nd Agriculture 75 Jnomic Reforms 4! nfall and floods, droughts, famines, etc. For instance, which was 79.7 million tons at the end of the Jan slid to 72.3 million tons at the end — “ed five year plan. Devastating drought that oceurred in 19 65- a deathblow to agricultural production. The same situation fi i in many years which witnessed either loss of rains or pr andi Therefore, inspite of formidable rise in public Sia jn the agricultural sector, better progress is beyond = mea unless nature plays a complementary role. ins. heavy Ta pains output cond five-yeat P inv! attai F, Agrarian Crisis, Doubling Farmers’ Incomes, Mahatma Gandhi National Rural Employment Guarantee Scheme — MGNREGS 1. Agrarian Crisis Inspite of its predominance in the Indian economy, agricultural sector is caught in a severe and intolerable crisis. Although the sector has considerable importance as a means of livelihood and in providing employment opportunities, the condition of people dependent upon agriculture is chaotic and perplexed. A large number of factors may be adduced to elucidate the crisis situation in which Indian agriculture is placed now. Certain prominent factors of them are discussed here. 1. No increase in income in the same proportion as rise in production : Inspite of overall increase in agricultural production, incomes of farmers have failed to rise in the same proportion, For instance, although food grains output has gone up six fold ina period of seventy years between 1950-51 and 2020-21, incomes of farmers have failed to register rise in the same proportion. eee small and marginal farmers : There is no rec eeonan fact that measures undertaken under the aegis of ion in India since 1966 have caused great uptick inContemporary Indian Econg and mary I : Ai 10 adopt measures of green revolution, Ho adopt measur dificu 1. Deficiency of finances : Indian agriculture is still ha jancial resource: ve!l and maninal farmers have been incapable of sect smount of loans on time, 4. Rural indebtedness : Rural indebtedness has been gror wh Cosy propamtions, §. Ruination of fertility: of applica offernlizers on a very large scale with the intenti@ h yield. Moreover, indiscriminate applicatior 10 cides, te, has been Playing havoc on the heal HG} ‘atte. 6. Deficiency of ground w Sources ate petting. Wo thirds of ater sources : Ground wal : a lepleted, rapidly. Ground Water happens to D Seutce of imation for Agneullure estimates reveal that about 74 wheat ctop an ; Production to deficiency Of ground N that Indian gliculture is readed factors Haunt there ws no po uy ss tolerating suicides ; Government itself has ider fannens take theny, lowever, 8, Farme tomers! SUteide Tides eon, { Me a4 nti cid ed That 19 ie, Orie ‘rmdebledneys ay cmd thet ha lick of _ place owingponomic Reforms and Agriculture 7 Cl pemuncralive prices for products), cte, and the remaining BI percent r suicides are the result of personal reasons. The systern in gencral aa srossly failed to bring down the extent of indebtedness, to movie scientific prices to products, to supply finances to agriculture on time and to identify definite reasons for farmers’ suicides and to take corrective MCUsUrcs. 9, Keminisation of agriculture : Role of women in agricultural activities has been going up substantially. In other words, feminisation of agriculture has been taking place on a rapid scale. According to a study conducted by National Bank for Agriculure and Rural Development (NABARD) the extent of land holdings cultivated by women has risen from [1.7 percent in 2005-06 to 13.9 percent in 2016-17. Feminisation of agriculture is a progressive trend and welcome phenomenon from the points of view of participation of women in economic activitics, empowerment of women and income caming. However, its another dimension needs to be understood. Male farmers who have been in operation of unprofitable agriculture for tong have been migrating to urban centres in search of employment by entrusting to women the burden of maintenance of family and responsibility of carrying ‘on agricultural activities. 10. Fall in profitability : Agricultural operations have proved to be less profitable as cost of production has been going up considerably, 11. Decline in the size of average holding : Dominance of small holdings and low productivity have compounded the distress iN agricultural sector. Average size of holdings has declined from 1.15 hectares to 1.08 hectares between 2010-11 and 2015-16,trial Policy 87 Thenew industrial policy nourishes the aims of employment tion, reduction ofsocial and economic inequalities, poverty hievement of self-reliance. Prominent aspects this industrial policy contain are drastically ringing down te murber industries reiring ompulsory HONS wth of foreign investment in India, automatic approval for agreements involving foreign technology, reforms in the public sector and amendment to Monopolies and Restrictive Trade Practices Act. The government has retained its control on many major sectors evenas it provides opportunity to the private enterprise. In other words, this policy is very much in accordance with the industrial policy resolution of 1956. Freedom is accorded to development of large scale industries. Similarly, reservation of goods forproduction inthe small scale sector will continue, and remains in the same way as it was earlier. Labour class has been considered to be equal partner in industrial progress. Thenew industrial policy lays stress on protection ofthe interests of labour, their welfare and upgradation of their skill inthechanging technological environment. Onthe whole, change with continuity has been thecentral theme of the industrial policy of 1991 _The following are the important aspects of this policy. 1. Comprehensive measures to free the Indian industrial sector from several administrative and statutory controls. 2. Noneed for obtaining licences for other industries except eighteen industries including coal, sugar, motor cars, drugs anda few petroleum, cigarette, dangerous chemicals, luxury goods. 3. Continuation of rescrvatior the small scale sector with t source of employment irr agricu industrial sector. Indus crea eradication and ac! n of products for production in he purpose of developing the Itural and agro-based y=Contemporary Indian, 4. Viwlplacein SE niieaie eres as defence equipments, atomic cnergy, rulwaysand mining. 5. Scope for entry of public sector into the sectors not; forit ; 6. Inspiteof reservation for establishment of industries public sector, no restriction for establishment of industries in the private sector. i 7. Apertofthe government's shareholding in the Public: tobe provided to mutual funds, financial institutions, and the labour. 8 Chronically sick industrial units in the public sect C entrusted to Financial and Industrial Reconstru Corporation to be ado Tehabilitation. a Providing: Scope for fore’; 1051 percentin the capi 10. According automatic pted for rejuvenation ign companies to invest capit tal of Indian industries, Permission for import ofcapital Vi. Dispensing with the Necessity of permissi ofall existing industrial. ‘units. 12. Establishmentof, Corporation vested, direct foreign “nsullations with forcigg indy, Matic Permission for forei inhigh Priority industries, Of restrictions forestablishme involving foreign Collaboration and 15. Bringingin amendmentio Monopoliesan jy Practices industries. With special powers Ivestmentin sclecte agreements is 14. Relaxation Act to overcome asset limitatig,ipaustriat Polley 89 16, Vest ing with more powers the Monopolies and Restrictive Trade Practices C mmission which has been newly constituted to conduct enquiry unilaterally as soon as customers complain against monopoly, ' restrictive and unfair trade practices. 17. Adoption of new policy to promote labour participation in management. Implementation of: social security measures for protection of interests of labour in public sector undertakings. Evaluation Ithas been argued that the industrial policy resolution of 1991 has both merits and demerits. 18. Merits This policy is of immense assistance ina number of ways for industrialization. 1. Faster industrial growth : As this industrial, policy laysmuch emphasis on liberalization, industrial sector would be freed from regulation and controls. This factor paves way for rapid industialization. 2. Rise in industrial production : Thenew industrial policy will be of great assistance for rise in industrial output. In the opinion of economist Sandesar, this policy leads to increase in the efficiency level of industrial production by bringing down project cost and time; and by attracting foreign capital, technology and managerial skill. 3, Increase in efficiency of public sector : The task of restructuring the public sector has been emphasized in this policy. Since only a few industries are in the domain of the public sector, it can perform with added efficiency as aresult of restructuring and reorganisation. .1.Forcign influences : This had led Indian econo gn influences. Economist H.K. Paranj; multinational corporat industrial Policy, ¢ Indian economy. 2. Dominance of foreign capital : This Policy has p irect investment upto 51 percArguments abound which suggest that India has not risen 1g 4 better position in case of doing business. Undue delay is the hallmark ina large number of sectors and work procedures and there prevails utterly disgustful situation. a4 Performance of Micro, Smail and Medium Enterprises Small-scale industries occupy a special place in the Indian economy. Units having capital investment not exceeding Rs. 60 lakhs in plantand machinery and ancillary units having capital investment not exceeding Rs, 75 lakhs have been considered to be small industries. These industries are no less important as they havea significant contribution to economic development through industrialization. Small enterprises are more useful in certain respects as compared with big industries. Importance Factors in favour of small scale industries are as follows. 1, More employment opportunities : Since small-scale industries are basically labour-intensive industries and they are Capable of providing employment opportunities to a large number of people. They play a great role in solving unemployment problem. This is amajor factor in a populous country like India. The number of people employed in these industries in 2020-21 was about 24 million, Small-scale enterprises have more employment potentiality than large-scale industries. 2. Lesser capital : Small-scale industries require lesser amount of capital for their establishment and operations, In underdeveloped as well as developing countries suffering from deficiency of capital, development of these industries is the most appropriate method to accomplish indusirial development and to reap the advantages of industrialisation.Business it 3. Utilization of latent resources : Small j bestsuited to effectively utilize local weraacles cae : talent and stored wealth. Most of the times, entrepreneurial Sital the people and raw materials available in rural Parts go waste without use in any manner. Establishment of small enterprises provides the best opportunity to utilize these resources productively. 4. Industrial decentralisation : Large-scale industries are usually localized in urban areas leading to glaring imbalances between industrial centres and rural areas, and inequalities in income and ownership of wealth. Development of small-scale industries undoubtedly provides the best remedy to this problem. Since these industries can be established in almost all parts of the economy, they bring about industrial decentralization and balanced growth of different regions. Establishment and growth of small enterprises in every nook and comer of the country leads to grand success of the measure of industrialization. 5, Equality : The common proposition advanced is income generated in small enterprises is distributed among a large number of people. In the case of big industries, income is concentrated only with a few people resulting in inequality and concentration of economic power. Small enterprises assist immensely in providing income to more number of people as also in bringing about equality inincomes. 6. Better industrial relations : Small industrial units serve as an efiective platform to develop harmony and direct relationship between workers and employers since lesser number of people are employed in these industries. Industrial disputes are remote Possibilities in small scale industries and this will bea fascinating factor for unhindered process of production. 7. More Production : Small enterprises provide scope a Slose supervision and this results in more production. Absence e!Indian Ei ne Contemporary Indian Economy farce number of industrial disputes too leads to higher Output, Exten of output isnormally more in small industries than in large seajg industries. . 8. Supplementary to the growth of big industries : Small industrial units function as supplementary to big enterprises. They produce machineries, spare parts, tools, ete, and supply them to large industries. Production is facilitated in big industries because of this and they will be in an advantageous position to develop and expand their business. 9, Foreign exchange earnings : Contribution of smali industries to foreign exchange eamings of the country is no less important. Their prominent products such as readymade garments, leather goods, artifacts and two wheelers have very high demand in foreign countnes. In recent years, value of export of products of these industries stands at around Rs. 6,00,000 crore per year. Small industries account for about 35 percent of total export earnings of industrial products. 10. Removal of regional imbalances : Small industries may be set up in different parts throughout the country. Thus, they avoid Concentration of industries only at a few places and will have substantial contribution to overcome regional imbalances. 11. Short-gestation period : Small enterprises are known for providing retums in a very short period. In other words, the period between initial investment of capital in these industries and securing Tetums from them happens to be very short. Since output for the capital invested is secured without much gap, there will be no scope {or inflationary pressures. But this gap in big industries is unusually tong leading to shortage of goods in the intervening period and hence alarming nse in prices. Small units are helpful in overcoming this Problem and in quickening the pace of economic growth by providing Output in a relatively short time.Comlemporaty Tndian bean, Ey roo crane es eqquypartertts data avalible for 2020, of the total ities Acconting to the SUS pereent are neumitieting, @ stall and median emlerprises antare sevice emterpuises, Abou ss 3 Ja pene and median enterprises ane loca enterprises and 68. total ign, small prevent th animal areas. Total number ot these enterpt ises in India at present is about have been nepisterne anoyal growth rate of abou Jolene. The ir contribution to total output ot inhistrial seetor is 1Spervent. The! perent, “Ae. Role of Multinational Corporations in Industrial Development around 37. Growth and operations of multinational corporations has been amajor trend inthe international economie sphere of the post world war, Multinational corporations are very large industrial ic, adininistrative management centre in ess operations i Many other acterized by second organisttions having base, acertain country and having bu: countries of the world. These corporations are ¢ excercising contl over production facilities In other countries Uirongh direct foreign investment. These corporations are called by the nan of “international corporations" or “global corporations” as the operations of these institutions are spread over more than one county: A large number of aspects such as international trade theory. commercial policy, foreign exchange, balance of payments developmental intemational economics and soonhave wong!) influenced by the operations of nul tinational corporations. This facet has made these corporations acquire a major place jncomtempory economic world. The county in which the multinational corporation is establishes. i.e, in whi i F A aed fan i.e, in which it has its base, is considered to be home countty a Uhanniminsin which it hae enroad its aneration is called host coutpistes ea These corporations which extend their operations in host cunderake production in those counties by makiny se of TTALAles qesamite’ domeste country and eny 1s, They estiblish enterprises by mesting capital et the the Lalvani ton cot the host country powluction They can lupe amonit of protits by exporting for ! heir products to other countries envittanccot these prt fothen home country, Centaur times prolits (Lin tiany cases they make areutilised forexpansion ot business in host counties Speciality is that multinational corporations have spread thet network in the businesses ny jnly of industrial goods, chemical materials and soll-beverages. Union Carbide, Coca Cola, Cargal Company, Kentucky Fried Chicken (REC) Hewlett Pleeard, Tetranicks Inc, Avid. Philips India Lad, are some of the major examples for multinational corporations. More than 700 multinational corporations have been operationalizing in the world at present, Nearly lial of these corporations belong fo United States of America. Pstintates done in 2019-19 have revealed that total value of assets ofall multinational corporations is abaut 11,000 crore rupees. Only a few ecorporitions are very big organisations which account fora very large part of foreign direct investment. The remaining are small corporations, Multinational corporations having base in America hawetie largest amount of foreign direct investment. England, Germany, Japan, Swiverland, France and Canada liave the next places respectively. Significance of multinational corporations in the world economy may be understood when we know that these corporations account for about 30 percent of total global output. Total sales of foreign member organisations of the corporations are equi! to otal national Sutput of all developing countries. A study conducted by Norman Macray in the carly part of the decade of 1970 has brought to light ‘hat ofthe 100 very large economic entitics inthe world, only S0arescion im its interim report for 2020-21 had of 41 percent of resources to States from Pen i pool. The transfer is increased to 42 percent in F 35 di ‘wih the change that had occurred as regards the status on state of. Jammu and Kashmir into union territorics of fo ond Jammu and Kashmir. This is the same as the ppt 2 rion made by the fourteenth finance commission. eco Ho zontal pevolution -caahyution of resources among States themselves constitutes - ontal devolution. The following formula is recommended for prof resources among States : i) demographic performance - 1 ii) income distance - 45 percent, iii) area - 15 percent, . ation - 15 percent, v) forest and ecology - 10 percent, and juxefforts- 2.5 percent. ) Population: Population ofa State represents the needs of expenditure the State has to undertake to provide services to thecitizens. Itis a simple and transparent index having more effectiveness in attainment of equality. iy Area: More expenditure is necessitated to provide services topeople ifthe area js more extensive. ii) Forest and Ecology : Share inthis criterion is determined by taking into account the share of forest density of each State in the overall forest density ofall States. iv) Income distance: Income distance denotes distance of gross state domestic product ofa particular State from the State having highest gross state: domestic product. ¥) Demographic performance : This represents efforts put inby State government to keep control over population growth. This criterion is calculated by using the reciprocal of total fertility rate of each State based on population data for 1971.ee 176 filty ate will get mor gtateshaving lesser on. nis used to offer hig + Thiscriterion ts useO"S ym ee ink higher efficiency koe 2 aie as ratio of State's average Pere: calcul ‘ te dome: ° ercapita gross state dom meen ee perk between 2016-17.and20] inthe three tes : i syenue Deficit Grants to Sta : . ieee deficit grants are those grants ey by : the States to meet their fiscal requirements vies o their own taxes and non-tax SOUrCES and those mr centre fall short, Revenue deficit is the difference bet ee (current) expenditure and revenue receipts. Revenui constitute tax and non-tax resources. : The commission has recommended revenue defi States of the order of three lakh crore rupees in the five ending in 2025-26. : The number of States which earned ability for re grants which was 17 in in 2020-21 has comedown to 26. " 4. Performance-based Incentives and ¢se grants are given on the basis of four maj )) Social sector co Grants to)Stat jor factors.it Telated to governance and a sass are recommended for ; rational distri i) Thsconn stricts and sectors, ssion has develo, ean: 5 performance for thepo Ped an incentives s Wer Sector. This is notlicy an put it provides a window to the State governments an, additionally. toborro s «eal Space for the Centre : According to the 5, Fis ns of the fifteenth finance commission total transfers (a elution and grants added together, constitute about ipsiatess 16, f estimated gross revenue receipts of the Union. This ‘equate fiscal space to the centre to meet its resource ea and spending obligations on national development ui voi. : seal 6, Grants to Local Governments: Grants given to local vyernments include grants to local bodies for growth ofnovel cities and health sector based on performance, in addition to local bodies andmunicipal services. As far as grants to urban local bodies are concerned, it is proposed to provide only basic grants to cities and towns having population of less than one million. For cities with more than one million population, it is proposed to give grants from Million plus Cities Challenge Fund (MCCF) based on performance. This grant is provided from this fund based on performance in air quality improvement, urban drinking water supply, sanitation and social waste management. Criticisms The Tecommendations of the fifteenth finance commission have been criticized on certain grounds. 1. Imposition of conditions on borrowings by States will have adverse impact on their expenditure programme. Therefore, < itdebilitates cooperative fiscal federalism. Ifthe centre fails to show proper discretion in management ama itis not pertinent to fix joint responsibility on S. :x Nananal Rank WS Sloss Rank Rank allagis mercial Rank. SA darks which wore brought under nation lows, Andhra Bank D Caparanon Bank T) New Bank of India 0) Onental Bank of Commeree \) Punizh and Sindh Bank ¥) Vieya Bank ew Bank of India was merged with Punj cht. down the number of nationalized weaned mul 7 underdeveloped couniig, "Min developing as well 2, Promotion of s; habit and banking cult avings habit ; B i + Banks n ar he Promote savil People. In the absence/alwe pker ar Capital Market 223 cers always the possibility of people spending their ai cavings unproductive. In the absence of banks there *puack ot an effective institution to keep money profitably cage, Bovause ofthe existence of banks, people come forward at money, to take loans and toavail other banking facilities. yx commercial banks develop banking habits among the people pagataact them towards banking Transactions. Assistance to capital formation: By way of mobilizing ile resources, banks help in capital formation which is essential freconomic development. By mobilizing savings in the form of depusits from different sections of people, they assist in building apo capital necessary for beneficial production. Capital formation iseflected with the help of savings. Commercial banks execute this work successfully. 4, Advancing loans = Banks provide loan facilities to different sections of people and to various sectors of the economy. This Syn of commercial aks wil ad to rise in ourpt and national income, expansion of job opportunities and increase in the purchasing power with the people. Alll these factors will have immense contribution to economic growth of the country- 5. Industrial development: Traditionally, commercial banks nave been roving large amount of Goanca sistance to SNCSAY and business sector. Thus, they play a significant role in the expansion of the industrial sector and development of business. A large number of branches of ‘commercial banks are concentrated Ha apa and this fiitaes ter lending fo commerce industry and trade. 6. Removal of regional imbalances: Commercial banks substantially help in removal of regional imbalances. By mobilizing resources in the surplus areas and diverting them for investment purposes in deficit areas, commercial banks will have a ak wheContemporary Indian possess an inherent ability to exert influence on economic. by impacting the rate of interest, They can stimulate e acivines by way of supplying huge amount of funds in the 8. Supply of development finance : Commerci: supply moncy needed for different sectors and acti economy. The concept of ‘development finance' has populanty in the modem economic literature. Finances Provided for development purposes on time, in adequate q anc comparatively al a low rate of interest. The financial assi of this nature is essential from agriculture and industry to'selfj employment and small trade, Commercial banks which rustence for subsuntially a long period can accomplish this very successfully. 9. Converting debt into money: Capability to conven debt into mont term and long-term securiti Commercial banks po: cy by way of buying sho es and Paying money for them.’cy noicsol ea] east amon " which acted asa resort to terror’ ws ; = tae, OT aie activities: — os prevail a cia! proportions in many states as Odisha gana, inet Pah, Madhya Pradesh, Jarkhand, Maharashtra Wy; Bergland Chamisghach. What was surmised was Naxals possessing a find of about Rs. 400 crore to Rs, 500 crore mainly of the value of Rs.S00 used to carryout their activities by spending this money at shops and hotels existing near their hideouts and for frnges. The purpose behind demonetisation was to bring undee conzal Naval activities by withdrawing the existing notes from" coho, st activities was of the order of Points Expressed Against and in Favour of Third DemonetisationSy oie! and Capital iuarnce 211 19- 12-2016 allowing people to deposit 5,000 Tupees om stwhile notes into bank account only once. But this i rgerwas withdrawn in just two days. ._slture sector is severely affected by shortage of money. That too rabi crop activitivities would be badly hampered, was charged that it was a measure brought into force withutter haste and without sufficient ground preparation. Theirargument was that this measure would have been by maintaining sufficient amount of printed notes ofsmaller denominations. Automated teller machines were not recalibrated at the earliest. About 40 percent of 2.05 lakh ATMs in the country remained out of functioning. Even at recalibrated ATMs adequate amount of money was not available to customers and people had to queue up before ATMs fora distance ofmany kilometres everyday for longmany days. , Adequate amount ofmoney was not supplied to rural areas. Till 45 days since announcement of demonetisation measure, an amount of only Rs. 400 on an average was made available to each bank account in rural parts. . Foreign embassies functioning in India were haunted by scarcity of money. Supply of new currency notes in the place of notes existed previously took a long time. Old notes of higher denominations had no value and availablity of new notes was delayed. Therefore, a situation was created wherein these offices functioning ina foreign tand (India) were not in a position to carry on transactions in the absence of money. Mainly construction activities were hit hard by financial ctunch. Demonetisation bolstered the extent of unemployment. Rate of unemployment rose owing to retrogression inContempo: an the draft offer document with the stock the securities are proposed to be listed. of filing of the draft offer document with the: E. Post-issue requirements documents submitted to the stock exchange SW working days of finalisation of the basis of allatea (i) The post-issue lead manager shall ensure commencement of trading at all stock exchangi Securities are to be listed are taken within sev Gays of finalisation of basis of allotment. alge *Market expansion ake aso, iY economic devel efore, atop developed in tune ay '0n of a Currency systcy Market and Capital Market 219 sor aati requires is the main responsibility of the Central bank. ree Bank of India has evolved such a currency system. Minimum reserve system has been in force in circulation of arent inIndia. This system was brought into operation in 1957. according tO this system, Reserve Bank of India issues notes for ciculation by keeping 200 crore rupees as minimum reserve. Of ihisminimum reserve, 115 crore rupees will be in the formof gold and 85 crore rupees willbe in the form of foreign exchange. Any amount of money may ‘be brought into circulation over and above 2, Formulation of policy of Appropriate Rate of Interest: Interestrate structure should be evolved in sucha way as toprovide scope for controlled expansion of money. Central bank is required todesign the rate of interestin such a way as to encourage investment ofcapital. Similarly, an effective interest rate policy is needed to control capital market transactions and unnecessary speculative activities. Reserve Bank of India has been making efforts since long, ago to frame an appropriate interestrate policy. Ithas been pursuing apolicy ofreducing the rate of interest at times when money supply and credit creation have to be elevated and rising the interest rate when money supply and ‘unnecessary expenditure haveto be brought under control. 3. Building of Monetary Framework : Reserve Bank of India has a unique contribution in the task of ‘creating and developing a monetary framework required for economic development. Deposit Insurance Corporation established in 1962, Agricultural Refinance Corporation set up in 1963, Unit Trust of India established in 1964 and Industrial Development Bank of ‘India established in the same year are some of the major examples for this. Added to this, Industrial Finance Corporation of India and state Finance Corporations are its other major creations. These institutions not only provide finances to industry and agriculture but also render unprecedented service in220 mobilization of savings and development of ba the public, 4. Expansion of Banking : Reserve Bank of a special role in expansion of commercial cba Commercial banks are making rapid strides in one Turalaswellas scmi-urban areas, providing, more topriority sectors, savings mobilization and rai ing ban among the public. This attainment has undoubtedly been of Reserve Bank of India's interest and effort. 5. Development of Bill Market : Reserve B; tmade a memorable contribution for growth of, establishment of bill market. Although bill market scheme} into force in 1952, it was narrow in scope, and it designed for other banks to get loans from Reserve Bz New bill market which has been operationalized in 1 Providing extraordinary service for short term trade, Resen has introduced substanti Pertaining to bill mark years. These changes aim at facilitating trade and transact maeone ems oe = oo 2 » 6 interest, th. ha: “Test, the role of ‘ Fi Reserve Bank S 7. Inflation Targeting ; Resery, et 7 vente s: Serve Bank has creat Tomrising excessively, InflatContemporary Indian Econo; assistance to states on the basis of perfo; cout the field of family planning. 3. According high priority to female education, Providing more compensation in the form ofmoney to tho} adopting the measure of surgical operations for birth conirg Viilisation of people belonging to different occupat ~ the publicity of family planning programme and 1 opportunities forresearch. d Birth control was accomplished at a high rate during emerg owing to implementation of strict measures as well as incentive provided. However, as a result of relaxed policy pursued by. new governmentat the Centre, birth control measure failed to re; abetter progress since 1978. National Population Policy - 2000 3 Government of India brought into force a new population po! oa the 15th of February 2000. Main features of this natiot population policy areas follows. 1. Encouraging couples to strictly adhere to two children not 2. Stabilising the growth of population by the year 201 3. Thenumber of seats in the Lok Sabha based on population as existing in 1971, and determined to be in force till 200. tobe extended till 2026. Through this, the measure w: fad Punish the states like Tamil Nadu and Kerala which ‘ | familie brought into force the principle of smalli. Bihar, Mame iat loreward states like Uttar Pradesh, - Birsued Minty radesh and Rajasthan which had n te Providing more © measures for population control, by a 1 was decided to ti ber of seats in the Lok-Sabha. i Pepsin growth by the out measures to stabilize “ ringing dows J is per,000 binky Morality rate to less than 30 (30 us13 j Recent Issucs 2, Reducing maternal mortality rate to less than 100 per one lakh births. Pursuing universal immunization measures. ‘nstitutional delieveries, 3. 4. Accomplishing at least 80 percent i ¢ i.e, deliveries in clinics, hospitals and health centers with the help of trained staff. . 5. Providing appropriate information for prevention ofaids and other serious diseases. . 6. Motivating the couple to adopt the principle of two-child family. 7. Enhancing facilities for safe abortions. 8. Strict enforcement of the Chi d Marriage Prevention Act. 9. Giving: special prizes to women entering into wedlock after the age of 21 years. 10. Providing health insurance to the below, povertyline people who undergo surgical operations after having two children. der the 11, Establishing National Commission on Population un e minister to oversee the chairmanship of the prim implementation of this population policy. Conclusion Despite many types of efforts, amount, foreign aid, and so on, famil did not achieve expected progress. Target pertaining to bringing down birth rate has been revised many times. Modifying the target of reducing it to 25 in 1975-76, it was targeted to bring it down to 23 in 1978-79. When it was not accomplished, expectation was to reduce the birth rate to 30 by 1978-79. When the birth rate stood at 33 even in 1981, the renewed target was to bring it down to 30 by 1982-83. When this target was not achieved even in 1988, the renewed target that was fixed was to achieve it by atleast 1990. , Itis ofno wonder that still a scction of people are still unaware ofbirth control programmes. Research and publicity in this direction financial expenditure ofa huge ly planning programme in IndiaI rpanisation and Governance 3 ities roads should be broad and clean; there ould be no deficiency of housing and drinking water supply; here should be pollution-free environment; dirt should not be wn helter-skelter, etc. Such a city is considered to be smart uch towns and ci city. ; Series of works undertaken to build a smart city are considered to be ‘smart city mission’. The aim of this mission or operation is todevelop a city having basic facilities, provide dignified standard of living to citizens and clean and sustainable environment. Further, the mission includes provision of smart solutions for removal of problems. According to census of India 2011, 31 percent of the total population in the country lived in villages and contribution of cities to gross domestic product was 63 percent. Estimates reveal that by the year 2030, 40 percent of the people live in cities and contribution of cities to gross domestic product will rise to 75 percent. Smart city mission has assumed greater significance in this backdrop. Core Infrastructure ‘ Attainment of sustainable, i.e, long lasting and inclusive evelopment is the key factor in smart city mission. Another objective of this mission is to develop compact areas. ‘The following are the infrastructural or basic faciliti + . a to be in existence in a smart city. eee i) Adequate water supply, a Availability of electricity at all times, : et including solid waste management, cient cil i ic transpo vy) Housing race ae ea recloe. ies at affordable rates especially to poorer vi) A strong information technology network,Contemporary Ind; sion, specially €-governance adminis rticipation, ‘t = rginable environnet ; : : al security of citizens, particularly. x) Prove ° children and elderly people, and 3) Healthand education. Strategy s e smal development of smart city will be asiolk 5 1. Eschareain the city is developed stage by. stage: Thron this they are made fit for residential purposes slums are got transformed. 3. Redevelopment is another strategy. Better opportu for residing are provided to the expanding p ‘ay of development of new areas around the cit Greenfield, i, tree cover is expanded with the ol of Temoval of pollution and bringing about impro Vern newironment, Operation in India Government of India b 2015. Selection Process construction of smart Cities, 1 : ‘ — a ‘ound in January 29 16, twenty citie Cities =i basis of all-India competition! Thi e] i ¥ ao, din fast tack round condiicted ‘ae. gan smart cities mission 1 as conducted in the followi =Faanisation and Governance art city mission. nd Belgaum were nd, four cities of ad were Thus, 99 cities have been chosen for sm: In Karnataka, two cities of Davangere 2 iected in the first round. In the second roun¢ galore, Tumkur, Shivamogg4 and Hubballi-Dharw: Al, en. Bangalore city was chosen in the third round. total amount of 2,01,981 Ly. Of this, 1,63, 138 to reconstruction of dance with smart city mission, build 99 cities smart] Bore rupees are ut) pertaining _ The remaining amount of 38,841, crore rupees city initiatives, ie, for activities that make attractive. In five years, central government Rs. 100 crore to each city. as been released to ilized for works B iI be utilized for pan fhe entire city smart and provides grant-in-aid of. i" plementation Smart city mission Enonsored sheme. This wil in other words, the aim is to transfo: ities in five years period. Central government provi bupport of Rs. 48,000 crores in five years period. For implementation of smart city mission a ‘special purpose ehicle’ (office) has to be established at the city level. This office functions as a limited company under the Companies Act, 2013. This office has to be managed by the concemed State government jor the Union Territory and the urban local body by contributing share capital onan equal basis at the rate of 50:50. After selection, pachoty is required to establish a special purpose vehicle, ‘prepare tailed project report and begin implementation of the scheme. Evaluation : 6 fence nas that smart city mission which was brought Gis ine tM aspirations is far behind in meeting its objectives. ed to be transformed to the anticipated level even finds its implementation as a centrally | be in operation as a five years scheme. rm the cities chosen as smart ides financialons on ul h 8 esser extent of cides ae u “ <« of supervision 1S also another: enc ge performance to state of Karnataka, only,9 he rota] granls provided detul g =m ili tal amount of Rs. 886.c1 Eee ee utilized has been. onlyak Sa cy has shown better progress by, of the ati. In implementation aspect, D: recorded remarkable progress. sanctioned B. Informal Sector to cary cn any economic activity. As the ni rma! sector may be considered to be an wnorgan ‘1s economy lacking in organization and whicl sorczice with official ules and laws. In informal sector, 5 like Output, employment, sales, etc, are not effec = this sector largely remains outside the polic) Infon ni ae happens tobe a major sector of the number of countries, Particularly, its share in thé thet wil i il be very big. In such €conomies this secto dominant role i € in emplo e : Beeration Howes, they steno Output and ie cunng donot find a Proper place in ‘na The Ketiong Nationa co Stotor Constituted by ee has defined the infoy Slur cop COSA Of yy Uneaten {ollowing way: NZ oS Dtvate enterprises ‘init19 Recent Issucs Prevailing general opinion is, opportunities available to expand income will provide scope for accomplishment of development. However, this does not fitin well in all circumstances. There willbe scant opportunities fora large number of people to expand incomes. Moreover, income might not have been distributed equally among all people in the society. Choices of people with no income or lesser income will be naturally limited in scope. Further, inspite of wealth and income being adequate in the society, all opportunities may not be forthcoming in an adequate way. What is more, wealth is not at all necessary to secure some choices. For example, a country need not be rich to treat women and men onan equal footing. A society need not be affluent to accept democracy. Therefore, instead of economic factors like wealth or income, the more important factors are human dignity, political and economic freedom, appropriate environment for extension of opportunities, and so on. This is advocated in the concept of human development. Human development is another prominent indicator of overall economic development. Human development index involves seven factors. They are : i) Equity i) Sustainability iti) Productivity iv) Empowerment vy) Lifeexpectancy vi) Educational attainment, and vil) Standard of living 1. Equity : If development has to expand peoples' choices, they must have equal accessibility for opportunities. The following factors are essential for attainment of this. )) Redistribution of productive assets through measures like land reforms.Contemporary Indian Economy * é ; from the rich to the poor through sources roftisea! policy. ction of the credit system so as to provi Recors facilities to even the poorer sections, rofequality in political freedom throug rights. «ability : Along with enjoying the fruits of presentf 2.sostai ources have to be saved and developed in ord exvelopment we rare generation: This is what exactly: sustainable development is not achieve d of enjoying the fruits ’of hment lies. Hf sustainable II be deprive fune gu development, 3, Producti development. Rise inprod Productivity is the cornerstone of h luctivity essentially requires enhancement inhumaninvestment.[n other words, there should be expansion o facilites such as health, education, training and sanitation. Only then wilthe human beingbe ina position to reveal his maximum abilit 4. Empowerment : Human development will be attained wh people are fully empowered. Empowerment will take place in situation where people can exercise their choices in the way they like. indicates existence of political democracy wherein people: caninfluence their decisions about their lives. If empowerment is to soe peopleshould enjoy economic freedom and there. , ‘economic restrictions and regulations on them. a ums e galeimee of human development. opsinyisasueindiaton seeker of people, Hesse! ig p 6. Educational Attai wen ofhuman development. + mae iughalan tt: Educational attainment will be Tacy and admission of students to schools and colleg Bes. There sh Uteracy, Moy "ould be 100 percent achievement in adult es TeOver, admissioy : nof students in primary, secondary and21 nt Issues are the measures of rece! ication should be 100 percent. These inment. tandard of living ismeasured through ‘Ability to buy goods ercapita income is Contrarily, me is lesser. which highe? edi educational al 4. standard of Living: Si a income and purchasing power. a pert will be naturally high when ceal perc more- This paves way for better standard of living. standard of living will below when real percapita jnco! Standard ofliving index involves four prominent factors are described here! Real p ercapi most important in income denotes the individual can secure. real percapita income is Standard of living will be usually Level of ‘consumption : better when the level of consumption ofgoods and services is more. Purchase of goods and services requires more amount of money with the individual. Moreover, output of goods and services should be in an adequate quantity, and they must be available for buying. Minimum necessities : An individual will have a better standard of living only when minimum necessaries of | life are available to him. Very important minimum necessaries are food, clothing and shelter. Further, he should be able to secure health and education facilities atleast at the minimum level. Standard of living will go up when all these facilities are available to the man. iv. Minimum comforts : Comforts like recreation are essential to keepa man happy and for the purpose of development of individual's personality. Standard of living would be high when these comforts are available in an adequate quantity. under. ita income = Real dex of standard of volume of goo Standard of living more. percapita income is the living. Real percapita ds and services each will be high when iii.Contemporary Indfan 202 ; , 9, it aalicy announced on June, 6, 2019, it was Te ds 1 8.50. percent. i 5 TS perce iow of Monetary Policy of Reserve Bankiofiing 1, Revie’ ction F F vn a sony policy is concemed with fixing and n Monetary - humeofimon incirculation in the country. Money supp! ly hepa : aioe yaniable affecting economic conditions. lis . ee imeirculation usually leads to inflation and ‘tin deflationary tendencies. Thus, fluctuations in, wall resu oy controlling money supply inthe ‘economy. ' ‘ bank is the only authority which is vested with the: i cz also convol credit creation. Thus, for the purpose of ma economic stability as well as to achieve other different pur juired to keep under contro] both currency, lation in the country asalso the volume of credit crea ‘crel banks. Conversely, when the economy faces ve money is needed for business expansion, ‘equired to increase supply of Currency notes and e1 s as money In the words of G.K. Shaw, measure undertaken by mon guantity of mon ry policy. Monetary Policy is acon elary authorities 1 Y5 its availability yr oat: ‘0 change the eeMonetary Policy 2S 20 eneral economic ntrol over money nson. ing 0 - Samedi tives of accor Fachicving * e objectives g central bank having co defines monetary policy as "The Rel nt of expansion and contraction of the volume of an00T" jrculation for the explicit purpose of attaining 2 oo pjective such as full-employment". ee monetary policy encompasses many factors suchas the j ofmoney supply that the central bank brings into circulation, = ted by commercial banks and rate of interest. of credit crea! cana Monetary Policy policy consists of two broad types. j) Cheap money policy, and i) Dear (Costly) money Policy. : These policies pertain to rate of interest charged on loans. Since and the volume of credit supplied by banks is capacitated to exp; money supply in the economy, it is to be influenced by way of variations in the rate of interest. 1. Cheap Money Policy: (Cheap money policy pertains to supplying, credit witha very low rate of interest. Central bank pursues cheap money policy during periods of economic depression. During depression, prices will be steadily declining; business profits will be on the downward trend; producers and traders exhibit pessimsistic attitude towards future, and output, investment, employment and income would be falling persistently. In such situations, very large volume of credit is to be supplied to overcome Pen ata te be Sanuuiennes Only when prices star rising, production Wil soe investment of capital would go uP; employment 7 ties will expand and incomes will se. The Pest 0 0 gment credit supply is to reduce interest rate. In other words, ive by bringing down the rate of credit has to be made more att P Kent interest.204 2. Dear Money Policy : Dear money Policy: dit is supplied by charging a very high rate of interes supply needs to be brought down in order to exert Control'or arhich necessitates rise in the rate of interest. Prices of services show a rising trend when the economy ‘ern abundant prospenty. Investment of capital will be massive scale, credit supply will be more, business Di mounting and people are used to possess more amo Insuch situations, very large rise in prices and a dang limits if prices have to be reined in. Raising the rate of in will be most essential to bring contraction in credit, De: policy is one in which credit is supplied at a costly (dear) Recent Trends in Monetary Policy. Recent trends in the monetary policy in India may be as follows. 1, Control of Inflationary Forces: Inflationary fo: exist in the economy asa result of large scale deficit fin: of inflation. The central bank has a major role to play policy in keeping inflation under control. Monetary p Reserve Bank of India is applied in this direction. Itre: ri creation by commercial banks and controls inflation and PI through different types of quantitative and qualitative m credit control. 2. Formulation of Appropriate Rate of Interest: Int Tate policy should be so structured as to facilitate controlled ofmoney. Aneffective interest rate Policy is ofutmost imp to contro} capital market transactions and inessential specul India has been putting in eff formulate an effective interest rates policy since i ati been following the policy of reducing the rate of interest at af when credit creation and Money circulation ara: to be increased.95 gustrial Policy lic to employ share capital by way ofsale e publ lustry to them. ficates of the ind rises. i) ‘Allowing tht e of share cert ») Public auctioning of enterp y) Sale ofassets to the private sector. vi) Entrustment to private persons through direct c jecti rivatisation - oe are the main objectives of privatisation. To bring about efficiency in industrial management. Attainment’ ofrapid industrial growth in the economy. f central authorities. To reduce the power O: timum utilization of resources. To bring about op! s To attempt to spread property ownership more onsultations. widely in oe wo society. . 6. Toincrease exports and to earn huge amount of foreign exchange by way of production of goods of better quality. Advantages Major advantages of privatisation are described as follows. 1. Increase in efficiency: Private enterprise is known for ost absent in performance of, "jobs in the efficiency. Redtapism is alm: private sector. Management of enterprises, production, sales and other processes take place ata rapid pace. 2. Reduction of economic burden : Burden on the public sector in matters like mobilization of resources, undertaking production activity, handling: of labour problems, etc, will be reduced. 3, Freedom from bureaucratic control : Anenterprise in public ownership will be under strict control of the bureaucracy. Privatisation overcomes this problem and facilitates production activity. 4, Encouragement to inventions : Privatisation provides ample scope for inventions, discovery and: innovations. This naturally leads to expansion of business and incase in output. .“lsadvantages : Privatisation leads to Concentration of wealth and economic Power in onlya few Private industrialists, Monopolistic tendencies TOW rapidly 2: Disinvestment tor ude Re) is being pursued in India with regardMarket and Capital Market 213 stone ng among, investors, brokers, institutions and companies. It ea toensure steady flow of savings to channels of investment. © Investor Protection : SEBI is entrusted with the work of aest0T protection. It works to enhance the trust of investors so shat the savings mobilized would be utilized productively. It has the jcular task of safeguarding the interests of' ‘small investors. With thisview, SEBI has to establish proper’ coordination among the three main groups connected with its operations i.e, corporate sector, investorsand intermediaries. 3, Promotion of. Efficient Services : SEBI has the objective of facilitating growth of business of middlemen like brokers, Jobbers, commercial banks, merchant bankers and mutual funds. SEBI tries joensure that the middlemen provide services at competitive prices totheir constituents, namely, investors and the corporate sector. 4. Creation of proper Investment Climate : SEBI is entrusted with the responsibility of creating a proper investment climate so that the corporate sector can raise funds through industrial securities easily and at a low cost. It tries to make the law and rules more effective with regard to investmentin units, industrial securities, life insurance savings plans, industrial projects and mutual funds. 5. Orderly Conduct of Business : SEBI has come into existence with the objective of creating a framework for orderly conduct of business. Itis entrusted with the responsibility of ensuring fair and equal treatment to all the security holders. It also ensures more open, orderly and unprejudiced conduct with regard to mergers and takeovers in the corporate sector. 6. Investor Education : SEBI provides investors with information about market conditions. Its aimis to educate investors and to make them aware of their rights. Investor education is more important to have a vibrant securities market.and jnvestment 42 ge Organisation (WTO) and India ¢ deleterious effects resulting from jsation and the agreements it g ountries have been an issue being which has received broader ich beneficial effects and tries have to face crisis The notion that developing countries af formidable proportions. from World Trade ike India have more to lose than to gain Organisation has gained Disadvantageous Effects The following are the most prominent outthat World Trade Organisation agreement effects on Indian economy. ait Unrestricted Imports : Commodities are required to be ee unrestrictedly from foreign countries, and hence India . | not be in a position to make efforts to raise output and to So we Since the country has to be engaged in trade : a imposing import quotas, imports cannot be restricted at of foreign goods in the Indian market will have deleterious = son a large number of factors such as output, investment, ployment and exports. _ ‘The phenomenon of opening UP of Indian te about two decades ago. By March 199 ; igation of unrestrictedly importing 6,161 im et peerate World Trade Organisation are more © 200 ot eens . about 1600 iti vnnearicied enpii commodities were factors citied to argue has disadvantageous markets to imports 6 India had thetries in any Way. Des” level playing field to producers ¥. Dew s eens and exporters of India, jeje economy is forced to experience unbearable difficulties, x 3. Ill Effect on Small-scale Industry : Wei tg Organisation agreement does not offer any concession based. the size of industries or enterprises. To put it in anott ewan concession is held out to small-scale units in the system of Trade Organisation. Supporting measures such as 800ds for production, according priority in Purchases, available to these industries, and hence they are competing with large-scale industries. As a result, als of small units have gone sick or are being closed. T sector which has a share of 40 percent in total fact output, 50 percent in total employment and 3 exports has been in a state of serious distress. 4.303 ig" “ result, India has to remove quantitative restrictions, and Ae setedly from foreign countries. This factor has i! t of India. to Development of Textiles Industry : iste ig very strong and vibrant But developing ‘ P ing India’s exports through different ves. They have resorted to this measure to in the Pretext of Child Labour fn situations where by developing countries went against the interests Of United States of America, it has attempted to restrict such imports by way of raising many disputes. Major charges levelled are many goods produced for exports by developing. countries like India are resulting in environmental jon and involve employment of child labour. Jn this pretext, America placed restrictions On imports of India’s chemicals, handicrafts, garments and certain other goods. Advantageous Effects The following are to be major agreement on. the Indian economy. 1. Expansion of Investment : WTO has Jaid much emphasis wen unrestricted trade, and this has ted to establishment of new ae and substantial rise in investment of capital in India. ‘reign direct investment too has risen in Indian enterprises. ‘ 2 Production of Quality Products = Aga result of sharp re ae ically among countries, they are forced to produce fears etter quality. There cannot be any compromise as gards quality and producers are required to aghere to the norms