcrowding. Urban areas are becoming heat
islands, ground water is not being recharged and water crisis is persistent.
Here making, water harvesting compulsory will be beneficial
Urban Crime
Prevention of urban crime is another challenge before the government of
States having more number of urban areas and particularly metropolitan
cities. The mega cities are facing increased criminal activities on account of
unchecked migration, illegal settlements and diverse socio-cultural
disparities, organized groups, gangsters, professional criminals for wishing
a lavish life in metropolis. The cities of Delhi, Mumbai and Bengaluru have
accounted for 16.2 percent, 9.5 percent and 8.1 percent respectively of the
total crime reported from 35 mega cities. Prevention of crime in mega cities
is a challenge before the city government in India.
Poverty
Roughly a third of the urban population today lives below the poverty line.
There are glaring disparities between haves and have-nots in urban areas.
The most demanding of the urban challenges, unquestionably is the
challenge posed by poverty; the challenge of reducing exploitation,
relieving misery and creating more human condition for urban poor. There
is rise in urban inequality, as per UN habitat report, 2010, urban inequality

in India rose from 34 to 38 % based on consumption in period of 1995 to

2005.
Provision of Employment
Providing gainful employment to the growing urban population is a major
challenge before the government. It is generally observed that the literate
and semi-literate migrants are absorbed with minimal works, carrying
lower wage and more hour of work. The Un Habitat Report (2003) has
rightly remarked The cities have become a dumping ground for surplus
population working in unskilled, unprotected and low wage informal
service industries and trade.
The urban workers are increasingly being pushed into the informal sector
and without any adequate activities in the cities were carried on in public
places like footpaths, open empty spaces, parks or just in the streets. The
plight of rickshaw pullers and street vendor is widely noted and
commented upon. As the rural agriculture sectors is shrinking day by day
the challenges before the urban sector to
provide viable employment to migrating population will be a daunting task
in the coming year.
Steps Taken by Government to improve urban Development
The Constitution (74th Amendment) Act
came into effect in 1993, emphasizes to strengthen urban planning,
regulation of land use, roads and bridges and providing urban amenities.
National Urban Transport Policy,2006:
Its main purpose is to provide affordable, comfortable, safe and rapid,
reliable and sustainable urban transport system, for the growing number of
city resident to jobs, education and recreation and such other needs within
our cities.
Encouraging integrated land use and transport planning in all cities so that
travel distances are minimized and access to livelihoods, education, and
other social needs, especially for the marginal segments of the urban
population is improved

National Urban Renewal Mission(NURM), 2005

The primary objective of the JnNURM is to create economically productive,
efficient, equitable and responsive cities. The JnNURM consists of two submissions Urban Infrastructure and Governance (UIG) and Basic
Services for Urban Poor (BSUP).

The Mission focuses on: Integrated development of infrastructure services;
securing linkages between asset creation and maintenance for long run
project sustainability; accelerating the flow of investment into urban
infrastructure services; planned development of cities including the periurban areas, out growths, and urban corridors; renewal and redevelopment of inner city areas;

Universalisation of urban services so as to ensure their availability to the
urban poor.


Introduction to Metro trains
In Delhi, Kolkata, Bangalore etc. are part of above mentioned initiatives.
Recently cabinet has also passes proposal for second phase of Bangalore
Metro (Namma Metro). In addition to this government has done many
feasibility studies in Tier-II & III cities. Now one million plus cities can go
for metro project according to new urban policy.
Indias first monorail
It will be thrown open to the public, eight years after it was first proposed,
with the Maharashtra government. With this, India will join countries like
the U.S., Germany, China, Japan, Australia and Malaysia that run monorails.

Smart city concept
In the budget, 2014, it was projected for one hundred Smart cities, as
satellite towns of larger cities and modernizing the existing mid- sized
cities. Though there is no clear definition of smart cities, but it may include
creative, cyber, digital, e-governed, entrepreneurial, intelligent, knowledge,

harnessing the power of Information and communication technology (ICT).

Smartness has to be there with respect to governance and service delivery.
Its feature can be :-
e-governance (through Digital India initiative, National e-governance plan,
National Optical fiber network, e- panchayat project of MRD)

Continuous improvements in design and management

Climate oriented development

Mass transit oriented development

People centric technological applications (m-health, e- learning )

Planning can be bottom up for future urbanization

Smart PDS rationing

Social inclusive and economically diverse.

Swachh Bharat

Clean urban areas will attract tourists and can increase the economic
diversity of the urban dwellers and it will be also source for revenue
generation for ULB.
Suggestions

There should be focussed attention to integrated development of
infrastructure services in cities covered under the Mission and there should
be establishment of linkages between asset-creation and assetmanagement through a slew of reforms for long-term project sustainability
; Green building concepts should be implemented.

Along the lines suggested by the administrative reforms

commission over seven years ago, states should undertake activity
mapping for municipal governments to be clear about which activities are
essentially for them to manage, which require them to act as agents for
higher tiers of government, and which involve sharing responsibility with
other tiers of government. There is no one size fits all here the answer
will vary across municipalities.

The office of an empowered mayor (instead of the municipal
commissioner) must take responsibility for administrative co-ordination
internally between municipal departments, and externally with state
and central government agencies.

Urban planning mechanisms need an overhaul to unify land record
keeping, integrate land use with transport planning, and embed municipal
plans into district and regional plans.

-local bodies should fill vacancies

-time tested master plans should be strengthen instead of preparing

quick fix City development plans

-populist policies and reforms should have their logical conclusion

and should be not done in great haste.

-land development should be the part of planning of urban

development

-project management skills needs to be enhanced = timely

completion of projects

-more PPP projects

Successful/Unique/Innovative examples of urban development

model-

Kudumbshree model
It is social empowerment scheme, launched by the Government of Kerala in
1998 for wiping out absolute poverty from the State through concerted
community action under the leadership of Local Self
Governments, Kudumbashree is today one of the largest womenempowering projects in the country. The programme has 41 lakh members
and covers more than 50% of the households in Kerala. Built around three
critical components, micro credit, entrepreneurship and empowerment,
the Kudumbashree initiative has today succeeded in addressing the basic
needs of the less privileged women, thus providing them a more dignified
life and a better future. Literal meaning of Kudumbashree is prosperity
(shree) of family (Kudumbam).

Chhattisgarh PDS model
State government has started managing information systems.It began
with computerization of Fair Prices Shops (FPS) and data related with
stocks and sales to enable swift allocation of grains. Mobile based
applications including SMS alerts for interested beneficiaries were offered
which improved the access to information about food grains lifted from
godowns and their delivery at ration shops.

In Raipur, individuals are given the choice of the fair price shop of his/her
liking, flexibility of buying in smaller quantities rather than in only on
transaction, etc. Portability of ration card across the shops helped to
improve customer satisfaction.

Solid waste management in OKHLA
Waste management is the concern for any urban city with respect to its
safe disposal, recycling of waste products and also generating energy from
wastes.

Timarpur Okhla Municipal Solid Waste Management project is the first

commercial waste-to-energy facility in India that aims to convert one-third
of the Delhi garbage into the much-needed electricity, enough to serving 6
lakh homes. It has become the first to get carbon credits from United
Nations Framework Convention on Climate Change in the country in 2013.

Delhi metro
It is one of the world-class metro. To ensure reliability and safety in train
operations, it is equipped with the most modern communication and train
control system. For its energy efficient practises, it has earned carbon
credit points from UN.

Community policing for security
Community Policing for Students, adopting Student Police Cadet model of
Kerala which is a school-based youth development initiative that trains
high school students by inculcating in them respect for law, discipline, civic
sense, empathy for vulnerable sections of society and resistance to social
evils.

The Kerala model, which is meant for all government, government-aided
and private unaided schools, imparts training to students through various
camps and classroom activities involving local police personnel who
interact with them at regular intervals with instructions on certain dos and
donts.

The concept of the community policing is aimed at associating citizens with
the local police in solving neighbourhood problems in enforcing laws,
preventing and detecting crimes, restoring order and peace in the area and
reducing crimes against women and weaker sections.

Locating and reporting to the police about strangers and other persons of
doubtful character, assisting local police in patrolling at night in crime
prone areas, ensuring timely flow of crime related intelligence from the
community to the police and ensuring communal harmony through
collective efforts particularly during festivals, religious processions and
public functions are some of the key functions of community policing.

GENDER ISSUES IN INDIA

Gender is a socio-cultural term referring socially defined roles and
behaviors assigned to males and females in a given society; whereas, the
term sex is a biological and physiological phenomenon which defines man
and woman. In its social, historical and cultural aspects, gender is a
function of power relationship between men and women where men are
considered superior to women. Therefore, gender may be understood as a
man-made concept, while sex is natural or biological characteristics of
human beings.
Gender Inequality, in simple words, may be defined as discrimination
against women based on their sex. Women are traditionally considered by
the society as weaker sex. She has been accorded a subordinate position to
men. She is exploited, degraded, violated and discriminated both in our
homes and in outside world. This peculiar type of discrimination against
women is prevalent everywhere in the world and more so in Indian society.
Causes and Types of Gender Inequality in India
The root cause of gender inequality in Indian society lies in its patriarchy
system. According to the famous sociologists Sylvia Walby, patriarchy is a
system of social structure and practices in which men dominate, oppress
and exploit women. Womens exploitation is an age old cultural
phenomenon of Indian society. The system of patriarchy finds its validity
and sanction in our religious beliefs, whether it is Hindu, Muslim or any
other religion.
For instance, as per ancient Hindu law giver Manu: Women are supposed
to be in the custody of their father when they are children, they must be
under the custody of their husband when married and under the custody of
her son in old age or as widows. In no circumstances she should be allowed
to assert herself independently.
The above described position of women as per Manu is still the case in
present modern day social structure. Barring few exceptions here and
there, women have no power to take independent decisions either inside
their homes or in outside world.
In Muslims also the situation is same and there too sanction for
discrimination or subordination is provided by religious texts and Islamic
traditions. Similarly in other religious beliefs also women are being
discriminated against in one way or other.

The unfortunate part of gender inequality in our society is that the women
too, through, continued socio-cultural conditioning, have accepted their
subordinate position to men. And they are also part and parcel of same
patriarchal system.
Extreme poverty and lack of education are also some of the reasons for
womens low status in society. Poverty and lack of education derives
countless women to work in low paying domestic service, organized
prostitution or as migrant laborers. Women are not only getting unequal
pay for equal or more work but also they are being offered only low skill
jobs for which lower wages are paid. This has become a major form of
inequality on the basis of gender.
Educating girl child is still seen as a bad investment because she is bound to
get married and leave her paternal home one day. Thus, without having
good education women are found lacking in present days demanding job
skills; whereas, each years High School and 10+2 standard results show
that girls are always doing better than boys. This shows that parents are
not spending much after 10+2 standard on girl child and thats why they
lack in job market.
Not only in education, in case of family food habits, it is the male child who
gets all the nutritious and choicest foods while the girl child gets whatever
is left behind after the male members have taken their meals or the food
which is low in both quality and nutrition. And this becomes a major health
issue in her later years. One of the main reasons for the high incidences of
difficult births and anemia in women is the poor quality of food which a girl
always gets either in her paternal home or in her in-laws as also is the
excessive workload that they are made to bear from their early childhood.
So the inequality or discrimination against women is at various levels in the
society, either in home or outside home.

Gender Inequality in India: Important Data
Global Indices:
Gender Inequality is also reflected in Indias poor ranking in various global
gender indices.

UNDPs Gender Inequality Index: Indias ranking is 127 out of 142

countries in the List. This ranking is only above Afghanistan as far as
SAARC countries are concerned.
World Economic Forums Global Gender Gap Index- 2014: Indias
ranks at 114 in the list of 142 countries of the world. This Index
examines gender gap in four major areas:

Economic participation and opportunity.

Educational achievements.

Health and life expectancy.

Political empowerment.

Indias position on these indicators was as follows:

Economic participation and opportunity: 134th

Educational achievements: 126th

Health and Life expectancy: 141st

Political empowerment: 15th

These two important Global Indices show the sorry state of affairs in India
as far as gender equality is concerned. Only in case of Political
Empowerment India is doing fine which is a welcome sign. But other
indices are very poor and a lot need to be done to improve the same.

Gender Inequality Statistics
Gender inequality manifests in varied ways. And as far as India is
concerned the major indicators are as follows:

Female Foeticide

Female Infanticide

Child (0 to 6 age group) Sex Ratio: 919

Sex Ratio: 943

Female literacy:46%

Maternal Mortality Rate: 178 deaths per 100000 live births.

These above mentioned indicators are some of the important indices which
show the status of women in our country.
Female foeticide and female infanticide are most inhuman of acts. And it is a
shame that in India these practices are prevailing at large scale.
As far as overall sex-ratio is concerned, its 943 in 2011 report as
compared to 933 of 2001 which is 10 points increase. Though it is a
good sign that overall sex ratio is increasing but its still tilted against
females.
Female literacy is at 65.46% in 2011 as against 82.14% of male literacy.
This gap indicates a wide gender disparity in India that Indians do not give
enough importance to the education of girls.
All these indicators points towards the sorry state of affairs in India
regarding gender justice and womens human right. Though every year
government starts various schemes and programs apart from existing ones
for the benefit and empowerment of women but on the ground there are
not enough visible changes. The change will appear only when the mind set
of Indian society would change; when the society would start treating male
and female on equal footing and when a girl would not be considered as a
burden.

Legal and Constitutional Safeguards against Gender Inequality
Indian Constitution provides for positive efforts to eliminate gender
inequality; the Preamble to the Constitution talks about goals of achieving
social, economic and political justice to everyone and to provide equality of
status and of opportunity to all its citizens. Further, women have equal
right to vote in our political system. Article 15 of the Constitution provides
for prohibition of discrimination on grounds of sex also apart from other
grounds such as religion, race, caste or place of birth. Article 15(3)
authorizes the Sate to make any special provision for women and children.
Moreover, the Directive Principles of State Policy also provides various
provisions which are for the benefit of women and provides safeguards
against discrimination.
Other than these Constitutional safeguards, various protective Legislations
have also been passed by the Parliament to eliminate exploitation of
women and to give them equal status in society. For instance, the Sati

(Prevention) Act, 1987 was enacted to abolish and make punishable the
inhuman custom of Sati; the Dowry Prohibition Act, 1961 to eliminate the
practice of dowry; the Special Marriage Act, 1954 to give rightful status to
married couples who marry inter-caste or inter-religion; Pre-Natal
Diagnostic Techniques (Regulation and Prevention of Misuse) Bill
(introduced in Parliament in 1991, passed in 1994 to stop female
infanticide and many more such Acts. Furthermore, the Parliament time to
time brings out amendments to existing laws in order to give protection to
women according to the changing needs of the society, for instance, Section
304-B was added to the Indian Penal Code, 1860 to make dowry-death or
bride-burning a specific offence punishable with maximum punishment of
life imprisonment.
So there are varied legislative safeguards and protection mechanisms for
women but the ground reality is very different. Despite all these provisions
women are still being treated as second rate citizens in our country; men
are treating them as an object to fulfill their carnal desires; crimes against
women are at alarming stage; the practice of dowry is still widely
prevalent; female infanticide is a norm in our homes.
How we can Eliminate Gender Inequality
The list of legislations as well as types of discriminations or inequalities
may go on but the real change will only come when the mentality of men
will change; when the male species of human beings would start treating
women as equal and not subordinate or weaker to them. In fact not only
men but women also need to change their mindset as through cultural
conditioning they have also become part of the same exploitative system of
patriarchy and are playing a supportive role in furthering mens agenda of
dominating women.
Therefore, what is needed is the movement for Womens empowerment
where women can become economically independent and self-reliant;
where they can fight their own fears and go out in the world fearless;
where they can snatch their rights from the clutches of men and they dont
have to ask for them; where women have good education, good career,
ownership of property and above all where they have freedom of choice
and also the freedom to make their own decisions without the bondages.

HUMAN DEVELOPMENT INDEX

Human development is defined as the process of enlarging people's
freedoms and opportunities and improving their well-being. Human
development is about the real freedom ordinary people have to decide who
to be, what to do, and how to live. The human development concept
was developed by economist Mahbub ul Haq.
Human Development Index - HDI is a tool developed by the United
Nations to measure and rank countries' levels of social and economic
development based on four criteria: Life expectancy at birth, mean years of
schooling, expected years of schooling and gross national income per
capita.
Human Development Index combines three dimensions: A long and
healthy life: Life expectancy at birth. Education index: Mean years of
schooling and Expected years of schooling. A decent standard of living: GNI
per capita (PPP US$)
India Stands 130 out of 188 Countries in HDI, with Norway at the top.