Gist of Hindu Yojana Science Reporter

ContentsGIST OF THE HINDU ......................................................................................................... 2

Hypertension Major Contributor to Avoidable Deaths in India: WHO ........................................................................................ 2No Capital Gains Tax for NIMZs ........................................................................................................................................................ 2Vienna Meet Sees Divisions on India’s Entry into NSG .................................................................................................................. 3The P-5 Club ........................................................................................................................................................................................... 4Antarctica Concerns Grow as Tourism Numbers Rise ...................................................................................................................... 5Abel Prize for Belgian Pierre Deligne ................................................................................................................................................. 6Universal, Rights-based Goals ............................................................................................................................................................... 7Promoting Gender Equality and Women’s Eights ............................................................................................................................ 7India up in Arms against ‘Imbalance’ in ATT Draft ......................................................................................................................... 8BRICS and Mortar for India’s Global Role ......................................................................................................................................... 8ISRO Plans a New High-resolution Earth Satellite ........................................................................................................................... 9UNDP Brackets India with Equatorial Guinea in Human Development Index ........................................................................ 1 0Police Reforms Gender Equality ....................................................................................................................................................... 1 1Black Carbon from South Asia Melting Tibetan Glaciers ............................................................................................................. 1 5Nuclear Cooperation, Key to Multiple Projects: Kazakhstan .................................................................................................... 1 5

GIST OF YOJANA ............................................................................................................. 17Budget Proposals–As Overview ........................................................................................................................................................ 1 7Growth in GDP at Factor Cost at 2004·5 Prices (Percent) ........................................................................................................ 2 0Budget 2013–14 and Beyond: What it Means for Fiscal Consolidation? ................................................................................. 2 4Budget: Concepts and Terminologies ............................................................................................................................................... 2 6A Power Sector Review of Budget .................................................................................................................................................... 2 8Agriculture and Budget ........................................................................................................................................................................ 3 0Procedures for Foreign Portfolio Investors Simplified ................................................................................................................ 3 2Social Sector Outlays–As Assessment .............................................................................................................................................. 3 5India’s Defence Budjet ........................................................................................................................................................................ 3 9Land Use and Agrarain Relations ...................................................................................................................................................... 4 2Land Management can Improve Rural Economy ......................................................................................................................... 4 2

KURUKSHETRA................................................................................................................ 43Poverty in India ................................................................................................................................................................................... 4 3Strategy to Develop Degraded Land ................................................................................................................................................ 4 4Land Acqusition in India Need for a Paradigm Shift ..................................................................................................................... 4 5Global Hunger Index, 2012 ............................................................................................................................................................... 4 8Panel on Climate Change .................................................................................................................................................................. 4 8

PRESS INFORMATION BUREAU .................................................................................. 49Human Development Index ............................................................................................................................................................. 4 9Millennium Development Goals ...................................................................................................................................................... 4 9Planning Commission Hosting Google Hangout ............................................................................................................................ 5 05th BRICS Summit - eThekwini Declaration and Action Plan ................................................................................................... 5 1

SCIENCE REPORTER ...................................................................................................... 58100th Indian Science Congress at Kolkata ..................................................................................................................................... 5 9Recommendations of the Congress .................................................................................................................................................. 5 9Plants Behave a Lot Like Humans! ................................................................................................................................................. 6 0

COURTESY:♦ The Hindu♦ Yojana♦ Kurukshetra♦ Press Information Bureau♦ Science Reporter

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Gist of

THE HINDU

⇒ HYPERTENSION MAJOR CONTRIBUTOR TO

AVOIDABLE DEATHS IN INDIA: WHO• The World Health Organisation (WHO) is

finalising a set of nine voluntary globaltargets that will help in reducing non-communicable diseases (NCDs), particularlyhypertension which is a major contributorto cardio-vascular diseases.

• The voluntary targets being discussed arereduction in premature mortality from NCDsby 25 per cent by 2020 — by reducing intakeof alcohol and physical inactivity by 10 percent each and intake of salt/sodium by 30per cent. This will reduce high bloodpressure incidence by 25 per cent.

• Use of tobacco is targeted to be broughtdown by 30 per cent in addition to improvingmedicines, technology and counselling.

• Hypertension is a major contributor toavoidable death and disease in India, too,with an increasing impact in the rural areas.

• Over 140 million people are believed to besuffering from high blood pressure in thecountry and the number is expected to crossthe 214 million mark in 2030. Hypertension isa major risk factor for cardio-vasculardiseases that killed 2.7 million people in 2004and will result in the death of over 4 millionpeople by 2030.

⇒ NO CAPITAL GAINS TAX FOR NIMZS

• The Central Government, came out with sopsfor setting up of National Investment andManufacturing Zones (NIMZs) doling outvarious benefits, including exemption from

capital gains tax and eligibility for viabilitygap funding.

• According to the document notified by theDepartment of Industrial Policy andPromotion (DIPP), the units in the NIMZswill be exempted from capital gains tax onsale of plant and machinery.

• The tax break will be granted in case of re-investment of sale consideration within threeyears for purchase of new plant andmachinery in any other unit located in thesame NIMZ or another NIMZ.

• NIMZs will now be eligible for Viability GapFunding, which cannot exceed 20 per centof the project cost. As per the norms,developers of NIMZs will be allowed to raisefunds through external commercialborrowings (ECBs) for developing theinternal infrastructure. Soft loans frommultilateral institutions will be explored forfunding infrastructure development inNIMZ.

• Similarly, assistance would be provided fornegotiating non-sovereign multilateral loansby providing back-to-back support, ifnecessary. On the issue of labour policy,the government will put in place a job lossscheme to enable units to pay suitablecompensation, in the eventuality ofclosures, through insurance.

• The compensation under this instrumentwould be equivalent to 20 days’ average payfor every completed year of continuousservice, or any part thereof in excess of sixmonths, it said.

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• The government has proposed to set up 11NIMZs to enhance the share ofmanufacturing in gross domestic product(GDP) to 25 per cent within a decade andcreating 100 million jobs. Welcoming the newnorms, Federation of Indian Chambers ofCommerce and Industry (FICCI) said theseguidelines provided a clarity and directionto investors on how the NIMZs needed tobe developed.

⇒ VIENNA MEET SEES

DIVISIONS ON INDIA’S ENTRY INTO NSG• The United States and three other big powers

this week argued for allowing nuclear-armedIndia into an atomic export control group,but China and several European statesappeared doubtful about the move,diplomats said.

• The divisions were in evidence duringclosed-door talks of the 46-nation NuclearSuppliers Group on whether India could joinand become the NSG’s only member outsidethe Non-Proliferation Treaty (NPT), theysaid.

• The U.S., France, Britain and Russia wereamong those which backed India — Asia’sthird largest economy — while smallerEuropean states such as Ireland, theNetherlands and Switzerland hadreservations.

• China stressed need for equal treatment inSouth Asia, an apparent reference to its allyPakistan, which is also outside the NPT andhas also tested atomic bombs.

• The NSG — which includes the U.S., Russia,China, European Union countries and someothers — is a cartel that tries to ensure thatcivilian nuclear exports are not diverted formilitary purposes.

• India and Pakistan, which have fought threewars, have both refused to sign the 189-nation NPT, which would oblige them to scrapnuclear weapons.

• Close relations between China and Pakistanreflect a long-standing shared wariness of

their common neighbour, India, and a desireto counter U.S. influence across the region.

⇒ IRANIAN NUCLEAR PROGRAMME &WESTERN CONCERN

• Iran and the P5+1 group of world powers inAlmaty are the first to indicate the emergenceof a possible way out of the stalemate overthe Islamic Republic’s nuclear programme.

• In the talks, the P5+1 dropped three earlierdemands: that Iran stop enriching uraniumto a 20 per cent concentration of the U-235isotope, that it close down its heavilyfortified Fordow enrichment plant, and thatit send its stockpile of enriched fuel abroad.

• The United States now issues blanketwaivers for countries which buy Iranian oil.Secondly, the EU General Court has ruledEU sanctions on two major Iranian banksunlawful. And yet, sanctions have hit Iran’seconomy and its people hard: the rial hasfallen 40 per cent in the past year, andunemployment is rising.

• American and European bans have alsointimidated many countries and privatecompanies into suspending Iranian links. Soanything which helps reverse the sanctionstide ought to be welcomed by Tehran.

• The latest P5+1 offer is proof that the hard-line positions the U.S. has taken on theIranian nuclear issue in the past have beencounterproductive.

• Two years ago, the Obama administrationscuttled a Turkish-Brazilian proposal thatwould have involved Iran shipping a majorchunk of its 3.5 per cent enriched uraniumstockpile to Turkey in exchange for enough20 per cent uranium to produce medicalisotopes at the Tehran Research Reactor.

• By killing that deal, the U.S. merely ensuredthat the Iranians went ahead and producedthe 20 per cent uranium themselves.

• It was to sidestep this sort of outcome thatthe former head of the International AtomicEnergy Agency, Mohammed el-Baradei, hadfirst floated the idea of a freeze in sanctions




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on Iran in exchange for a freeze in enrichment.The Almaty offer suggests the U.S. hasfinally understood that this is the only wayto move forward.

⇒ THE P-5 CLUB

• The exclusive P-5 (Permanent Five) club.Theirs is an entrenched reluctance to sharethe high table with others and, from theirperspective, understandably so.

• Presently, at least two of them would be hardput to justify their privileged position.Frequently, the P-5 mouth platitudes toplease the aspirants, even whilst theirnegotiators at the United Nations dowhatever it takes to hold back progress.

• Second, the UfC or the Coffee Club countrieswhich at best total 10-11, including ourneighbour on the west, along with Italy anda few others. Secure in the knowledge thatthey would never make it to the expandedsetting, they work overtime to create fissuresand stall forward movement to keep thehouse divided.

Need for s128 VotesFor Security Council reform to take place, aminimum of 128 votes will be required in the GeneralAssembly on a resolution calling for expansion inboth the categories. In a subsequent phase,individual countries would have to demonstratetheir ability to garner 128 votes for theircandidatures. Ratification by legislatures ofmember states would then make possible theCharter amendment.

Why is the present juncture a make or breakscenario?

Celestial Fireball• The 2012 DA14 asteroid tracked in advance

did not harm us; it skimmed past nearly27,600 km from the Earth on February 15.

• But the same day, a meteor, unconnected with2012 DA14, came out of the blue and explodedover Chelyabinsk, Russia at 9.25 am local timeinjuring more than a thousand people. It hasmany firsts to its credit.

• The 55-foot meteor weighed about 10,000tonnes before it entered Earth’s atmosphere.

• It is the largest known celestial object tostrike Earth more than a century after the onethat came crashing down over the TunguskaRiver in Siberia in 1908.

• The Chelyabinsk meteor had a speed of only18 km per second, far less than the April 22,2012 Sutter’s Mill record speed of 28.6 kmper second. Once the Russian meteorentered the atmosphere, a combination ofpressure and heat caused it to break apart19-24 kilometres above the earth producinga fireball that blazed across the sky.According to the Russian GeographicSociety, the bright flare was more than 2,500degree C.

• The disintegration took place 32.5 secondsafter it entered the atmosphere, and releasedan estimated energy of nearly 500 kilotons,NASA notes.

• The shockwaves caused by the explosionshattered glass and damaged manybuildings. The infrasound produced by themeteor was the strongest ever detected bythe Comprehensive Test Ban TreatyOrganisation (CTBT) sensors.

CITES Convention• The Convention on International Trade in

Endangered Species (CITES), the only treatythat regulates international trade in wildlife,has banned any trade in tiger parts, eitherdomestically or internationally.

• The trade, so far, thus has been understoodas illegal. But here is the shocker: a newinvestigation in China by the UnitedKingdom-basedEnvironmental InvestigationAgency (EIA) has found that domestic tradein China in tiger parts, for skins and tigerwine, is allowed, nurtured, and legalised .

• CITES has begun its 16th Conference ofParties (CoP16) in Bangkok, Thailand(March 3-14).

• The issue of stockpiles and their sale willcome up again, but these internationalnegotiations, while otherwise useful, will be




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far from adequate to secure our wildlife. Aslong as stockpiles exist, the only way forIndia to save its elephants, tigers (and otherwidely poached animals) is to enforcedomestic protection.

• CITES classifies species under differentAppendices, consequent to internationalthreats from poaching and rarity of thespecies.

• Elephants, both Asian and African, are onAppendix 1, with a ban on trade in ivory.Several African states allow trophy huntingand management-based culling quotas forshooting elephants.

• There are thus tonnes of ivory in stockpilesin several African countries. Consequently,several countries demand licences for thelegal sale of elephant ivory.

• In 2007, CITES allowed a one-off sale of ivoryin government-held stockpiles for Botswana,South Africa and Namibia. At CoP16, CITESwill discuss the workings of a “decision-making mechanism” for further sale of ivory.

• This will remain a pulsating threat to wildelephants in India and African countries.

• Consider the numbers: a new study showsthat 11,000 elephants have been poached inGabon since 2004; this year, poachers inKenya killed a family of 11 elephants. Lastyear, in what is perhaps a newly documentedtrend, poachers shot down thousands ofelephants, using machine guns fired fromUgandan helicopters, in Congo (and perhapsin other countries as well). In India, the forestdepartment works hard to ensure the safetyof elephants, and the threat of poachers, whoare adaptive in the killing of several“lucrative” species as well as enforcers whoget in the way, is always a real one.

• Given the global scenario, at this CITESmeeting, India will find itself sandwichedbetween demand and supply forces: bothlegal, and illegal in the garb of legal. Thisoutlines with even more urgency the need tokeep our own forests safe, and not dependon transnational regimes to save our species.

⇒ ANTARCTICA CONCERNS GROW AS

TOURISM NUMBERS RISE

In a remote, frozen, almost pristine land wherethe only human residents are involved in research,that tourism comes with risks, for both the continentand the tourists. Boats pollute water and air, andcreate the potential for more devastatingenvironmental damage. When something goeswrong, help can be an exceptionally long way off.The downturn triggered by the economic meltdowncreated an opportunity for the 50 countries that shareresponsibility through the Antarctic Treaty to setrules to manage tourism, but little has been done. Aninternational committee on Antarctica has producedjust two mandatory rules since it was formed, andneither of those is yet in force. It’s not just thenumbers of tourists but the activities that arechanging.

A major worry is that a large cruise shipcarrying thousands of passengers will run intotrouble in these ice-clogged, storm-prone and poorlycharted waters, creating an environmentallydisastrous oil spill and a humanitarian crisis for thesparsely resourced Antarctic research stations anddistant nations to respond to. The United States hasbeen criticised on environmental grounds for buildinga 1,600-kilometre (995-mile) ice road from McMurdoStation to the South Pole on which tractors drag fueland supplies on sleds. The road provides a morereliable alternative to frequently grounded airservices.A Trial Drug Raises hope to EradicateMalaria

• A candidate drug (ELQ-300) was foundcapable of treating and preventing malariainfection, and even blocking transmissionduring a trial on mice.

• While the currently available drugs targetthe parasite at the blood stage of infection,the candidate drug was able to target boththe liver and blood stages.

• Going beyond destroying the parasite in thebody, the drug (quinolone-3-diaryether) wasfound to be effective in preventing infectionby attacking the parasite forms that are




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crucial to disease transmission (gametocytes,and the vector stages — zygote, ookineteand oocyst).

• Any drug that does even half of what ELQ-300 is capable of will be a boon — nearly 200million people in the world suffer from malariaevery year, and the mortality is as high as 1.2million. To make matters worse, resistance tocurrently available drugs is emerging.

• Two candidate drugs — ELQ-300 and P4Q-391 — were tested against both Plasmodiumf a l c i p a r u m a n d P l a s m o d i u mvivax species . Isolates of P.falciparum and P. vivax taken from patientsinfected with malaria in southern Papua,Indonesia were tested using both the drugcandidates. ELQ-300 was found to besuperior against both drug-resistant species.

⇒ ABEL PRIZE FOR BELGIAN PIERRE DELIGNE

Belgian mathematician Pierre Deligne, who isregarded as one of the most celebratedmathematicians of the 20th century, has been chosenfor this year’s prestigious Abel Prize in Mathematics.The 69-year-old professor emeritus of the Institute ofAdvanced Study, Princeton, is being awarded for his“seminal contributions to algebraic geometry and fortheir transformative impact on number theory,representation theory and related fields.”

⇒ SUBMARINE VARIANT OF

BRAHMOS TEST-FIRED

• The maiden flight of the submarine variantof the Indo-Russian supersonic cruisemissile, BrahMos, was successful when itwas test-fired from a pontoon offVisakhapatnam in the Bay of Bengal.

• It marked a global first in the vertical launchof a supersonic cruise missile from anunderwater platform.

• The anti-ship version of the potent missile,with a range of 290 km, blasted off from thepontoon.

• “The capability has been proven and themissile is ready for fitment on the Navy’sfuture submarines under Project 75-I,”.

Oslo Summit Asks: Is Melting Arctic SeaIce a boon or a bane?

• With India applying for observer status onthe intergovernmental Arctic Council, alongwith China and other countries, the meltingsea ice and its consequences, mainly in termsof opportunities for exploration of naturalresources in the Arctic region, is a crucialdebate.

• At the first Arctic Summit organised by TheEconomist in Oslo on Tuesday, though Indiawas not represented, climate change issuesfigured as much as the region’s undiscoverednatural resources, which many countries andoil companies are eyeing.

• While India set up a research station in theArctic in the 2008, and is keen on a say in thearea, its neighbour is far ahead of it.AChinese icebreaker made a three-monthjourney in the Arctic Ocean last year, thusbecoming the first Asian ship to navigatethrough the treacherous waters.

Putting Bharat on anEqual Footing with India

• Mr. David Cameron is co-chair, along withIndonesian President Susilo BambangYudhoyono and Liberian President EllenJohnson Sirleaf, of a 27-member High LevelPanel of Eminent Persons (HLP) to make“recommendations regarding the vision andshape of a post-2015 development agenda”.

• The Panel was set up by United NationsSecretary-General Ban Ki-moon and has metthree times till now.

• The inter-governmental process ofnegotiating and adopting new goals will startwith the U.N. General Assembly in September2013 and will conclude by 2015.

• India, home to a large segment of humanityand quite far from meeting the presentMillennium Development Goals (MDGs), willhave a key role to play in the agreement overa relevant development framework for post-2015.




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⇒ UNIVERSAL, RIGHTS-BASED GOALS

A universal set of goals based on principles ofhuman rights should be applicable to all countries.The world is no longer divided into north-south, oreast-west. The world order has moved from a G7world to a G20 world, with the poor living largely inmiddle-income rather than low-income countries andwith aid no longer being the main way out of poverty.

In such a world, we cannot have one set ofgoals for the developing world and another one forthe developed world, whose only responsibility inthe old world order was to provide aid. We need toensure that we live in a “more equal” and sustainableworld, adopting principles of equity and commongood but with differentiated responsibilities to attainthat.Tackling Social Exclusion

Eradication of extreme poverty would meanfocusing on the one-third of world’s people withdaily income below $1.25 who live in India. However,we need sharper focus on the bottom 20 per cent ofthe population and at the root causes of poverty andinequality. In India, and elsewhere, this group wouldconsist of groups socially excluded because ofdiscrimination on the basis of caste, religion, ethnicity,or gender. This needs to be tackled at the policy level,rather than just focusing on secular economic growthas the sole means to eliminate poverty.Combating Inequality

We also need to look at inequality and therelationship between the rich and the poor — say theratio between the income and wealth of the top 20 percent and the bottom 20 per cent of the population.This would focus attention on correcting andadjusting the pattern of development during the lastdecade that has led to widening inequalitiesworldwide, with the rich enjoying a disproportionateshare of the gains from development, and very slowprogress in poverty reduction.

⇒ PROMOTING GENDER

EQUALITY AND WOMEN’S EIGHTS

We need much stronger emphasis on genderequality compared to the last round of MDGs. Astrong goal — building on the commitments already

made under the Beijing Platform in 1995 and theConvention on the Elimination of All Forms ofDiscrimination Against Women (Cedaw) — ensuringwomen’s economic, social and political rights isessential. This could be translated into targets onequal ownership of property, including land, aviolence-free life, and equitable representation in law-making bodies.Combining Inclusiveness andSustainability

The Rio+20 Conference in June 2012established an Open Working Group of 30 membersto propose “sustainable development goals” (SDGs)for presentation to the U.N. General Assembly. Thenew MDGs and the SDGs need to be combined intoone set of goals that have both inclusiveness andsustainability.Introducing Monitoring andAccountability

The current MDGs have no monitoringmechanism, eliminating accountability. Once the newgoals are adopted, each country needs to set up atripartite mechanism — including the government,civil society, and the private sector — to monitorprogress in the attainment of the new MDGs.Giant Leap in the Theory of Universe

• The European Space Agency (ESA) unveiledthe most detailed map yet of relic radiationfrom the Big Bang, revealing data it hopeswill shed light on the creation and expansionof our Universe.

• The 50-million pixels, all-sky image of theoldest light adds an edge of precision to someexisting theories, defining more precisely thecomposition of the Universe and its age —about 80 million years older than previouslythought.

• The map is composed of data gathered byESA’s Planck satellite, launched in May 2009to study Cosmic Microwave Background —the remains of ancient radiation emitted asthe Universe started cooling after the BigBang.




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⇒ INDIA UP IN ARMS AGAINST

‘IMBALANCE’ IN ATT DRAFT

• India may ask western countries to “look fornew customers” for their defence equipmentas it feels they were instrumental in loadingthe Arms Trade Treaty (ATT) againstimporters. The Treaty will come up for votingat the U.N. on April 2.

• India feels let down by the West butwelcomed assurances by France and Russiaof keeping the ATT out in all future defencecontracts.

• As the largest arms importer in the world,India is concerned about the “imbalance” inthe ATT’s final draft. While it allowsexporters to unilaterally cancel contracts, aprovision to safeguard the interests ofimporters was quietly dropped.

• “India has not endorsed the treaty text. Thegovernment will take a position after athorough review. The value of a treaty thatdoes not ensure universal adherence wouldbe obviously questionable,” warned thesources, fearing that the decision to ramthrough the ATT by a vote would mean itwill go the same way as the Oslo Accord oncluster munitions did.

• The ATT aims at regulating $ 70 billion worthof annual trade in arms. It is expected to be amore effective instrument than the voluntaryU.N. register for conventional arms.

• The third area where Indian views and thetext of the final draft do not coincide is theexclusion of gifts and loans from the purviewof the Treaty. Sources said this was becauseof a deal cut between China and the EuropeanUnion early on in the negotiations.

⇒ BRICS AND

MORTAR FOR INDIA’S GLOBAL ROLE

• India is at a unique geopolitical moment. Onthe one hand its neighbourhood and thelarger Asian continent are beingunpredictably redefined.

• India and China are charting newgeographies of contests, the Indian Ocean

and South China Sea. The “Arab Spring” hasexposed the fundamental inadequacies inMiddle Eastern and North African governingstructures but has also given rise to anuncertain political future in an importantenergy-producing region. Last, but certainlynot least, China’s growing assertiveness inthe Asia-Pacific region has led to increased,if sometimes seemingly unnecessary, conflictwith neighbours in Southeast Asia and Japan.

• On the other hand, the world is seeing a once-in-a-century churn. The global board ofdirectors that sit on the high table and definerules for conduct of political and economicgovernance are now unrecognisable from thelot just after World War II.

• India must seize the moment to shape theserevisions of rules devised by the Atlanticcountries and defend its growth anddevelopment interests in areas such as trade,Intellectual Property Rights (IPR), space,climate, and energy policy, among others.

• Regional order and global governance areboth in flux and demanding India’s attention.This is not unique by itself. What is differentthis time around is that India has the capacity,increased capabilities and enhanced level ofdemonstrated intent to engage with this dualexternal relations challenge. In order to attainthe global power status it desires, India mustwalk and chew gum at the same time. It musttend to its immediate and extended Asianneighbourhood while also engaging with thetask of shaping a new rules-based politicaland economic order. BRICS represents auniquely appropriate platform and flexiblemechanism with which India can address thisdual imperative.

Engaging with China and Russia in anenvironment free of the sharp edges often wroughtin bilateral negotiations will catalyse congruence overan array of mutually important issues. Any stableAsian order must have at its core, a certain level ofaccord among these three large continental powers.The past would need to be defrayed and the path forfuture integration would need to sidestep suspicion




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and history. Annual BRICS summit-level discussionson political and economic matters allow the threecountries such an arena of tactical camaraderie. Thecurrent moment allows a unique opportunity for thethree to shape a new construct for Asia amidst theregional flux. Perhaps at some stage it may beworthwhile having a summit level RIC meeting on thesidelines of BRICS to discuss this Asian project.

On resetting and reshaping economic andpolitical governance, BRICS has the potential to bethe new (and often criticised) game changer. Thesheer size and rate of growth of intra-BRICS trade andeconomic exchange will allow each of these countriesto exert their collective weight for their individualgains. Who gains more should not matter, as long asevery member benefits from this dispensation and theorder is visibly equitable.

There are a few benefits that India must seekthrough and with the BRICS. First, there are manymultilateral organisations within which a “BRICS-bloc” can exert significant leverage. The U.N. andWorld Trade Organization are two such forums. Whilegeopolitical and economic thinking among BRICS isnot always in-sync, where there is consensus (andthe areas are increasing rapidly) BRICS could be acompelling voice. Like they did on the debates onnon-interference and “Responsibility to Protect.”Similarly, India’s views on climate change, financialnorms, trade rules and so on could also benefit fromBRICS’s aggregate voice. Of course the UNSCmembership issue strikes a discordant note but itshould not cannibalise the possible coming togetheron other matters.

⇒ ISRO PLANS A

NEW HIGH-RESOLUTION EARTH SATELLITE

• The Indian Space Research Organisation isto build a remote sensing satellite, Cartosat-3, capable of taking images of the earth witha resolution of 0.25 metres.

• Currently, GeoEye-1 produces the highestresolution earth images taken by acommercial satellite. The Americanspacecraft, launched in September 2008, iscapable of taking panchromatic images with0.41 metre resolution. WorldView-2, another

satellite operated by the same company,Digital Globe, offers a best resolution of 0.46metres. However, in accordance with U.S.regulations, commercially released imagesfrom these satellites are degraded to 0.5 metreresolution.

• Digital Globe plans to launch WorldView-3next year, which will supply images with aresolution of 0.31 metres. Cartosat-3’s camerawould better that performance. In the wordsof one expert, this satellite’s images couldallow a scooter to be distinguished from acar.

• In 1988, ISRO launched India’s firstoperational remote-sensing satellite, IRS-1A.The best resolution its cameras couldprovide was about 36 metres. Seven yearslater, IRS-1C went into space, with apanchromatic camera that had a resolutionof 5.8 metres. It supplied the highestresolution images available from any civiliansatellite in the world till Ikonos, an Americansatellite launched in 1999, began takingimages with better than one-metre resolution.India launched the Technology ExperimentSatellite in 2001, followed some years laterby the Cartosat-2 series of satellites thatcould take images with 0.8 metre resolution.

⇒ GIVING PANTHERA TIGRIS A CHANCE

• India was once the only home to the world’s“big four” cats — the lion, tiger, cheetah andleopard. It also played host to over 13 percent of global avian species, an impressivenumber of mammalians and an enviablepresence of Lepidopterans (a large order ofinsects that includes moths and butterflies).

• However, once the Mughals, the Britishbureaucracy and India’s feudal aristocracyestablished the hunting of animals to be theultimate symbol of manhood and nobility, itwas only a matter of time before severalspecies became extinct.

• The earliest recorded extinction was that ofthe Himalayan Mountain Quail in 1876,followed by the cheetah, when the Rajah of




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Korwai in northern Madhya Pradesh shotthe last three (a mother and her two cubs) onNovember 24, 1947. Today, according to theInternational Union for Conservation ofNature, nearly 84 bird species are endangeredwhile among mammals, the tiger is teeteringon the brink of extinction.

• The common Indian is least concernedwhether the tiger survives or perishes. Nordoes he care about the consequences ofglobal warming or the diminishing green genepool and biodiversity, which are the key tohuman survival.

• India boasts of being home to about 70 percent of surviving tigers in the world, do Ihave a feasible plan of action for the speciesassured survival?(a) through an ordinance, place all tiger

reserves and contiguous sanctuariesand protected/notified forests in thecountry, together with all their currentadministrative assets and liabilities,under the existing National TigerConservation Authority (NTCA) for adecade. Offset the loss of revenue toStates arising from this ordinance forthe period of its operation, throughspecial budgetary allocations.

(b) concurrently, bring the NTCA under thePrime Minister’s Office.

(c) hold an annual “tiger revival audit” byan independent body of three to fiveexperts, drawn from within and outsidethe country. Induct 30 per cent newmembers to the audit team each yearand retire an equal number from theprevious team.

(d) the Prime Minister must take the annualaudit findings as fresh inputs, formandatory implementation and to keepParliament informed.

(e) place a moratorium on de-notificationsand or alteration of boundaries ofexisting national parks, tiger reserves,wildlife sanctuaries and notified forestsboth by Parliament and by Statelegislatures, through the sameordinance.

(f) enact stringent legislation to deal withpoaching

(g) create a “save the tiger caucus” (in thephraseology and practice of the U.S.Capitol Hill) in both Houses ofParliament and State Legislatures, toregularly monitor results and progresson recommendations of the revival auditand insist on midcourse correctionwhen circumstances so demand.

• Emperor Ashoka chose the Asiatic Lion asthe symbol of India’s nationhood. Twenty-two centuries later, the Democratic Republicof India placed the Royal Bengal Tiger on asimilar pedestal as the national animal. Letus arise to save both.

• Let all Indians be fired up by the optimism ofDame Jane Goodall, the British primatologist,ethologist, anthropologist, and U.N.Messenger of Peace, who, when asked byan interviewer in September 2009 if shebelieved there was “hope for animals andtheir world,” said: “At one time (the 1980s)there were just 12 Californian Condors [thelargest North American land bird and on theverge of extinction] in the wild and one incaptivity.

⇒ UNDP BRACKETS INDIA WITH EQUATORIAL

GUINEA IN HUMAN DEVELOPMENT INDEX

• India has been ranked 136 among 187countries evaluated for human developmentindex (HDI) — a measure for assessingprogress in life expectancy, access toknowledge and a decent standard of livingor gross national income per capita.

• The Human Development Report of theUnited Nations Development Programme(UNDP) for 2013, released, puts India’s HDIvalue for the last year at 0.554, placing it inthe medium human development category,which it shares with Equatorial Guinea.

• On the positive side, India’s HDI value wentup from 0.345 to 0.554 between 1980 and 2012,an increase of 61 per cent or an averageannual increase of 1.5 per cent.





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• Interestingly, the report notes that socialmovements and the specific issues mediahighlight do not always result in politicaltransformations benefiting the broadersociety.

There is a word of appreciation for India for itspolicies on internal conflicts. “India has shown thatwhile policing may be more effective in curbingviolence in the short term, redistribution and overalldevelopment are better strategies to prevent andcontain civil unrest in the medium term,” the reportsays, referring to Operation Green Hunt launchedagainst Maoists, which has come under sharpcriticism from human rights activists within thecountry. The other initiatives that have been laudedare the right to education and the rural employmentguarantee scheme that provides up to 100 days ofunskilled manual labour to eligible poor at astatutory minimum wage. “This initiative [the jobguarantee scheme] is promising because it providesaccess to income and some insurance for the pooragainst the vagaries of seasonal work and affordsindividual the self-respect and empowermentassociated with work.”

Despite India’s progress, its HDI of 0.554 isbelow the average of 0.64 for countries in the mediumhuman development group, and of 0.558 for countriesin South Asia. From South Asia, countries which areclose to India’s HDI rank and population size areBangladesh and Pakistan with HDIs ranked 146 each.But the report points out that the ranking masksinequality in the distribution of human developmentacross the population.

Even on the Gender Inequality Index —inequalities in reproductive health, empowerment andeconomic activity — India has been ranked 132ndamong the 148 countries for which data is available.In India, only 10.9 per cent of the parliamentary seatsare held by women, and 26.6 per cent of adult womenhave reached a secondary or higher level ofeducation, compared with 50.4 per cent of their malecounterparts. For every 100,000 live births, 200women die of causes related to pregnancy, and femaleparticipation in the labour market is 29 per cent,compared with 80.7 per cent for men.

As for the Multidimensional Poverty Index(MPI), which identifies multiple deprivations in the

same household in education, health and livingstandard, India’s value averages out at 0.283, a littleabove Bangladesh’s and Pakistan’s. The figures forevaluating MPI have been drawn from the 2005-06survey, according to which 53.7 per cent of thepopulation lived in multidimensional poverty, whilean additional 16.4 per cent were vulnerable to multipledeprivations.

⇒ POLICE REFORMS GENDER EQUALITY

• Behind the rot is the Police Act of 1861legislated by the British after the IndianMutiny of 1857 to impose a police force upontheir subjects, which could be used solely toconsolidate and perpetuate their rule, saysMr. Singh.

• It has been over a century since the need forreforms was initially felt. The first IndianPolice Commission of 1902-03 found that “thepolice force throughout the country is in amost unsatisfactory condition; that abusesare common everywhere; that this involvesgreat injury to the people and discredit tothe government; and that radical reforms areurgently necessary.”

• “Several commissions and committees havestrongly recommended major changes… butthe political executive continues to retain itsstranglehold on the police. Every successivegovernment finds it convenient to use,misuse and abuse the police for its partisanpolitical ends,” Mr. Singh says.

• Significantly, three of the seven key SupremeCourt directions in the case were — theStates were to establish ‘State SecurityCommission’ (to insulate the police frompolitical pressure), ‘Police EstablishmentBoard’ (to give autonomy in personnelmatters), and ‘Police Complaints Authority’(to look into complaints of policemisconduct).

• A compliance report by the CommonwealthHuman Rights Initiative (CHRI) paints adismal picture. It says that though mostStates have set up the ‘State SecurityCommission,’ they do not reflect the court’s




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criteria with regard to composition, functionand powers. Andhra Pradesh, Jammu andKashmir, Orissa and Tamil Nadu have notcomplied with this directive.

• Only Arunachal Pradesh, Goa, andMeghalaya are in full compliance with all thecriteria laid down by the court for ‘PoliceEstablishment Board,’ while Bihar has beennon-compliant.

• Ironically, no State government hasestablished ‘Police Complaints Authorities’at district and State levels that fully complywith the court orders. A significant minority— Uttar Pradesh, Tamil Nadu, Mizoram,Madhya Pradesh, Jammu and Kashmir andAndhra Pradesh — have completely ignoredthe directive.

• Another peculiar case is that of the ModelPolice Bill, prepared in 2006 by the PoliceAct Drafting Committee (PADC) of theUnion Home Ministry, which complementsthe court’s judgment. The Ministry, whichcontrols the Delhi Police, was to enact the“Model Act” in the National Capital so thatit could be implemented by other States (aslaw and order in a state subject), but the filehas been shuttling between North Block andthe Delhi government.

• Noting that so far only 12 States haveenacted their own versions of the new PoliceAct, CHRI’s Coordinator (Police ReformsProgramme) Navaz Kotwal observes: “Acursory look at the recent laws shows thatmost of these new pieces of legislation areas regressive as — if not more than — thearchaic laws that they replaced. New lawsare being drafted in complete secrecy by asmall lobby of police officers and bureaucratswithout involving the public. They givestatutory sanction to all the bad practicesthat existed. Worryingly, these Acts tend toreduce or dilute accountability.”

• However, since the time the princely state ofTravancore appointed women as SpecialPolice Constables in 1933 for the first time inmodern India, progress on this front has been

tardy. While repeated recommendations statethat women should account for at least a thirdof the civil police force up to the level ofsub-inspectors, as of 2011, of a total of 16.6lakh personnel, only 93,887 were women. Thisaccounted for a mere 5.65 per cent, markingan increase of 4.6 percentage points over twodecades since 1991.

• Among the States, Maharashtra has made alate surge. As of 2011, in absolute terms, ithad the highest number of women personnel,doubling the number in two years since 2009.It had 12,813 women in 2009 and the numberdoubled to 24,219 in 2011, which is 13.2 percent of the 1.82 lakh-strong force. Tamil Nadu,an early starter, followed with the figure of15,864, also having doubled the number inthe two-year period. Yet, at the other end ofthe spectrum is Mizoram, with not onewoman in a force of 10,861 and the UnionTerritory of Daman and Diu.

• Likewise, the representation of women in theCentral police forces remains dismal. Womenpersonnel and officers constituted a mere 2per cent of the more than two lakh troopersrecruited by paramilitary forces in the lastthree years and in the initial few months of2013. While 20,73,48 personnel were recruitedin various ranks in the CRPF, the BSF, theITBP, the SSB, the CISF, Assam Rifles andso on between 2010 and 2013, the number ofwomen among them was a mere 4,733.

• Moreover, 13 States and Union Territorieshave no all-woman police stations. Accordingto data from the Bureau of Police Researchand Development, there were just 442 suchpolice stations across India as on January 1,2011. Tamil Nadu had the maximum numberof stations (196), followed by Uttar Pradesh(71). Beyond the numbers, for the womenwho are already in, there is a range of issuesthat need to be addressed to mainstream andempower them for the full gamut of policingfunctions. A lot remains to be done also interms of working conditions and facilitiesthat are oriented to their needs.



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⇒ ‘DON’T MUDDY THE

KISHENGANGA VERDICT’The verdict (Part I) of the Court of Arbitration

(CoA) on the Kishenganga dispute raised by Pakistanhas gone in favour of India on the primary count ofwhether or not the project ab initio violates the IndusWaters Treaty (IWT). On a plain reading of the textof the Treaty, the project was clearly in order.Annexure D, Part 3, Section 15(iii) states, “Where aPlant is located on a tributary of the Jhelum on whichPakistan has any agricultural or hydroelectric use,the water released below the plant may be delivered,if necessary, into another tributary but only to theextent that the then existing agricultural use orhydroelectric use by Pakistan on the former tributarywould not be adversely affected.”

The Kishenganga is a tributary of the Jhelumwhich takes the name Neelum on the Pakistan side ofKashmir. The project under construction by India onthis stem was originally planned as a 900 MW storageproject but was subsequently converted into a 330MW run-of-the river scheme following environmentaland displacement issues in the Indian catchment. Therevised project would divert Kishenganga flows east,less ecological releases, through a tunnel to join theMadmati Nullah. This in turn flows into the KashmirValley to join the Wular Lake that is drained by themain Jhelum which flows into the Pakistani side ofKashmir where it is met by the Neelum river a littleabove Muzaffarabad.

The charge of illegality raised by Pakistan wasthus clearly a red herring. The real issue was whetherPakistan would receive sufficient flows for its own930 MW Neelum-Jhelum project with a vague andfluctuating irrigation component of up to 1,30,000acres. India had agreed to let down some minimumreleases and also argued that these flows would beaugmented by other free flowing nullahs that join theriver between the Indian and Pakistan dams.

The CoA, however, has ruled that India mustmaintain a minimum rate of flow below itsKishenganga dam and that it will determine thisquantum in its final award to be announced by theyear-end. While that award is awaited, what is notclear is whether the CoA satisfied itself about thenature and quantum of Pakistan’s “then existing

uses”: when it first raised the issue with India. Thisa matter on which the Pakistan position has beendodgy from the very start, with varying claims butlittle to show by way of “then existing uses” on theground.

This issue needs to be clarified beyond doubt,else it will mean that while India is held to the letterand spirit of the Treaty, Pakistan is not and its waterdemand may be arbitrarily enhanced at will. Thesecond ruling the CoA has given is on Pakistan’sargument that the Neutral Expert’s (NE) award on theBaglihar dispute is bad insofar as it permits India todeplete its dead storage in order to flush the reservoirof accumulating sediment. India earlier compromisedon this issue in the case of the Sallal project, also onthe Chenab. In the result the dam all but silted upwithin a single season, drastically reducing powerproduction. The CoA has however stated the rulingwould not apply to Indian projects currently underoperation or construction whose designs have beencommunicated to Pakistan and have not beenobjected to by the latter.

The fact is that against a total storage of 3.60million acre feet to which India is entitled on the threewestern rivers, the current storage is pretty near zero.All its major projects are run-of-river schemes thathave strictly determined “pondages.” Section 2(g) ofAnnexure D, defines a “run-of-river” plant as “ahydroelectric plant that develops power without LiveStorage as an integral part of the plant, except forpondage and surcharge storages.” Pondage, in turn,means “Live Storage of only sufficient magnitude tomeet the fluctuations in the discharge of the turbinesarising from variations in the daily and weekly loadsof the plants.” The ponded water must be returned tothe river within 24 hours, the system operating muchlike a circulating fountain.

⇒ THIRD ANTI-SUBMARINE

WARFARE CORVETTE LAUNCHED IN KOLKATA

• In a major step towards indigenisation andmaking the Navy self-reliant, the third anti-submarine warfare (ASW) corvette,designed under the ambitious Project-28 (P-28) by the Navy’s Directorate of NavalDesign, was launched in Kolkata.




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• Aimed at enhancing the Navy’s underwaterwarfare capabilities, the warship, in a first ofits kind, will be fitted with indigenous state-of-the-art weapons and sensors, including amedium range gun, torpedo tube launchers,rocket launchers and close-in weaponsystem.

• Being built by one of India’s leadingshipbuilders, Garden Reach Shipbuilders &Engineers Ltd. (GRSE), it has been namedafter an island — Kiltan — in theLakshwadweep archipelago of India.

• With nearly 90% indigenisation content, thebuilding of the corvette was a major initiative.

• The first GRSE-built ASW corvette, Kamorta,is expected to be delivered to the Navy bythis year-end. It was launched on April 19,2010 and had suffered a delay of nearly oneyear.

• The remaining ships, according to GRSE, willbe delivered by 2016. The fourth ASWcorvette will be launched in 2014 and built,fitted and tested and delivered to the Navyin little over 20 months.

BLACK CARBON FROM

SOUTH ASIA MELTING TIBETAN GLACIERS

• Pollutants brought in by monsoon windsfrom South Asia — and not industrialemissions from China — are behind the

melting of glaciers on the Tibetan plateau, aleading Chinese scientist has claimed.

NUCLEAR COOPERATION, KEY TO MULTIPLE

PROJECTS: KAZAKHSTAN

Kazakhstan has said interaction with India innuclear energy will open up prospects forimplementation of other “breakthrough projects” inmany of the priority sectors. Kazakhstan, the largestand most dynamic economy among five CentralAsian states, wants civil nuclear energy cooperationthat will benefit both countries. Kazakhstan is a majorproducer and exporter of uranium and has alwayssignalled its interest in supplying its products toIndia. Its company Kazatomprom has already signedan MoU with NPCIL. The foundation was laid withthe signing of an Inter-Governmental Agreement oncooperation in peaceful uses of nuclear energy. Thisled to Kazakhstan assuring India of supply of 2,100tonnes of uranium. “We hope that our cooperation inthe nuclear field will lead to intensive cooperation inthe exchange of technology and creation of jointventures,” reiterated Mr. Idrissov, who is fluent inHindi. The two sides have already agreed to set upa Centre of Excellence in information andcommunication technology at Gumilyov EurasianNational University in Astana. As it is known, Russiatook the initiative in 2000 to establish an internationaltransport corridor “North-South” and Kazakhstanjoined it in 2003. Kazakhstan.




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Gist of

YOJANA

⇒ BUDGET PROPOSALS–AS OVERVIEW

Union Budget ended out creditably onthe main task for fiscal 2012-13. It keptthe fiscal deficit under control at 5.2

percent of GDP instead of the often feared 6 percentestimate, as late as September 2012. Thoughsuperficially the dip in the fiscal deficit is just amarginal improvement from the revised target of 5.3percent, it is the first time since 2008-09 that the fiscaldeficit calculated by the finance ministry will dip closeto 5 percent. This is significant considering that thecurrent account deficit will also close out this fiscalalmost at 5 percent. Further, the revenue deficit hasbeen contained at 3.9 percent in the current fiscal andwould be brought down to 3.3 percent in 2013-14.

Budget 2013-14 has staved off the downgradefrom international rating agencies, plumped forinvestment at the cost of consumption and tried tomake India a better place to invest in. “In the processit has been harsh on expenditure. The FinanceMinister has used the scalpel on the subsidies too.As the medium term fiscal policy statement notes“Major subsidies in the Revised Estimates for 2012-13 have increased to Rs 2,47,854 crore as comparedto the Budget Estimates for 2012-13 of Rs 1,79,554crore. The major part of increase has come frompetroleum subsidies that went up from Rs 43,580crore in BE 2012-13 to Rs 96,880 crore in RE 2012-13”.This is a 122 percent rise that the minister has clawedback in 2013-14.

So what is the scene with major subsidies?They are budgeted at Rs 2,20,972 crore in BE 2013-14.Total subsidies are at 2.6 percent of GDP in RE 2012-13 and are budgeted to be at 2 percent of GDP in 2013-14, the commitment the finance minister has taken on

from the Vijay Kelkar committee. The subsidy bill ispegged lower by 11 percent in 2013-14. The Budgethopes to cap the total expenditure on major subsidiesincluding fuel, food and fertiliser at Rs 2,20,971.50crore for the 201,3-14 fiscal as against Rs 2,47,854crore in the revised estimates for this fiscal.

Interestingly, the revised estimates for thisfiscal are higher by 38 percent compared to thebudget estimate of Rs 1,79,554 crore.

While the oil subsidy is pegged at Rs 65,000crore for next fiscal against the revised estimate (RE)of Rs 96,880 crore in 2012-13 fiscal, the food subsidyis estimated to rise to Rs 90,000 crore next fiscal fromthe RE of Rs 85,000 crore in 2012-13. The fertilisersubsidy is also pegged slightly lower at Rs 65,971.50crore in the next fiscal, as against the RE of Rs 65,974crore in 2012-13 fiscal.

To balance these giveaways the budget hasbuilt in an aggressive tax mobilisation target. Itincludes Rs 18,000 crore of additional revenuemobilisation measures. The same document says“With these measures tax revenues in 2013-14 areexpected to grow at 19.1 percent. The tax to GDP ratioestimated in the Budget for 20 13-14 is 10.9 percent.Budget Estimates for 2013-14 assumes a normal taxgrowth of 17 percent over RE 2012-13 and remainingtax growth emanating from additional resourcemobilization measures.

The bleak economic outlook gives the ministerspace to keep tax giveaways to almost nil this year.Once economic growth returns next year there will bedemands for tax breaks. The fiscal policy statementpoints out “As the tax to GDP ratio increases, furtherimprovements would be more gradual and difficult toachieve. The outlook for tax revenues for the years2014-15 and 2015-16 has been designed keeping this




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in mind”. In a hope to reach a tax to GDP ratio of 11.9percent, the Budget has estimated a 19 percent rise inrevenue receipts to Rs 10,56,331 crore in 2013-14 ascompared to a revised estimate of Rs 8,71,828 crorefor the fiscal.

So far as the market borrowings are concerned,the gross market borrowings have been pegged at arecord Rs 6,29,009 crore in 2013-14, the netborrowings are expected to rise to Rs 4,84,000 crore.This is just a 3.5 percent rise over the revised estimateof Rs 4,67384 crore in the current fiscal. Thedifference is due to the record redemption of bondsestimated at Rs 1,45,009 crore in 2013-14.

It is betting heavily on proceeds fromdisinvestment in state owned firms to help finance theambitious fiscal deficit target. The Budget hasdoubled the disinvestment target for next fiscal to Rs40,000 crore, as against a revised estimate of Rs24,000 crore in the current fiscal. In addition, thegovernment is also betting on raising Rs 14,000 crorefrom selling off its residual stake in Hindustan Zinc,Balco and SUUTI.

Though finance minister P Chidambaram didnot announce the disinvestment target in his speech,the total estimate of Rs 55,814 crore works out to thehighest target from stake sale proceeds in over adecade.

Among the sectoral initiatives the financeminister announced that independent regulator willbe expected to provide solutions to revive amongother the road sector, which has seen a slowdown inaward and implementation of projects.

To be eligible to claim the benefits the homebuyers will have to buy their first home whose valueshould not exceed Rs 40 lakh and the home loanshould be restricted to Rs 251akh. While the loanneeds to be taken between April 1,2013 and March 31,2014, the buyer can claim the available benefit ofdeduction Rs 1 lakh over a period of two years.

In case the loan is taken in the middle of 2013-14, the buyer can claim the applicable benefit in theassessment year beginning April 2014 and theremaining amount can be claimed in the nextassessment year. For the capital markets in an effort

to bring the derivative trading in commodities and thesecurities market at par, the finance ministerannounced the commodities transaction tax (CTT) of0.01 percent of the price of the trade on allcommodities except agricultural commodities.

The finance minister also announced reductionof the securities transaction tax on equity futuresfrom existing 0.17 percent to 0.01 percent bringingboth CTT and STT at par.

“There is no distinction between derivativetrading in the securities market and derivative tradingin the commodities market, only the underlying assetis different. I propose to levy CTT on non-agricultural commodities futures contracts at thesame rate as on equity futures, which is at 0.01percent of the price of the trade,” said the FinanceMinister in his speech.

To revive the weakened investment climate inthe country and to quicken the implementation ofprojects, the budget 2013-14 proposed to offerincentives to companies that step in to makeinvestments. The finance minister has alsoannounced an investment allowance of 15 percentfor all new high value investments of more than Rs100 crore over the next two financial years. Thebenefit will be in addition to the current rates ofdepreciation. It has however taken couple ofmeasures to plug the loopholes for tax avoidance bycompanies.

But, what about inflation management? TheReserve Bank of India would soon launch inflation-indexed bonds to make people move away from goldas the instrument of effective hedge against inflation.“This will be done next fiscal. We will have our cashand debt management meeting towards the end ofthis financial year and

hopefully, from the first or second month of thenext fiscal, we will launch inflation-indexed bonds,”RBI Deputy Governor HR Khan told reporters. Thecentral bank has been planning to introduce IIBs tokeep investors away from gold as a hedge againstinflation. The final surmise-a tough set of decisionsin a difficult year, that is what Budget 2013-14 will beknown as.




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12TH PLAN PROJECTS INVESTMENT OF RS 55,00,000 CROREIN INFRASTRUCTURE

While presenting the Budget for 2013-14, the Finance Minister P. Chidambaram said that the growthrate of an economy is correlated with the investment rate. The key to restart the growth engine is toattract more investment, both from domestic investors and foreign investors. He said that efforts willbe made to improve communication of the country’s policies to remove any apprehension or distrustin the minds of investors, including fears about undue regulatory burden or application of tax laws.‘Doing business in India’ must be seen as easy, friendly and mutually beneficial.While every sector can absorb new investment, it is the infrastructure sector that needs large volumesof investment. The 12th Plan projects an investments of USD 1 trillion or Rs. 55,00,000 crore ininfrastructure. The Plan envisages that the private sector will share 47 percent of the investment.Besides, India needs new and innovative instruments to mobilize funds for this order of investment.Government has taken or will take the following measures to increase investment in infrastructure:Infrastructure Debt Funds (IDF) will be encouraged. These funds will raise resources and, throughtake-out finance, credit enhancement and other innovative means, provide long-term low-cost debt forinfrastructure projects. Four IDFs have been registered with SEBI so far and two of them were launchedin the month of February, 2013.India Infrastructure Finance Corporation Ltd (IICL), in partnership with the Asian Development Bank,will offer credit enhancement to infrastructure companies that wish to access the bond market to taplong term funds.In the last two years, a number of institutions were allowed to issue tax free bonds. They raised Rs.30,000 crore in 2011-12 and are expected to raise about Rs. 25,000 crore in 2012-13. It is proposedto allow some institutions to issue, tax free bonds in 2013-14, strictly based on need and capacity toraise money in the market, upto a total sum of Rs. 50,000 crore.Multilateral Development Banks are keen to assist in efforts to promote regional connectivity.Combining the ‘Look East’ policy and the interests of the North Eastern States, it is proposed to seekthe assistance of the World Bank and the Asian Development Bank to build roads in the North EasternStates and connect them to Myanmar.NABARD operates the Rural Infrastructure Development Fund (RIDF). RIDF has successfully utilized18 tranches so far. It is proposed to raise the corpus of RIDF-XIX in 2013-14 to Rs.20,000 crore.Pursuant to the announcement made last year, a sum of Rs. 5000 crore will be made available toNABARD to finance construction of warehouses, godowns, silos and cold storage units designed to storeunits designed to store agricultural produce, both in the public and the private sectors. This windowwill also finance, through the State Governments, construction of godowns by panchayats to enablefarmers to store their produce the Finance Minister announced.




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GROWTH IN GDP AT FACTOR COST AT 2004·5 PRICES (PERCENT)2005-06 2006-07 2007-08 2008-09 2009-103R 2010-112R 2011-121R 2012-13AE

Agriculture, forestry & fishing 5.1 4.2 5.8 0.1 0.8 7.9 3.6 1.8Mining & quarrying 1.3 7.5 3.7 2.1 5.9 4.9 -0.6 0.4Manufacturing 10.1 14.3 10.3 4.3 11.3 9.7 2.7 1.9Electricity, gas, & water supply 7.1 9.3 8.3 4.6 6.2 5.2 6.5 4.9Construction 12.8 10.3 10.8 5.3 6.7 10.2 5.6 5.9Trade, hotels, & restaurants,transport & communication 12.0 11.6 10.9 7.5 10.4 12.3 7.0 5.2Financing, insurance, real estate &business services 12.6 14.0 12.0 12.0 9.7 10.1 11.7 8.6Community, social & personal services 7.1 2.8 6.9 12.5 11.7 4.3 6.0 6.8GDP at factor cost 9.5 9.6 9.3 6.7 8.6 9.3 6.2 5.0Source: Central Statistics Office (CSO).Notes:1R: First Revised Estimate,2R: Second Revised Estimate,3R: Third Revised Estimate,AE: Advance Estimate.

PRIVATE FINAL CONSUMPTION EXPENDITURE: ANNUAL GROWTH AND SHARES AT 2004–2005 PRICE

2004-05 2006-07 2007-08 2008-09 2009-10 2010-111R 2011-122R

Annual Growth (Percent)Food, beverages, & tobacco 3.4 6.4 3.3 0.4 5.9 5.8Clothing & footwear 23.3 5.0 5.0 14.9 20.2 -3.9Gross Rent, fuel, & power 3.8 4.7 3.6 6.0 4.2 6.2Furniture, furnishings, etc. 17.1 16.1 12.2 9.0 16.6 6.2Medical care & health services 8.7 4.5 6.9 8.9 7.6 6.2Transport & communication 9.1 7.9 7.7 12.1 10.0 9.8Recreation, education, & cultural services 8.4 9.8 6.8 4.0 11.8 8.1Miscellaneous goods\ & services 21.1 28.6 20.2 15.7 7.9 19.1Total private consumption expenditure 8.7 9.2 7.1 7.5 8.7 7.9

Share in Total (Percent)Food, beverages, & tobacco 40.0 37.3 36.3 35.0 32.7 31.8 31.2Clothing & footwear 6.6 8.3 8.0 7.8 8.4 9.3 8.2Gross Rent, fuel, & power 13.8 12.6 12.1 11.7 11.5 11.1 10.9Furniture, furnishings, etc. 3.4 3.9 4.1 4.3 4.4 4.7 4.6Medical care & health services 5.0 5.0 4.8 4.8 4.8 4.8 4.7Transport & communication 19.3 18.9 18.7 18.8 19.6 19.8 20.2Recreation, education, & cultural services 3.0 3.0 3.0 3.0 2.9 3.0 3.0Miscellaneous goods & services 8.9 11.0 13.0 14.6 15.7 15.6 17.2Total private consumption expenditure 100.0 160.0 100.0 100.0 100.0 100.0 100.0Source: CSO.Notes:1R: First Revised Estimate,2R: Second Revised Estimate

HOW IS THE UNION BUDGET FORMULATED?The budget process in India, like in most other countries, comprises four distinct phases:

(i) Budget formulation- preparation of estimates of expenditure and receipts for the ensuing financialyear;

(ii) budget enactment- approval of the proposed Budget by the Legislature through the enactment ofFinance Bill and Appropriation Bill;

(iii) budget execution- enforcement of the provisions in the Finance Act and Appropriation Act by thegovernment-collection of receipts and making disbursements for various services as approved bythe Legislature;




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(iv) legislative review of budget implementation- audits of government’s financial operations on behalf ofthe Legislature.

Process Commences in August-September

By convention, the Union Budget for next financial year is presented in Lok Sabha by the finance ministeron the last working day of February. However, the process of budget formulation starts in the last week ofAugust or the first fortnight of September. To get the process started, the Budget Division in the Departmentof Economic Affairs under the Ministry of Finance issues the annual budget circular to all the Uniongovernment ministries/departments around August- September. The Circular contains detailed instructionsfor these ministries/ departments on the form and content of the statement of budget estimates to beprepared by them.

Three kinds of figures in a Budget

The ministries are required to provide three different kinds of figures relating to their expenditures andreceipts during this process of budget preparation. These are: budget estimates, revised estimates andactuals.Let’s understand this in the context of Union budget 2013-14, which was presented, as usual, on 28th ofFebruary 2013 by the Finance Minister, Shri P Chidambaram on the floor of Lok Sabha. However, the processof its formulation would have got started in August 2012 through issuance of budget circular of the BudgetDivision and this process would have continued till February 2013.The approval of Parliament is sought for the estimated receipts/expenditures for 2013-14, which would becalled budget estimates. At the same time, the Union government, in its budget for 2013-14, would alsopresent revised estimates for the ongoing financial year 2012-13. The government would not seek approvalfrom Parliament of revised estimates of2012-13; but, these revised estimates allow the government toreallocate its funds among various ministries based on the implementation of the budget for 2012-13 duringthe first six months of financiala year 2012-13. Finally, ministries also report their actual receipts andexpenditures for the previous financial year 2011-12. Hence, the Union budget for 2013-14 consists of budgetestimates for 2013-14, revised estimates for 2012-13, and actual expenditures and receipts of 2011-12.

Planning Commission comes inThe ministries would provide budget estimates for plan expenditure for budget estimates for the next financialyear, only after they have discussed their respective plan schemes with the Central Planning Commission.The Planning Commission depends on the finance ministry to first arrive at the size of the gross budgetarysupport, which would be provided in the budget for the next annual plan of the Union government. Inprinciple, the size of each annual plan should be derived from the approved size of the overall Five-YearPlan (12th Five-Year Plan, 2012-13 to 2016-17, in the present instance). However, in practice, the size of thegross budgetary support for an annual plan also depends on the expected availability of funds with thefinance ministry for the next financial year.

Reducing deficit, a PriorityIn the past few years, the finance ministry has been vociferously arguing for reduction of fiscal deficit andrevenue deficit of the Union government, citing the targets set by the Fiscal Responsibility and BudgetManagement Act and its rules. Hence, presently, the aspirations of the Planning Commission and Uniongovernment ministries with regard to spending face the legal hurdle of this Act, which has made it mandatoryfor the Union government to show the revenue deficit as nil (total revenue expenditure not exceeding total




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revenue receipts by even a single rupee) and the fiscal deficit as less than 3 per cent of GDP. This meansnew borrowing of the government in a financial year cannot exceed 3 per cent of the country’s GDP forthat year.

Final Stages of Budget PreparationDuring the final stage of budget preparation, the revenue-earning ministries of the Union governmentprovide the estimates for their revenue receipts in the current fiscal year (revised estimates) and next fiscalyear (budget estimates) to the finance ministry. Subsequently, usually in the month of January, moreattention is paid to finalisation of the estimated receipts. With an idea about the total requirement ofresources to meet expenditures in the next fiscal year, the finance ministry focuses on the revenue receiptsfor the next fiscal.At this stage of budget preparation, the finance minister examines the budget proposals prepared by theministry and makes changes in them, if required. The finance minister consults the Prime Minister, andalso briefs the Union Cabinet, about the budget at this stage. If there is any conflict between any ministryand the finance ministry with regard to the budget, the matter is supposed to be resolved by the Cabinet.

Consultations with Various Stakeholders CrucialIn the run-up to Union Budget each year, the Finance Minister holds pre-budget consultations withrelevant stakeholders. The FM also holds consultations with Finance Ministers of States/UnionTerritories as well as Trade and Industry representatives. This has great significance for the process ofbudget formulation as it helps the FM take decisions on suitable fiscal policy changes to be announcedduring the budget.For this year’s budget, representatives from the agriculture sector, various trade unions, economists,banking and financial institutions and also social sector groups participated in these consultations inJanuary 2013. Among others, a delegation of People’s Budget Initiative also met Finance Ministry officialsand shared the People’s Charter of Demands in the month of January 2013. But this year too, like inprevious years, the process started late. Desired changes in expenditure programmes and policies canbe influenced only if the consultations are begun earlier, preferably in October.

Consolidation of Budget DataAs the last steps, the budget division in the finance ministry consolidates all figures to be presented inthe budget and prepares the final budget documents. The National Informatics Centre (NIC) helps thebudget division in the process of consolidation of the budget data, which has been fully computerised.At the end of this process, the finance minister takes the permission of the President of India forpresenting the Union budget to Parliament. It would be useful to point out that while the second andthe third stage in the budget cycle of our country are reasonably transparent, the first stage of actualbudget preparation cannot be said to be open. The process is rather carried out behind closed doors.

TAXATION : HIGHLIGHTS; UNION BUDGET 2013/14• Tax Savings of Rs. 2000 for assessee having taxable income upto Rs. 5 Lakhs• Additional deduction of interest upto Rs. I Lakhs for persons taking home loan (not exceeding Rs.

25 Lakhs) for their first home(not exceeding Rs. 40 Lakhs) during the period 01-04-2013 to 31-03-2014

• 10 percent Surcharge on Individual, HUF, Partnership firms if the taxable income exceeds Rs. lCrores




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• 10 percent Surcharge on domestic Companies if the taxable income exceeds Rs. 10 Crore. (5percent - Surcharge if the taxable income exceeds Rs. 1 Crore) - Valid only for 1 year

• 5 percent Surcharge on foreign Companies if the taxable income exceeds Rs. 10 Crore. (2 percentSurcharge if the taxable income exceeds Rs. 1 Crore) - Valid only for 1 year

• Surcharge on Dividend Distribution Tax etc increased from 5 percent to 10 percent• Investment allowance of 15 percent for companies investing Rs. 100 Crore or more in plant and

machinery during 01-04-2013 to 31-03-2015• STT Reduced on Equity Futures/ MF Units.• Commodity transaction tax introduced on non-agricultural commodities futures contracts• One percent TDS on the value of the transfer of immovable property (except agricultural land)

where the consideration exceeds Rs. 50 Lakhs• Gross Total Income Limit under Rajiv Gandhi Equity Savings Scheme has been increased from 10

Lakhs to 12 Lakhs which shall be allowed for three consecutive assessment years.Service Tax

• All AC restaurants (Whether serving Alcohol or not) are subjected to Service Tax• Service Tax to be charged on Vehicle Parking fees

Excise• Specific Excise Duty Increased on Cigarettes, Cigars, Cheroots, Cigarillos• Excise Duty increased on SUV (Except those registered as taxis) from 27 percent to 30 percent• Excise duty increased on mobile phones (Pricing above Rs. 2000) from 1 percent to 6 percent

Customs• Duty free jewellery allowed from abroad in case of gentleman - Rs. 50000, in case of Lady-

Rs. 100000.

DO YOU KNOW?

What is Fiscal Responsibility and BudgetManagement Act?The Fiscal Responsibility and Budget Management(FRBM) Act was enacted by the Parliament in 2003.Its objective is to institutionalise fiscal discipline,reduce fiscal deficit and improve macro economicmanagement. This law aims at promoting fiscalstability for the country on a long-term basis. Itemphasises a transparent fiscal managementsystem and a more equitable distribution of debtsover the years. This law also gives flexibility to theReserve Bank of India to undertake monetarypolicy to control inflation.Government needs resources for funding variouskinds of developmental schemes and routineexpenditures. Resources are raised through taxesand borrowing. The government can raise fundsby borrowing from the Reserve Bank of India,

financial institutions or from the public by floatingbonds. Fiscal deficit is the total expenditure minusthe revenue receipt, loan recoveries and receiptsfrom disinvestment etc. It is a measure of thegovernment borrowing in a year.However, uncontrolled fiscal deficit is consideredharmful for the health of economy. FRBM Act wasnotified in 2004 in response to the need felt to curblarge fiscal deficit. The FRBM rules specify annualreduction targets for fiscal indicators. Originally, theact envisaged revenue deficit to be reduced to nilin five years beginning 2004-05. Fiscal deficit wasrequired to be reduced to 3 percent of GDP by 2008-09. The Act also provides exception to thegovernment in case of natural calamity and fornational security.The implantation of the act was put on hold in2007-08 due to global financial crisis and the need






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for fiscal stimulus. There was a need for increasedgovernment expenditure to create demand to fightoff the financial downturn and hence thegovernment moved away from the path of fiscalconsolidation for this period.This law also prohibits borrowing by governmentfrom the Reserve Bank of India and purchase ofprimary issues of central government securitiesafter 2006. The act asked the Central government tolay in Parliament three statements in one financialyear about the fiscal policy. To enforce fiscaldiscipline at the state level, the Twelfth financecommission provided for incentives to statesthrough conditional debt restructuring and interestrate relief.In 2012, the FRBM was amended and it wasdecided that the FRBM would target effectiverevenue deficit in place of revenue deficit. Effectiverevenue deficit excludes capital expenditure fromrevenue deficit and thus gives space to thegovernment to spend on creation of capital assets.The critics of this law feel, it would curb thegovernment’s social sector spending but there is nodenying the fact that the need for fiscalsustainability cannot be ignored.What is GST?The Goods & Services Tax (GST) is an indirect taxreform measure which will replace all other indirecttaxes such as Central Sales Tax, Octroi, excise duty,Service Tax and Value Added Tax (VAT) at thecentral and state levels. India will have a ‘dual GST’system where states and the centre both wouldhave power to levy taxes on goods and services.Exports would be an exception and GST will not beimposed on them. Under the GST, no distinction ismade between goods and services for purpose oflevying tax. GST is a value added tax where theperson paying tax on his output is also entitled toget input tax credit on the tax paid on its inputs.The idea of GST was first proposed in the budgetspeech of 2006-07 which had set out the deadlineof 2010 for its introduction in the country. Toimplement such a tax regime a constitutional

amendment would be needed as the Centre as wellthe States are involved in this issue. Thegovernment expects that the legislative process forthe enactment of the GST would be started in thenext few months. The Finance Minister hasexpressed the hope that the two tax reforms - theGST and Direct Tax Code (DTC) will beimplemented soon.The objective of GST is to make the taxation simpleand to broaden the tax base. It will also help createa common market throughout the length andbreadth of the country. The GST has the advantageof redistributing the burden of taxation equitablybetween manufacturing and services. The rate oftaxation is also likely to come down with theintroduction of GST. Goods of basic importance willhave lower tax rates. Better compliance andincreased tax collection will boost the tax to GDPratio. Economic growth is also likely to get animpetus through GST. A report of National Councilof Applied Economic Research has estimated anincrease of 0.9 percent to 1.7 percent in theeconomic growth with the implementation of GST.Exports is will also increase according to this study.

⇒ BUDGET 2013–14 AND BEYOND:WHAT IT MEANS FOR FISCAL CONSOLIDATION?

It May not be an exaggeration to say thatBudget 2013-14 has been crafted in most challengingmacroeconomic circumstances reflected in high fiscalimbalance, declining GDP growth, high inflation,increasing current account deficit (CAD) and anuncertain global economic environment. Rising crudeprices in the international market and increasing goldimport as an instrument of asset holding increasedthe CAD and thereby external sector imbalance.These external shocks further compounded theproblem of macro instability in presence of high fiscaldeficit and stubbornly high inflation. There is nodoubt that the budget 2013-14, squarely focused onfiscal consolidation. The idea is that fiscalconsolidation would revive growth and if growthpicks up that would help correct other macroimbalances and challenges of development throughhigher growth of public revenues. Thus, thequestion is would growth pick up in the short run due




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to measures of fiscal consolidation proposed in thebudget? Lot would depend upon host ofmacroeconomic factors; both on the fiscal andmonetary side, including critical reforms like GST.

High fiscal deficit of the central government isnot a new phenomenon. It remained at anuncomfortably high level since 2008-09. Alternativeestimates before the budget suggested that the fiscaldeficit will be close to 6 per cent of GDP in 2012-13(RE). However, the budget 2013-14 (BE) pegged thefiscal deficit at 4.8 per cent of GDP and as per the2012-13 (RE), it is expected to be 5.2 per cent of GDP.The biggest challenge would be to maintain thesetargets as the fiscal year progresses. Although,achieving these targets assume priority, we need torecognise the fact that path of fiscal adjustment isequally important as the target.

Before we comment on the path of fiscaladjustment, it may be worthwhile to see the nature of

fiscal imbalance of the central government. Asevident from the fiscal deficit is driven by revenuedeficit. In the year 2011-12, the share of revenuedeficit in fiscal deficit was 76.43 per cent. But theBudget 2013-14 (BE) expects it to be at 70 per cent. Inother words, major share of the borrowed resourcesare being used to finance the revenue expenditure ofthe centre which is by and large in nature of currentconsumption. Although, this sounds quite alarming,the effective revenue deficit (ERD), which is thecomponent of revenue deficit when adjusted forgrants given for creation of capital assets, for the year2013-14 (BE) estimated at 1.8 per cent of GDP. Thepractice of estimating ERD is a recent introduction inour budget. The significance of the concept of ERDwould depend on the nature of use of the grantsgiven for capital assets. If funds used remains bynature of consumption, depending on ERD as ameasure of fiscal prudence would be misleading.

NEW MEASURES FOR WELFARE OF SC/ST, WOMEN AND MINORITIES

Sharing the concerns of the Members of the House for the welfare of the scheduled castes and thescheduled tribes, the Finance Minister P. Chidambaram announced that the Budget has sub plans forthem and reiterated that the funds allocated to the sub plans cannot be diverted and must be spent forthe purpose of the sub plans. He made an allocation of Rs. 41, 561 crore to the scheduled castes sub planand Rs. 24,598 crore to the tribal sub plan. Similarly, sufficient allocations have been made toprogrammes relating to women and children. The Minister informed the Members that the gender budgethas Rs. 97,134 crore and the child budget Rs. 77, 236 crore in 2013-14.He said, women belonging to the most vulnerable groups, including single women and widows, must beable to live with self-esteem and dignity and added that young women face gender discriminationeverywhere, especially at the work place. Ministry of Women and Child Development has been asked todesign schemes that will address these concerns and a sum of Rs. 200 crore has been provided to beginwork in this regard.The Finance Minister allocated Rs. 3,511 crore to the Ministry of Minority Affairs, which is an increaseof 12 percent over the BE and 60 percent over the RE of 2012-13. The Maulana Azad EducationFoundation is the main vehicle to implement education schemes and channelized funds to non-governmentorganisations for the minorities. Its corpus stands at Rs. 750 crore. With the objective of raising it to Rs.1500 crore during the 12th Plan period, the Minister proposed to allocate Rs. 160 crore to the corpusfund. The foundation wishes to add medical aid to its objectives and the same has been accepted that abeginning can be made by providing medical facilities such as a resident doctor in the educationalinstitutions run or funded by the Foundation. Rs. 100 crore is being allocated to launch this initiative.He said, government is committed to provide support to persons with disabilities and announced a sumof Rs. 11 0 crore to the Department of Disability Affairs for the ADIP Scheme in 2013-14.




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⇒ BUDGET: CONCEPTS AND TERMINOLOGIES

Budget of a government is a comprehensivestatement of government finances relating to aparticular year. Every Budget broadly consists of twoparts- (i) Expenditure Budget and (ii) ReceiptsBudget.

The amounts of intended expenditure by theGovernment in the next financial year are expressedin the Expenditure Budget.

The entire Expenditure Budget can be dividedinto two distinct categories, viz.

(i) Capital Expenditure- those expenditures bythe government that lead to an increase inthe assets or a reduction in the liabilities ofthe government. It is however not necessarythat the assets created should be productiveor they should even be revenue generating.Only the charges towards the constructionof the asset are counted as Capitalexpenditure, while the subsequent chargesfor its maintenance are considered asRevenue expenditure. Most capitalexpenditure is non-recurring.

• Examples of Capital Expenditure causing‘increase in assets: construction of anew Flyover, Union Govt. giving a Loanto a State Govt.

• Examples of Capital Expenditurecausing ‘reduction of a liability’: UnionGovt. repays the principal amount of aloan it had taken in the past.

(ii) Revenue Expenditure- those expenditures bythe government that do not affect its asset-liability position. Most kinds of revenueexpenditures are seen as recurringexpenditures. The entire amount of Grantsgiven by the Union Government to States isreported in the Union Budget as RevenueExpenditure, even though a part of thoseGrants get utilized by States for buildingSchools, Hospitals etc. This is so becausethe ownership of the schools or hospitalsbuilt from the Central grants would not bewith the Union Government.

• Examples of Revenue Expenditure are:expenditure on Food Subsidy, Salary of

staff, procurement of medicines,procurement of text books, payment ofinterest, etc

Total government expenditure can also bedivided into another set of categories, viz.

(i) Plan Expenditure: Plan expenditure refers togovernment expenditure, which is meant forfinancing the programmes/schemesformulated under the ongoing/previous FiveYear Plan

(ii) Non-Plan Expenditure: Expenditures of thegovernment, which are not included underthe Plan Expenditure are called Non PlanExpenditure. It includes some of theimportant types of government expenditure,eg: interest payments, pension, defenceexpenditure, spending on law and order,spending on legislature, subsidies, andsalary of regular cadre teachers, doctors andother government officials.

The Receipts Budget presents the informationon how much the Government intends to collect asits financial resources for meeting its expenditurerequirements and from which sources, in the nextfiscal year. This can also be divided into twocategories:

(i) Capital Receipts- those receipts that lead toa reduction in the assets or an increase inthe liabilities of the government.

• Capital Receipts that lead to a‘reduction in assets’: Recoveries ofLoans given by the government andEarnings from Disinvestment;

• Capital Receipts that lead to an‘increase in liabilities’: Debt.

(ii) Revenue Receipts- those receipts that don’taffect the asset-liability position of thegovernment. Revenue Receipts compriseproceeds of Taxes (like, Income Tax,Corporation Tax, Customs, Excise, ServiceTax, etc.) and Non-tax revenue of thegovernment (like, Interest receipts, Fees/User Charges, and Dividend & Profits fromPSUs).

Government revenue through taxation can bedivided into Direct Taxes and Indirect Taxes.

Direct Taxes: Those taxes for which the tax-




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burden cannot be shifted are called Direct Taxes.Examples of Direct Taxes are:

(i) Corporation Tax: This is a tax levied on theincome of registered companies in thecountry, whether national or foreign, underthe Income Tax Act, 1961.

(ii) Personal Income tax: This is a tax on theincome of individuals, firms etc. other thanCompanies, under the Income Tax Act, 1961.This head also includes other Taxes, mainlythe ‘Securities Transaction Tax’, which islevied on transaction in listed securitiesundertaken on stock exchanges and in unitsof mutual funds.

(iii) Wealth Tax: This is a tax levied on thebenefits derived from the ownership ofproperty, under the Wealth Tax Act, 1957.Wealth tax has virtually been abolished inIndia.

Indirect Taxes: Those taxes for which the tax-burden can be shifted are called Indirect Taxes. Anyperson, who directly pays this kind of a tax to theGovernment, need not bear the burden of thatparticular tax; he/she can ultimately shift the tax-burden to other persons later through businesstransactions of goods/ services. Indirect tax on anygood or service affects the rich and the poor alike!Unlike indirect taxes, direct taxes are linked to thetax-payee’s ability to pay and hence are consideredto be progressive. Examples of Indirect Taxes are:

(i) Customs Duties: In this, the taxablecomponent is import into or export from thecountry.

(ii) Excise Duties: It is a type of tax levied onthose goods, which are manufactured in thecountry and are meant for domesticconsumption. It is a tax on manufacturing,which is paid by the manufacturer, but hepasses this burden on to the consumers.

(iii) Sales Tax: It is levied on the sale of acommodity, which is produced imported andbeing sold for the first time. If the “Productis sold subsequently without beingprocessed further, it is exempt from sales tax.Before the introduction of VAT, sales taxused to be levied under the authority of both

Central Legislation (Central Sales Tax) andState Government’s Legislation (Sales Tax)

(iv) Service Tax: It is a tax levied on servicesprovided by a person and the responsibilityof payment of the tax is cast on the serviceprovider. However this tax can be recoveredby the service provider from the servicereceiver in course of his/her businesstransactions.

(v) Value Added Tax (VAT): VAT is a multi-stagetax, intended to tax every stage of sale of agood where some value has been added tothe raw materials; but taxpayers do receivecredit for tax already paid on the raw materialsin earlier stages.

Debt and DeficitA Debt is a kind of receipt that necessarily

leads to an increase of the government’s liabilities.The government incurs a Debt only for meeting thegap created by excess of its expenditure over itsreceipts for that year, which is called Deficit.Fiscal Deficit

It is the gap between the government’s totalExpenditure (including loans net of repayments) andits Total Receipts (excluding new debt to be taken).Thus Fiscal Deficit for a year indicates the borrowingto be made by the government that year.Revenue Deficit

The gap between Total Revenue Expenditureof the Government and its Total Revenue Receipts iscalled the Revenue DeficitDistribution of financial resourcesbetween the Centre and the States

A Finance Commission is set up every fiveyears to recommend measures for sharing 0 resourcesbetween the Centre and the States, mainly pertainingto the Tax Revenue collected by the CentralGovernment. Presently the recommendations madeby the 13th Finance Commission are in effect (from2010-11 to 2014-15), whereby 32 percent of theshareable divisible pool of Central tax revenue istransferred to States every year and the Centreretains the remaining amount for the Union Budget.




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Tax-GDP RatioGross Domestic Product CGDP) is an indicator

of the size of a country’s economy. In order toassess the extent of government’s policyinterventions in the economy, some of the importantfiscal parameters, like, total expenditure by thegovernment, tax revenue, deficit etc. are expressed asa proportion of the GDP. Accordingly, a country’s tax-GDP ratio helps us understand how much taxrevenue is being collected by the government ascompared to the overall size of the economy. A highertax to GDP ratio in a country is a positive signmeaning that the government is collecting a decentamount of tax revenue as compared to the size of itseconomy.

⇒ A POWER SECTOR REVIEW OF BUDGET

A Power Sector has to play a key role in thecountry’s quest for economic growth and a majorfocus on providing power to all. Indian Power sectorhas been facing major set of challenges since lastyear with shortage of fuel and lack of distributionreform. The coal availability has emerged as one ofthe biggest problems in power sector as can beunderstood through the fact that there was a 11.6Billion Units shortfall in power generation during2011-12 due to shortage of coal (Central ElectricityAuthority). Gas availability for Indian power sector isalso very low.

Therefore, no new projects on gas basedgeneration will be possible before 20 15-16 (as thereis a possibility of coming of LNG terminal in westerncoast only by 2015-16). From the present shortage offuel, it is very much evident that the country isdependent on more and more of fuel imports. Thusmoving towards more imports of coal and gas in linewith oil imports, is a major cause for concern as thiswill further add up to the problem of current accountdeficit. The fuel shortage problems of power sectorneeds a long term strategy and therefore would takesome time to put the sector back on track. FinanceMinister, in his budget (2013-14) proposal for powersector has suggested that we must reduce ourdependence on coal imports.

The major announcements for power sector inthe budget are as follows:—

• Financial restructuring of the DISCOMS torestore the health of the power sector andstates are advised to quickly to prepare thefinancial restructuring plans, ‘sign MOU’sand take advantage of the scheme

• Cabinet Committee on Investment (CCI) tobe consulted in taking up decisions in oil/power/coal projects

• Rs. 800 crores allocated for Ministry of Newand Renewable Energy, so Wind PowerSector heaves a sigh of relief

• Tax holiday for power plants extended forone more year up to March, 2014

• Wind energy sector to get generation basedincentives

• To encourage states to take up waste toenergy (WTE) projects via PPP mode

• Rs. 5280 crores allocated to Department ofEnergy

• Current Account Deficit still high - one ofthe main reasons is high import of coal

• Coal import in April-December, 2012 at 100million tonnes, to rise to 185 million tonnesin 2013-14

• For increasing coal supply, PPP projectsalong with Coal India has been announced

• Oil and Gas policy to be announced• The recent buzz word in USA is Shale Gas

for future energy needs. So it is a welcomemove that Govt. of India will announce ShaleGas policy soon

• Oil and Gas blocks under NationalExploration Licensing Policy (NELP) to becleared this year

• Natural Gas Pricing Policy to be reviewed -to benefit the gas companies

• Five LNG terminals Dabhol in Ratnagiridistrict of Maharastra will be operational in2013-14

• Rate of Withholding tax on interest paymentson ECB is proposed to be reduced from 20 to5 percent which will benefit power sector also

• Duties have been equalized on steam andbituminous coal used for generation. Nowboth would attract 2 percent customs and 2percent countervailing duty (CVD).




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This customs duty and CVD will push up thecoal prices and generation costs and widen the pricedifferential with domestic coal fired power.

Extension of the sunset clause for availing tenyear tax holiday for a year would benefitapproximately 20 Giga Watts of capacities to becommissioned in 2013-14. The extension would drivepromoters to complete ongoing projects quickly andthis may attract fresh investment. Funding will alsoimprove with the issuance of tax-free bonds of Rs.50,000 crores and credit enhancement through IIFCL.

The proposal to adopt a PPP framework forcoal production will improve domestic supply of coalin the long term. Custom duty on imported coal,which was previously exempt, has been increased totwo percent while countervailing duty has also beenraised to two percent. Further the Railway budgethiked freight rates by 5.8 percent. Consequently,generation costs will increase per unit for coal- basedprojects.

Introduction of 2 percent customs duty and 2percent CVD will have an impact on the price ofimported coal and on the cost of power generationand is expected to increase the tariff. The upshot isthat around 60 to 70 percent coal imported earlier forthermal power plants was exempt from any customsduty. Now this category of coal will see a rise in costsof imports and resulting rise in cost of generation.

Changes in duties on coal, railway tariffs andother costs will raise generation cost by 20 paise perunit and much higher in states where power utilitiesare making losses. The hike would be steepest whereutilities are reeling under losses. Moreover the stateswhich will be adopting financial restructuring packageburdened with heavy losses, have to announce tariffhike as one of the conditions for restructuring.

For the first time budget has made provisionfor waste- to- energy (WTE) projects via PPP mode.This will be supported through different instrumentslike viability gap funding (VGF), repayable grant andlow cost capital. A debate has star ted on thesuitability of such projects as environmentalists areof the opinion that these projects and technologiesare not suitable for India. Though Municipal bodiessay it is the most effective way to manage waste andthis may encourage private players as there is

provision for VGP. Delhi has such plant of 16 MWcapacity at Okhla and other two projects will beoperational at Gazipur and Narela -Bawana by thisyear end. WTE projects are the only way to disposewaste in the metro cities.

As per the budget estimate, coal importsduring the period April-December, 2012 have crossed100 million tones. It is estimated that import will riseto 185 million tonnes in 2016-17. If the coalrequirements of the existing power plants and thepower plants that will come into operation by31.03.2015 are taken into account, there is noalternative except to import coal and adopt a policyof blending and pooled pricing. Finance Minister hassuggested that in the medium and long term, we mustreduce our dependence on coal imports. This can beachieved through devising a PPP policy frameworkwith Coal India Limited (CIL) in order to increase theproduction of coal for supply to power producers.These matters are under active consideration andMinister of Coal will announce Government’s policiesin due course.

There was a mis- classification between steamand bituminous coal as both are used in thermalpower plants. The steam coal was exempt fromcustoms duty but attracts a CVD of one percent.Bituminous coal attracted a duty of 5 percent and aCVD of 6 percent. The budget proposed to equalizethe duties on both kinds of coal and levy 2 percentcustoms duty and 2 percent CVD to avoid these mis-classification.

Since there is change in coal pricing policies ofdifferent countries mainly Indonesia and Australia,the Indian import price of coal has increased. All thepower producing companies who have signed a longterm power purchase agreements with variousutilities, now want revision of price due to this changein imported coal price. But no clear policy has beendeclared as yet by Central or State Govt. in thisregard.

So power plants based on imported coal areoperating at under capacity. Now Indian powerproducers are looking for imported coal frompolitically stabilsed south East African countries likeMozambique and Botswana other than South Africaas new source.




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⇒ AGRICULTURE AND BUDGET

Huge Food grains stocks and rising exports ofIndia’s agricultural goods, the Union’ Budgetpresentation for 2013-14 would not have come at abetter time for the sector which employs more thanhalf of country’s working class population.

As Finance Minister P Chidambaram rose topresent the un ion budget for the year 2013-14, therewas lot of expectation from the farming community.Nothing explains the agriculture sector better thanthe Economic Survey 2012-13 presented before theParliament just a day before the union budget wasannounced. The survey observed “Indian agricultureis broadly a story of success. It has done remarkablywell in terms of output growth, despite weather andprice shocks in the past few years”.

The Eleventh Five Year Plan (2007-12)agricultural and allied sector witnessed an averageannual growth of 3.6 percent in the gross domesticproduct (GDP) against a target of 4.0 percent. Whileit may appear that the performance of the agricultureand allied sector has fallen short of the target,production has improved remarkably, growing twiceas fast as population. “India’s agricultural exportsare booming at a time when many other leadingproducers are experiencing difficulties,” the surveywhich is an annual report card of government’sperformance noted.

At a nutshell, India is the first in the world interms of production of milk, pulses, jute and jute-likefibres, second in rice, wheat, sugarcane, groundnut,vegetables, fruits and cotton production, and is akey producer of spices and plantation crops as wellas livestock, fisheries and poultry sector.

Prior to announcing the budget measures,Chidambaram said, “thanks to our hard workingfarmers, agriculture continues to perform very well.The average annual growth rate of agriculture andallied sector during the 11th Plan was 3.6 percent asagainst 2.5 percent and 2.4 percent, respectively, inthe 9th and 10th Plans”.

He noted in 2012-13, total foodgrainproduction will be over 250 million tonnes. “Minimumsupport price of every agricultural produce under theprocurement programme has been increasedsignificantly. Farmers have responded to the price

signals and produced more. Agricultural exports fromApril to December, 2012 have crossed Rs 138,403crore,” Chidambaram noted. Though governmentconstantly focuses on increasing exports ofmanufactured goods and services, according to arecent paper written by the Commission forAgricultural Costs and Prices (CACP) chief AshokGulati and others, its off-on policy on agriculturalexports is preventing the country for achieving itspotential.

“If the government is proactive, FY’12 exportscan cross $42- 43 billion”, Gulati says. In 2011-12,according to Gulati, agricultural exports by India weremore than $37 billion against an import ofcommodities worth around $17 billion. India hasemerged as the world’s largest exporter of rice,replacing Thailand and Vietnam and the country hasalso the biggest exporter of buffalo meat beatingtraditionally strong countries such as Brazil, Australiaand the US.

CACP research paper titled ‘Farm trade:Tapping the hidden potential’ has stated thatagricultural exports have increased more than 10 foldfrom $3.5 billion in 1990-91 to $37.1 billion in 2011-12.“This share is more than the share that India has inglobal merchandise exports,” the paper has noted.

The agriculture sector which employs morethan 55% of the country workforce stands at a crossroads. Measures taken by the government duringnext few years would decide the shape theagriculture sector would take. As the latest Economicsurvey points out that “India is at a juncture wherefurther reforms are urgently required to achievegreater efficiency and productivity in agriculture forsustaining growth. There is need to have stable andconsistent policies where markets playa deservingrole and private investment in infrastructure isstepped up. An efficient supply chain that firmlyestablishes the linkage between retail demand andthe farmer will be important”.

The survey also points out that rationalizationof agricultural incentives and strengthening of foodprice management will also help, together with apredictable trade policy for agriculture. Theseinitiatives need to be coupled with skill developmentand better research and development in this sector




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along with improved delivery of credit, seeds, riskmanagement tools, -and other inputs ensuringsustainable and climate-resilient agriculturalpractices. One of the key proposal announced byFinance Minister P Chidambaram in his budgetspeech includes close to 22% jump in the agriculturecredit target for the next fiscal besides grantingsimilar hike in allocation for the agriculture ministry.

“Agricultural credit is a driver of agriculturalproduction. We will exceed the target of Rs 5,75,000crore fixed for 2012-13. For 2013-14, I propose toincrease the target to Rs 7,00,000 crore,”Chidambaram said while presenting the Budget forthe 2013-14.

The finance minister also announcedcontinuance of the interest-subvention for short-term crop loan. Farmers who repay loan on time willbe able to get credit at 4% interest per annum. Healso announced extension of crop loan scheme toprivate sector banks along with the loan extendedby public sector banks, Regional Rural Banks andcooperative banks.

“So far, the scheme has been applied to loansextended by public sector banks, Regional RuralBanks and cooperative banks, I propose to extendthe scheme to crop loans borrowed from privatesector banks and scheduled commercial banks inrespect to loans given within the service area of thebranch concerned,” Chidambaram announced.

Similarly, another thrust of the financeminister’s budget proposal was 22% increase infinancial grant for the agriculture ministry to Rs27,049 crore for the next fiscal in comparison to lastyear. The hike in allocation also includes Rs 3,415crore earmarked for agricultural research.

Another key proposal announced by thefinance minister include a Rs 1000 crore allocationunder the Bringing Green Revolution in the EasternIndia (BGREI) for the next fiscal. For augmenting riceproduction in states including Assam, Odisha,Jharkhand and West Bengal, the government hadallocated Rs 400 crore in 2011-12 and Rs 1000 croreduring the current fiscal. “The original GreenRevolution States face the problem of stagnatingyields and over-exploitation of water resources. Theanswer lies in crop diversification.

⇒ GENDER ISSUES: BUDGET PROPOSALS

The Union Budget 2013-14 is realistic, woman-centric, shorn of fanfare and attuned to the harshglobal and domestic economic realities. Thebackdrop remains challenging - hesitant globalgrowth, persisting problems in the Euro zone, high oilprices, high domestic inflation, current account andfiscal imbalances and a sharp slowdown in theindustrial sector.

There are no dramatic initiatives. Rather, it isabout staying the course. There are no overt negativeor regressive measures. The budget strikes the rightbalance between the often conflicting demands offiscal rectitude, inflation, growth and inclusion. TheFinance Minister has sent the right signals asregards the future course of reforms. He has alsounequivocally articulated his commitment torestoring trust and confidence among entrepreneursand investors and reducing the obstacles to doingbusiness in India. At a time when businessconfidence needs to be revived, this is indeedreassuring.

The woman-centric budget, presented byUnion Finance Minister, P. Chidambaram in the LokSabha gave enough reasons for Indian woman tosmile. The gender budget has Rs. 97,134 crore and thechild budget has Rs. 77,236 crore in 2013-14.

As a huge step towards empowerment ofwomen, the government proposed to set up thecountry’s first women’s bank as a public sector bank.The Finance Minister will provide 1,000 crore asinitial capital. He hopes to obtain the necessaryapprovals and the banking licence by October 2013.

Mr. Chidambaram said women were at the headof many banks today, including two public sectorbanks, but there was no bank that exclusively servedwomen. The Budget 2013-14 has provided for settingup a bank that lends mostly to women and women-run businesses, that supports women Self HelpGroups and women’s livelihood, that employspredominantly women, and that addresses genderrelated aspects of empowerment and financialinclusion.

Research has shown that women, speciallyrural women, were not confident of making financialdecisions. They would feel more confident if they




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could walk into a bank where people would listen andempathise with them. The PSU bank will be goodbecause it will help women make their own decisions.Research says women are more comfortable withwomen managers or advisors. Also, a bank run bywomen means they can go there without a malemember of the family.

Of the three big promises made by Mr.Chidambaram in his budget proposals for 2013-14, thefirst was the “collective responsibility to ensure thesafety and dignity of women.” Towards this end, thegovernment announced a proposal to set up aNIRBHAYA FUND with an allocation of Rs. 1,000crore. Union Women and Child DevelopmentMinister and other Ministers concerned will work outthe details of all structure, scope and application ofthe Fund.

Referring to the horrific case of gang rape andmurder of a young woman in the National Capital inDecember, Mr. Chidambaram said recent incidentshad cast a long dark shadow on our liberal andprogressive credentials.

“As more women enter public spaces - foreducation or work or access to services or leisure -there are more reports of violence against them. Westand in solidarity with our girl children and women.And we pledge to do everything possible toempower them and to keep them safe and secure,” theFinance Minister said, adding that a number ofinitiatives were under way and many more would betaken by government as well as non-governmentorganisations.

Saying these deserved government support,Mr. Chidambaram announced the NIRBHAYAFUND, named after the gang rape victim.

Pointing out that women belonging to themost vulnerable groups, including single womenand widows, must be able to live with self-esteemand dignity, the Minister said young women facedgender discrimination everywhere, especially at thework place. The Ministry of Women and ChildDevelopment has been asked to design schemes thatwi11 address these concerns. “I propose to providean additional sum of Rs. 200 crore to the Ministry tobegin work in this regard,” he said.

Another small proposal in the gender budgetis that it has raised the maximum amount of jewellery

that may be brought home by Indian women whohave lived abroad for more than a year or who arechanging residence from Rs. 20,000 to Rs. 1,00,000

A scheme for maternal and child malnutritionfor the 100 poorest districts with an allocation of Rs.300 crores is also envisaged. The budget hassubstantially increased allocations to schemes thatallow for direct cash transfers to women and youngIndians. The Indira Gandhi Matritva Sahyog Yojana(IGMSY) that envisages providing cash assistancedirectly to pregnant and lactating women has seenits budget allocation for the coming year going up toalmost five times the Revised Estimate for the currentyear.

The 2013-14 budget is, in fact, a good one,aiming to improve the economy with strong focus oninfrastructure and rural development and with stresson women, youth and the poor, who constitute amajority of the population.

⇒ PROCEDURES FOR

FOREIGN PORTFOLIO INVESTORS SIMPLIFIED

Terming the Indian markets as amongst the bestregulated the Finance Minister announced severalmeasures to strengthen the capital market regulatorSEBI on the eve of its Silver Jubilee. TheDepository Participants authorized by SEBI willnow register different classes of portfolio investorssubject to compliance with KYC guidelines doingaway with different procedures and avenues formany categories. SEBI will simplify the procedurefor the Foreign Portfolio Investors and prescribeuniform registration and other norms byconverging the different KYC norms. In order toremove the ambiguity between FDI and FII inaccordance with international practices, aninvestor with a stake of 10% or less will be treatedas FH whereas the one with more than 10% stakewill be treated as FDT. The FIIs will also bepermitted to participate in exchange tradedCurrency Derivatives segments to the extent oftheir Indian rupee exposure in India. FIls will alsobe permitted to use their investments in CorporateBonds and Government Securities as collateral tomeet their margin requirements.






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Angel investors provide both experience andcapital to new ventures. SEBI will prescriberequirements for angel investor pools by whichthey can be recognized as category I venturefunds. With the objective of developing the debtmarket, stock exchanges will be allowed tointroduce a debt segment on the exchange whereinbanks and primary dealers will be trading membersalongwith insurance companies, provident fundsand pension funds. The list of eligible securities inwhich Pension Funds and Provident Funds mayinvest will be enlarged to include exchange tradedfunds, debt mutual funds and asset backedsecurities.

HIGHLIGHTS OF THE ECONOMICSURVEY 2012-13

• Economic growth pegged at 6.1-6.7 percentin 2013-14

• March 2013 inflation estimated at 6.2-6.6 percent

• Priority will be to rein in high inflation• FDI in retail to pave the way for investment

in new technology and marketing ofagriculture produce

• Survey calls for widening of tax base andprioritising expenditure to bridge fiscal deficit

• Calls for curbing gold imports to containcurrent account deficit

• Aadhaar-based direct cash transfer schemecan help plug leakages in subsidies

• With subsidies bill increasing, danger ofmissing fiscal targets is real in FY13

• Survey pitches for hike in prices of dieseland LPG to cut subsidy burden.

• Foreign Exchange reserves remains steadyat $295.6 billion at December,2012-end

• At present, overall energy deficit is about8.6 percent and peak shortage of power isabout 9 per cent.

• Infrastructure bottlenecks affectingindustrial sector performance

• Prospects for world trade as well as of Indiaare still uncertain.

• Pitches for further opening of sectors for FDI

⇒ PUBLIC PRIVATE PARTNERSHIP (PPPS):ANALYSING THE FACTORS BEHIND THEIR GROWTH

The Term Public Private Partnership’ or ‘PPP’has become a buzzword of late in the policy circles,and is being increasingly resorted to as a preferredmedium for provisioning of public services bothwithin the industrialised and low-income countries.While the PPPs are more commonly found in thetransport infrastructure sector, such as roads,airports, and ports (primarily due to the commercialpricing models), they are also invoked in watersupply and sanitation, tourism, education, health,and other social sector programmes, albeit to a lesserdegree. A significant difference is however observedin the nature of PPPs across these sectors. In manycases they appear to be glorified forms of servicelevel agreements rather than ‘partnerships’ as aredefined in the normative literature on PPPs.

Engagement with the private sector forprovisioning of infrastructure facilities has becomeincreasingly popular in the past few decades. Indiatoo has joined the bandwagon of countries adoptingPPPs for delivery of services under variousinfrastructure sectors. It is claimed that India has themaximum number of projects within PPP in thetransport sector. Its experience in highways andexpressways has been substantial. All nationalhighways in the present phase of NHDP (NationalHighways Development Programme) are beingimplemented within PPP mode. Recently, theempowered Group of Ministers on infrastructure hasdecided that 95% of road projects in the current yearwill be through PPP.

Several airports are being built with privatesector participation, while some metro-rail projects,such as the Hyderabad metro, are also opting for thisapproach rather than the traditional way of publicsector delivery. According to the Economic Survey2010-2011, against a target of 30% of private sectorparticipation in infrastructure sector, the achievedfigure was 34%. An investment of USD 1 trillion hasbeen envisaged for infrastructure during the 12thPlan: of this USD 500 billion is expected to becontributed by the private sector. These figuresdemonstrate the primacy given to private sectorparticipation at the policy level.




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Against this background, this article attemptsto provide theoretical insights into the concept ofPPP, and analyses the reasons for its growth andacceptance as a mode of service delivery in manycountries.Growth of PPPs

There have been instances of the Stateengaging with the private sector towardsprovisioning of public services throughout theknown history the case of Mathew private tax-collector from the Bible; public street lamps in 18thcentury England were cleaned by private contractors;the rail companies of 19th century England and the USwere privately owned; 82% of Sir Frances Drakes fleetof 197 vessels, which conquered the Spanish armada,were owned by contractors. Toll roads and tollbridges, privately owned and operated, has beenaround since antiquity. Toll roads carry mention inwritings of the Greek historian and philosopherStrabo (63 BC-AD 21) in Geographia during the timeof Caesar Augustus, where he records existence oftolls on the Little Saint Barnard Pass. Historicaldevelopment of PPPs in infrastructure had itsbeginning in Europe in the demand for mass traveland long distance commerce in second half of 17th

century. France pioneered the concession type modelin 17th century which was extensively used in the19th century to finance and develop publicinfrastructure.

However, Public Private Partnerships as areknown in their current form started in theOrganisation for Economic Co-operation andDevelopment (OECD) countries and the USA. Thesegradually spread to the low-income countries.Reliance on PPPs as a preferred mode of servicedelivery rose to significant proportions during the1990s, peaking around 1997. Governments underPresidents Carter and Reagan in the USA andMargaret Thatcher in UK promoted wide range ofpartnerships at all levels of the State. Among all thecountries adopting PPPs, UK has had the maximumnumber of projects implemented under the PublicFinance Initiative (PFI) initiated in 1992. PPPs havebeen now included in legislation in many countriessuch as the urban policy legislation of UK and USA,industrial policies of France, and economic

development policies of Italy, Netherlands and UK.While Netherlands Australia, Hungary, Italy, Japan:Korea, Spain and France have had substantialexperience in implementing infrastructure projectsunder PPP, countries like Chile, Brazil, Singapore,India, and Canada are actively exploring this mode ofdelivery of public services. PPPs form the core ofEuropean Union (EU) initiatives for economiccompetitiveness and are the preferred framework fordevelopment of trans-European transportation.Recently the European Commission has advocatedgreater use of PPPs for provisioning of infrastructuralservices and bringing in innovation in servicedelivery.Understanding the Context of PPPs

Different definitions and interpretations havebeen associated with the term Public- PrivatePartnerships. These depend upon the context withinwhich they are initiated and operated. Simply put, theterm PPP traditionally implies engaging with theprivate sector for provisioning of public services andinfrastructure such as roads, airports, ports, healthservices, garbage and waste management. Suchservices have been historically provided by thegovernment through public works agencies.According to some, PPP is a framework for describingall cooperative ventures between the State and thenon-State agencies, both for profit and not-for-profit.Within the limited context of transport infrastructuresector, PPP is defined as a long term collaborativeeffort between the government and private agencies,wherein both pool in their differentiated andspecialised resources for planning, design,construction operation and maintenance ofinfrastructure services. They also share investments,risks, benefits and responsibilities. This feature of thePPP has been argued to form the crux of thepartnership. The facility thus developed eventuallyreverts back to the government after expiry of theconcession period. In India this period ranges from 20to 30 years.

A common misconception about PPPs is thatthey involve the private sector merely for financialpartnering. However, PPPs are more about a serviceprocurement policy rather than a capital assetmanagement policy; they do not do away with public




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investment but merely supplement it. Within a PPPthe private partner is involved in a broader ambit of‘infrastructure investment’ where neither the privatesector nor the government is the only owner.

PPPs are perceived to provide public servicesmore efficiently than what the government couldaccomplish on its own. In the classical literature onpublic administration, there is a distinct dividebetween the roles and responsibilities between theState and the private sector, often termed as ‘themarket’. While some works were to be taken up bythe government agencies due to their social andeconomic mandate, some services were delivered bythe agencies. However, the traditionalconceptualisation of the state being the sole providerof services and goods for public welfare came undersevere strain in the decades since 1970s. In the 1970sand 1980s, as the demand for public infrastructuregrew and governments became increasingly fundstarved, due to deficit financing and populistpressures to hold prices below costs, their capacityto provide sufficient and quality infrastructure wasfound to be inadequate. The public utilities weretherefore largely neglected.

In most of the developing low-incomecountries it was found that public finance forinfrastructure was generally inadequate and full costrecovery of infrastructure charges was becomingmore of an exception than a rule. In addition to poorallocation of funds for development of infrastructure,maintenance got even little, which was assumed to befunded by future budgets which were typicallyinsufficient. Traditional methods also left a number ofrisks with the public sector, regarding the assetownership. This is attributed to its monopoly positionwith no incentive for competition, poor fiscaldiscipline and limited fiscal autonomy to publicbodies and managerial inefficiency which increasesproduction cost. Many governments attempted toimprove performance through corporatisation andperformance contracts which were largelyunsuccessful.

⇒ SOCIAL SECTOR OUTLAYS–AS ASSESSMENT

As Country’s most important resource are itspeople”, Finance Minister P Chidambaram saidquoting Joseph Stiglitz, and through his Budget

speech the finance minister spoke of the need to pay“special attention” to the sections that had been leftbehind. Yet when it came to making good on the talk,the government fell short. Social sector-education,health, sanitation, welfare, rural development-allocations in Budget 2013-14 fails to convinceanyone that the government is seized of theimportance and urgent need to invest in the people.

This year, the total budget outlay for the socialsector, excluding in the non-Plan spending, saw amodest increase in its share of the GDP-from 1.7% in2012-13 revised estimates to 1.9% in 2013-14 budgetestimates. Going by past records, it is likely that totalsocial sector spending will see a downward revisionby the time the 2013-14 revised estimates are workedout.

In its Twelfth Plan document, the governmenthas stated its intention to raise public expenditure to2.5 per cent of GDP by 2017, when the plan periodcomes to a close. Budget 2013-14 appears to do littleto achieve this goal. Spend on health accounts for2.24 percent of the Budget. Extreme underprovisioning for health has somewhat become astandard. Centre’s total expenditure on health as aproportion of GDP has only marginally increased from0.25 percent in 2003-04 to 0.33 percent in 2013-14. Fora country with a vast population, and a high level ofpeople who can be adjudged as poor, such paltryspending on health is a cause of senous concern.

The country’s total expenditure on healthamounts to about 5 per cent of GDP, which would becomparable with other developing countries at thesame level of per capita income. The lion share of thespending on health is borne by private households’out of pocket expenditure, roughly between 70 to 80per cent of total expenditure on health care. The lowlevel of public spending means that a large part of theexpenditure on health is borne by households fromtheir private resources—income and savings. This isaffects the poor most adversely. The low spend onhealth has serious repercussions. A study in Indianpoverty by Anirudh Krishna of Duke Universityfound that rural expenditure on health is the primaryreason for families decline into poverty. The inabilityto spend on health and the debts incurred for it arefactors that push families into poverty.




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The low level of funds for public health is anindicator for another pillar of the government’s“sustainable and sustained” growth aim.Environment is a key public health concern. The lackof investment in public health rollout whether it isthrough key programmes or health infrastructure willalso hinder the need for greater environmentalaccountability from the people. Unlike last year therehas been no windfall for sanitation, this would furtherhamper efforts to improve public health.

Many will argue that social sector’s demandfor higher allocations is something of a fetish. It willbe argued that budgetary allocation for the socialsector increased from Rs 39,123 crore in 2004-05 to Rs2,13,689 crore in 2013-14. And that public spending(both centre and state) in the social sector increasedfrom 5.3 per cent of GOP in 2004-05 to 6.7 percent in2011-12, and is around 7 percent of GOP in 2013-14.While that might appear impressive, the fact is thatbetween 2001 and 2011, India added as many as 1.81crore persons to its population, and this number islikely to have gone up the last few years. Anotherfact that needs to be kept in mind is that thisspending of Rs 2,13,689 crore accounts forexpenditure on education, youth affairs and sports,art& culture, health & family welfare, water supplyand sanitation, housing and urban development,information and broadcasting, welfare of scheduledcastes, scheduled tribes, and other backward classes,labour and labour welfare, social welfare and nutrition,women and child development and other socialservices.

India’s spending on social sector, given themagnitude of the need, has been consistently low.After adjusting for inflation and taking into accountexisting deficiencies in the social sector, it becomesclear that budgetary allocations for key areas such aseducation, health, sanitation, nutrition, ruraldevelopment has not gone up over the last few years.The average social sector spending in developedcountries is to the tune of 14% of GDP.

In budget 2013-14, the two key developmentindicators-education and health-did not fare too well.Total central government allocation for education isat 0.70 percent of the GDP, marginally up from 0.67percent in 2012-13 (revised estimates) and down from0.74 percent in last year’s budget. The spend on

health is a cause for concern-this year the healthbudget increased by only Rs 2,842 crore over lastyear’s budget estimates. Central government spendon health is at 0.33 percent of GDP compared to 0.29percent in 2012-13 revised estimates and down from0.34 percent in the budget estimate for 2012-13. Themarginal increase in allocation is far too small toaddress the large need in the two crucial sectors.

An important issue with direct feedback effecton health-drinking water and sanitation- saw a modesthike of Rs 2,260 crore in budgetary allocations overthe 2012-13 revised estimate of Rs 13,005.3 crore. Theincreased allocation is nowhere what is required-only43.5 percent of the population gets tap water supplyand 53.1 percent of households have no access totoilets and defecate in the open. The health hazard-both in the short and long-term-that this situationpresents is far from being addressed. Given the stateof healthcare, with its overdependence on private outof pocket expenditure by households, the lack ofbasic sanitation presents a serious problem. Not onlydoes it contribute to rural indebtedness, but affectsthe productivity of human capital so central forsustained economic growth.

There has been no move towards the promised6 percent of GDP for education; total public spendingis yet to cross the 3.7 percent mark. According to theEconomic Survey, outlays on education was at 3.31percent of GDP in the 2012-13 budget estimates.Given the downward revision, the outlay is about 3.2percent of GDP. Finance minister P Chidambaramprovided for Rs 27,258 crore for implementing theRight to Education through the Sarva ShikshaAbhiyan. Allocation is up by 6.6 percent over 25,555crore provided last year, which had been revised toRs 23,645 crore. This year’s budgetary allocation isnowhere near the Rs 39,115 crore that ministry forhuman resource development had sought.

The Right to Education makes it compulsoryfor the government to provide education to allchildren between 6 and 14 years. Key standards-classrooms, provisioning of drinking water andtoilets, teachers in accordance to the pupil-teacherratio-set out in the Act have to met by March 31 thisyear. The drastic cut in outlay for the Sarva ShikshaAbhiyan for 2012-13, and the failure to step up




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allocation in 2013-14 will present a problem. Meetingand sustaining these requirements will entail a higheroutlay of funds. Failure to provide adequate funds inthe early years of implementation is likely toendanger the effectiveness of the qualityinterventions that the Right to Education proposes.With more than 70 percent of the populationdependent on government-funded schooling, it isessential to ensure that adequate funds areimplement the Right to Education this year. Thesetwo factors would push up the demand for funds.Not providing the required financial support couldstunt the goal of universalizing elementary educationand affecting the quality of human capital whichwould have deleterious effect on growth.

There has been an increased dependence ofthis elementary education programme on the 2 percentcess levied in 2004-05. The share of cess in financingthe Sarva Shiksha Abhiyan has been going up. For2013-14, the budget estimates set the share of theeducation cess at 60.35 percent or Rs 16,453 crore, ofthe total allocation of Rs 27,258 crore. The increasedshare of the cess in financing elementary educationpresents a concern, as it is not accompanied by acommensurate increase in budgetary support, whichhas been steadily declining. With the expenditure onelementary education not showing signs ofstabilizing, the dependence on the levy to ensure thatthe government can meet its constitutionalcommitment should raise concerns.

This over reliance on the education cess alongwith an increased push for private participationthrough the public-private participation raises animportant question. This could be argued as signs ofwithdrawal by the government from provisioning fora key development indicator. This needs to checked.Outsourcing the provision of education will not help;public funding of education needs to be sustained.Inclusive and sustained growth that the governmentis pushing on paper can only be actualized ifspending in education, a key development indicator,is increased substantially.

Another key area, which requires furtherinvestment, especially in light of the Right toEducation Act, is teacher training. The Act mandatesall teachers need to complete and meet trainingrequirements within five years of the legislation being

force. However, budgetary allocation forstrengthening teacher-training institutes is constantat Rs 450 crore. It needs to be said though in thecurrent year, the ministry was able to utilize only Rs249 crore of the allocated Rs 450. The low level ofspend could explain the finance minister allocation inBudget 2013-14. On the other hand, in the highereducation segment, there has been a substantialincrease in allocation for National Mission onTeachers and Teaching—from Rs5.27 crore in 2012-13to Rs 217 crore in 2013-14. This is a welcome step.Though teachers are a weak and crucial link in theelementary education segment, it would heartening tosee a higher allocation and a roadmap for improvingboth quality and quantity of teachers in the Budget.

Equally worrying is the fact that allocations forseveral schemes that sought to address exclusionhave not risen, effectively meaning lower allocation.Schemes like inclusive education for the disabled,appointment of language teachers, women’s hostelsin polytechnics and vocationalisation of educationhave been affected.

The small but determined beginning has beenmade in the higher education sector—Rs 400 crorehas been allocated for the Rashtriya Uccha ShikshaAbhiyan, a scheme geared at strengthening the stateuniversities and colleges. There has been asignificant scaling up of the funding for the RashtriyaMadhyamik Shiksha abhiyan or the universalisationof secondary schooling—Rs 3,983 crore have beenprovided, a 25.6 percent hike over the revisedestimates for 2012-13.

What makes Budget 2013-14 unsettling for theeducation sector is that it fails to address criticalconcerns of inadequate outlays in the elementaryschool segment, unclear prioritization of sectors,under utilization of funds in certain cases, and theapparent withdrawal of the government. These areissues that the government needs to address andprovide some clarity. The picture is dismal when itcomes to provisioning for the health sector. Thecombined, centre and states, public spend remainedat around 1 percent of GDP in 2012-13. India’s publicprovisioning for health falls far behind that of othercountries in the neighbourhood like China and SriLanka. In China, healthcare accounted for 10.3




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percent of total public spending in 2009, and spendon health was at 2.3 percent of GDP.

In2012-13, then finance minister PranabMukherjee announced the launch of the NationalUrban Health Mission to encompass the primaryhealth care needs of people in the urban areas, but noallocation was made. This year the government hasmoved towards universalisation of healthcare—PChidambaram has allocated Rs 21,239 crore for thenew health mission, which merges the existingNational Rural Health Mission with the NationalUrban Health Mission. Despite the expansion inbeneficiaries, the share of the mission in the totalbudget shows a decline; the National Rural HealthMission had an allocation of Rs 20,822 crore in2012-13.

The budget has allocated Rs 4,727 crore formedical education, training and research and Rs 150crore for the National Programme for the Health Careof Elderly and eight geriatr ic centres for thedevelopment in the area of geriatric medicine. It hasalso set aside Rs 1,650 crore for six AIIMS likeinstitutions.

The gap in health personnel and inequity inhealth infrastructure continues to be critical.Vacancies and shortfall plague the system. Vacanciesof doctors at the primary healthcare system rose from17.5 percent in 2005 to 24.1 percent in 2011, whileshortfall of specialists rose from 45.7 percent in 2005to 63.9 percent in 2011. An allocation of Rs 1023 crorehas been made for human resources in health care,but the contours of the spending are not clear.

The inadequate provisioning for the socialsector, particularly education and health, needs to beseen in the context of concerns about the resourcemobilization efforts of the government. In real terms,it means that public provisioning for the social sector,which is key for ensuring inclusive and sustainabledevelopment, are likely to come under pressure.Unfortunately, the Budget fails to provide anyconcrete proposals for the addressing revenuesforegone due to tax exemptions. In his BudgetSpeech, the finance minister acknowledged that Indiahas a low tax to GDP ratio.

That acknowledgement not withstanding, thereappears to be little in the Budget by way of

substantive proposals to increase the tax-GDP ratio.The ratio of government’s gross tax receipts isprojected to increase from 10.4 percent of GDP in the2012-13 revised estimates to 10.9 percent of GDP in2013-14.

The proposed income tax surcharge on thesuper rich works out to a increase of 3 percent on thepeak tax rate, and doesn’t do much to fill the gap.Projections are that in 2025, over 70 percent of thecountry’s population will be of working age. Moreoften than not, Indian leaders refer to India’s growingpopulation as “demographic dividend”, whichpresents the country with a challenge and anopportunity. In order to make good on thisdemographic dividend, there is a need for higherpublic spend in the social sector, especially key areasof education, health and sanitation.

If the government is really interested inleveraging this demographic dividend it needs tomove beyond rhetoric. A higher spend in the socialsector, particularly on both education and health, isabsolutely essential if the government is seriousabout inclusive and sustained growth. Improving thequality of the two key development indicators willcreate the requisite pressure to ensure that the higheconomic growth is both inclusive and sustainable.A better-educated and healthy populace will meanimproved productivity.

There is a tendency to view social sectorspending as an outflow of resources-especially whenit comes to providing education or healthcare. A partof this push for limiting public spend in these sectorscomes from those who call for greater privatization ofhealth and education. It would be a big mistake if thegovernment retreats any further from these sectors.Investing in social sector segments like health andeducation is key to growth.

Nearly 170 years ago, Russian thinkerAlexander Herzen asked “If progress is the end, forwhom are we working? ... Do you truly wish tocondemn all human beings alive to-day to the sad roleof caryatids supporting a floor for others some dayto dance on ... or of wretched galley slaves, up to theirknees in mud, dragging a barge filled with somemysterious treasure and with the humble words“progress in the future” inscribed on its bows?”Herzen’s queryis relevant after all these years, and if




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the government really wants to ensure that growthshould be “faster, sustainable and more inclusive”becomes more than just a pretty slogan, it will do wellto invest in its people focusing on the social sector.

⇒ INDIA’S DEFENCE BUDJET

Just Days after India announced a $ 37.4 billiondefence budget for the year 2013-2014, China cameout with its own official defence budget figures- at $119 billion, some three times its southernneighbour’s. As late as 2000, India’s budget for itsarmed forces at $15.9 billion more or less matchedChina’s officially given out figures. However, in realityeven then the actual Chinese spending was estimatedat three times India’s.

Today, the real Chinese defence budget isbelieved by many, to be nearer 4-5 times India’s.India’s defence budget rose by just 5 per cent, a signof the difficult economic times the world and India isgoing through. India’s $ 1.9 billion economy grew atits decadal low of 5 percent, its inflation rate roseworryingly and its current account deficit or thedifference between the foreign exchange earned by acountry and spent by it, breached self-set limits.

However, the real difference is not just in themoney figures which the two Asian rivals have putout, but in the way India and China will be spendingthat money. India will continue to spend most of itsmoney on its Army with 99,708 crore or 49 per cent ofthe defence budget, earmarked for the 1.2 millionstrong land force. Air force will get the next big chunkof money at Rs 57,503 crore. Navy the smallestservice will receive Rs 36,343 crore, while the DefenceResearch and Development Organisation will get apaltry Rs 10,610 crore and India’s OrdinanceFactories complex a tiny Rs 509 crore.

The Air Force has become the most favouredwing of the defence ministry - With its share of thedefence budget going up from 24.9 per cent to 28.2per cent. Not only that, its allocation formodernisation has gone up by a whopping 30 percent from Rs 28,504 crore for 2011-2012 to Rs 37049crore for 2012-2013. The Air force of course will begoing to town with a huge shopping list and needsthat money. Among other things, it needs to sign acontract to buy 126 French. The Navy and Army’s

modernisation plans have received cuts by 2.8 percent and 3.5 per cent respectively. Last year, some 31per cent of the Rs 79,198 crore capital budget for thedefence forces had been earmarked for Indian Navy,as part of a strategy to build up India’s outreach topartly protect sea lanes used by its merchantmen,especially energy tankers which feed India’s growingappetite for crude oil and partly to counter China’sgrowing naval presence.

However, the real problem with Indian defencespending is that it relies heavily on foreign weaponpurchases - compared to the Chinese who dependmore on domestic manufacture. This means Indiagets a) fewer aircraft or tanks or weapons for themoney both countries spend. b) Their spares have tobe continuously bought and c) there is always a fearof disruption of supplies because of the vagaries offoreign relations.

While India has been busy buying the C 130JHercules heavy lift aircraft, China has been busyproducing its Y-20 heavy lift aircraft, with a maximumpayload of 66 tonnes and capable of flying 4,400 km.The aircraft is based on Russia workhorse - theIlyushin series an still use old Russian engines andis certainly not as sophisticated as the built Hercules.

Similarly, while India hankers for Chinookhelicopters, the Chinese have come out with the 13.8-ton AC313 heavy lift helicopter. Unveiled last year,this aircraft is a larger and modified version of the 7-ton Zhi-8 medium transport helicopter that is a closecopy of the French SA 321 Super Frelon. China hadbought 13 of the French helicopters in the 1970s andat least one was reportedly disassembled for studyand reverse-engineering.

India, despite its head-start in aircraftmanufacturing, having started making aircraft in the1940s and jet engines in the 1950s, has proved itselfincapable of even reverse engineering the manymakes of aircraft it has bought and makes underlicense. The story with tanks is no different. Despitegrand announcements, the Arjun main battle tank hasproven to be a flop story. Just under 50 of them havebeen built and no regiment equipped with these home-made tanks. India still depends on old Russian T-72sand the slightly ‘newer’ T-90s. Despite havingbought the 155 mm Bofors howitzer guns in the late




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1980s along with the technology, domestic politics,saw projects to build them locally shelved fordecades. This year, at long last the Indian army hasplaced orders with Ordinance Factory Board to build114 of them with slight modifications.

Contrast this with the Chinese model. Besides,the heavy lift aircraft, Beijing as successfully reverseengineered ussia’s Sukhoi aircraft and Ameri ‘ stealthtechnology. Its J-20 and J-31 aircraft may be doubtedby western analysts, but like most Chinese take-aways these advanced fighter jets are likely to bevalue for money products, though not as advancedas their western counterparts.

Just one and half decade back, China, like Indiawas a major importer of weapons. However, in the lastdecade and a half, it very consciously worked to‘catch up ‘ .. It reverse engineered British missiles,worked on Soviet era fighter jet platforms to work inimprovements.

It used students and scientists sent abroad onexchange programmes to spy on rival systems, a fewof which were openly available, some commerciallybuyable. It hired out-of-work Soviet weaponsscientists and specialists and restructured its owndefence research and production labyrinths.

The Middle Kingdom has also strategised bycoming up with innovative ideas to take on its archrival - the US - whose military size, strength andspending - dwarfs everyone else. Beijing is believedexperimenting with’ bugs’ in telecom and powerequipment which could cause power andcommunication systems in client countr ies tocollapse.

It has again reportedly trained armies ofhackers who can play havoc with computer basedcommand and control systems in a wide range ofareas and is perfecting satellite warfare capabilities totake out the communication lines of the enemy. It hasalso reportedly strategised on using low cost, smallyet very fast strike craft to disable enemy fleetsincluding aircraft carrier groups.

Despite this defence-industrial complex mo elnext door, India’s focus on indigenization is more thanmissing in its annual budget. It has yet to fully realise

the potential for indigenous manufacture of high techweapons or for innovating new attack systems whichcould be cheap or involve less high tech inputs.Unlike the west, the private sector is hardly involvedin manufacturing weapon systems in India. India hadallotted just under Rs 90 crore in 2012-2013 forprojects under which Indian companies can designand make advanced defence equipment. In the year2013-14, that amount has been cut down to a measlyRs 1 crore, possibly because the amount set aside for2013 has been returned unused!

The private sector too has proved itself as yet,incapable of meeting the challenges required to makequality platforms needed by the armed forces. TheMahindra& Mahindra manufactured ‘Axe’ jeeptouted as India’s answer for a Future Infantry CombatVehicle failed its test and army officers still swear thebest vehicle they have used is the old, fuel-guzzling1960s Jonga.

However, this could well change. Indian privateindustry as lethargic as India’s public sector in doingmeaningful research or development, has startedusing its new found cash reserves to buy up foreignfirms in technology areas where India needs to catchup. India’s Tata group whose cars such as Indica andNano weren’t perceived to be among the besttechnologically, has in the last decade boughtJaguar- Land Rover, giving it access to world classtechnology. Mahindras have similarly bought Koreancar-maker Ssangyong. Its cars are not consideredgreat in terms of design but are grudgingly acceptedas value for money, robust vehicles.

A joint venture Memorandum ofunderstanding inked earlier this year, betweenFrance’s Dassault Aviation and Reliance IndustriesLtd will build components and eventually assembleFalcon business jets in India. These are signs ofwhat may come about. If India can use this newfound confidence in its private sector and builds upon the momentum by getting universities to work intandem with ordinance factories and the privatesector, its defence budget can literally earn more b gfor the rupee in the years ahead.




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HIGHLIGHTS OF THE BUDGETThe Union Budget for 2013-14 aims at higher growth rate leading to inclusive and sustainable

development as ‘mool mantra’.• Finance Minister makes three promises: to women, youth and the poor.• Nirbhaya Fund to empower women and to keep them safe and secure.• Proposal to set up India’s first Women’s Bank as a public sector bank.• Rs. 1,000 crore for skill development of ten lakh youth to enhance their employability and

productivity.• Fiscal Deficit for 2013-14 is pegged at 4.8 percent of GDP. The Revenue Deficit will be 3.3 percent

for the same period.• Substantial rise in allocation to the social sector. Allocation for Rural Development Ministry raised

by46 percent to Rs. 80,194 crore.• The target for farm credit for 2013-14 has been set at Rs. 7,00,000 crore against Rs. 5,75,000 crore

during the current year.• Rs. 10,000 crore earmarked for National Food Security towards the incremental cost.• ICDS gets Rs. 17,700 crore. This is 11. 7 percent more than the current year.• Drinking water and sanitation will receive Rs. 15,260 crare. Rs. 1,400 crore is being provided for

setting up water purification plants to cover arsenic and fluoride affected rural areas.• Health and Family Welfare Ministry has been allotted Rs. 37,330 crore. National Health Mission

will get Rs. 21,239 crore which represents 24.3 percent over the RE.• The Jawaharlal Nehru National Urban Renewal Mission (JNNURM) will receive Rs. 14,873 crore as

against RE of Rs. 7,383 crore in the current year.Defence has been allocated Rs. 2,03,672 crore.

• Rs. 3,511 crore have been earmarked to Minority Affairs Ministry, 60 percent higher than RE for2012-13.

• Income limit under Rajiv Gandhi Equity Savings Scheme (RGESS) will be raised from Rs. 10 lakh toRs.12Iakh.

• First home loan from a bank or housing finance corporation upto Rs. 251akh entitled to additionaldeduction of interest upto Rs.1Iakh.

• Technology Upgradation Fund Scheme (TUFS) for textile to continue in 12th Plan with an investmenttarget of Rs. 1,51,000 crare.

• Rs.14,000 crore will be pravided to public sector banks for capital infusion in 2013-14.• A grant of Rs. 100 crore each has been made to 4 institutions of excellence including Aligarh

Muslim University, Banaras Hindu University, Tata Institute of Social Sciences, Guwahati andIndian National Trustfor Art and Cultural Heritage (INTACH).

• New taxes to yield Rs. 18,000 crore.• A surcharge of 10 percent on persons (other than companies) whose taxable income exceeds RS.1

crore have been levied.• Tobacco products, SUVs and Mobile Phones to cost more.• Relief of Rs. 2000 for the tax payers in the first bracket of 2 to 5lakhs.• ‘Voluntary Compliance Encouragement Scheme’ launched for recovering service tax dues.• Rs. 9,000 crore earmarked as the first installment of balance of CST compensations to different

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⇒ LAND USE AND AGRARAIN RELATIONS

Land is a finite resource and there isconflicting and competing demands onit. For 80% of the world, agriculture land

is the primary source of life and livelihood. Indiaholds 2.4% of the world’s geographical area (328.73mha) but supports 17.5% of the world’s population.India is home to 18% of the cattle population of theworld while owning a mere 0.5% of the total grazingarea. Of the total 328 mha (total geographical area},land- use statistics is available for approximately 305mha (93%) of the total land. 228 million ha (69%) ofits geographical area falls within dry land thatencompasses arid, semi-arid, dry and sub-humid landas per Thornthewaite classification.

India is blessed with a wide range of soilpattern, each particular to the locale. The alluvial soil(78 mha) that covers the great Indo- Gangetic Plains,the valleys of the rivers Narmada and Tapti {MadhyaPradesh), the Cauvery Basin (Tamil Nadu) supportscereals, oil, pulses, potato and sugar cane. The BlackCotton soil (51.8 mha) found in Maharashtra, Gujarat,Madhya Pradesh, Uttar Pradesh, Karnataka,Rajasthan and Andhra Pradesh supports cereals,cotton, citrus fruits, pulses, oil seeds and vegetables.The red soil of South India and Madhya Pradesh,West-Bengal and Bihar supports rice, millets, tobaccoand vegetables. The laterite soil (12.6 mha) and desertsoil (37 mha) are not found suitable for agriculture.

Water is a resource precious and scarce inIndia. The variability of precipitation spatially and inquantity can be inferred by the fact that rainfall hasbeen recorded as low as 100 mm in West Rajasthanand 9000mm in Meghalaya in North Eastern India.India receives 4000 cubic kilometre of precipitation in

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the country in its 35 meteorological sub-divisions. Ofthis amount, only 50% is put to benefit due totopographical and other constraints. The fact thatwater is crucial to agriculture in a country that has68% of its net cultivated area as rain-fed, can hardlybe exaggerated. Of the total cultivated area of 142mha, 97 mha is rainfed. The full irrigation potential ofthe country has been revised to 139.5 mha out ofwhich 58.5 mha is watered by major and minorirrigation schemes, 15 mha by minor irrigationschemes and 40 mha by groundwater exploitation.India’s irrigation potential increased from 22.6 mha(1951) to 90 mha (1995-96) but water usage efficiencyis a meagre 30-40%. That is why more than 50% of thetotal cultivated area is still rainfed. The state of soiland water that mainly determine land and its utility inagriculture is of prime importance to maintainsustainable development. We need to define andexamine land use pattern with an emphasis on aviable land use policy taking the above factors intoconsideration.

Land degradation indicates temporary orpermanent long-term decline in ecosystem functionand productive capacity. It may refer to thedestruction or deterioration in health of terrestrialecosystems, thus affecting the associatedbiodiversity, natural ecological processes andecosystem resilience. It also considers the reductionor loss of biological/economic productivity andcomplexity of croplands, pasture, woodland, forest,etc.

⇒ LAND MANAGEMENT CAN

IMPROVE RURAL ECONOMY

Land degradation is increasing in severity andextent in many parts of the world, with more than




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20% of all cultivated areas, 30% of forests and 10%of grasslands undergoing degradation (Bai et al.,2008). Millions of hectares of land per year are beingdegraded in all climatic regions. It is estimated that 2.6billion people are affected by land degradation anddesertification in more than a hundred countries,influencing over 33% of the earth’s land surface(Adams and Eswaran, 2000). This is a globaldevelopment and environmental issue highlighted atthe United Nations Convention to CombatDesertification, the Convention on Biodiversity, theKyoto protocol on global climate change and themillennium development goal (UNCED, 1992; UNEP,2008).

The decline in land quality caused by humanactivities has been a major global issue since the 20thcentury and will remain high on the internationalagenda in the 21st century (Eswaran et al., 2001). Theimmediate causes of land degradation areinappropriate land use that leads to degradation ofsoil, water and vegetative cover and loss of both soiland vegetative biological diversity, affectingecosystem structure and functions (Snel and Bot,2003). Degraded lands are more susceptible to theadverse effects of climatic change such as increasedtemperature and more severe droughts.

Land degradation encompasses the wholeenvironment but includes individual factorsconcerning soils, water resources (surface, ground),forests (woodlands), grasslands (rangelands),croplands (rain fed, irrigated) and biodiversity(animals, vegetative cover, soil) (FAO, 2005). On theother hand the NRC (1994) stressed that landdegradation is complex and involves the interactionof changes in the physical, chemical and biologicalproperties of the soil and vegetation. The complexityof land degradation means its definition differs fromarea to area, depending on the subject to beemphasized.

⇒ POVERTY IN INDIA

Poverty is one of the main problems whichhave attracted attention of sociologists andeconomists. It indicates a condition in which a personfails to maintain a living standard adequate for hisphysical and mental efficienty.

According to 2010 data from the UnitedNations Development Programme, an estimated37.2% of Indians live below the country’s nationalpoverty line. A recent report by the Oxford Povertyand Human Development Initiative (OPHI) states that8 Indian states have more poor than 26 poorestAfrican nations combined which totals to more than410 million poor in the poorest African countries.

According to a new UN MillenniumDevelopment Goals Report, as many as 320 millionpeople in India and China are expected to come outof extreme poverty in the next four years, while India’spoverty rate is projected to drop to 22% in 2015. Thereport also indicates that in Southern Asia, however,only India, where the poverty rate is projected to fallfrom 51% in 1990 to about 22% in 2015, is on track tocut poverty half by the 2015 target date. The latestUNICEF data shows that one in three malnourishedchildren worldwide are found in India. 42 percent ofchildren under five were underweight. It also showedthat a total of 58 percent of children under fivesurveyed were stunted. The 2011 Global HungerIndex (GHI) Report ranked India 45th, amongstleading countries with hunger situation. It also placesIndia amongst the three countries where the GHIbetween 1996 and 2011 went up from 22.9 to 23.7,while 78 out of the 81 developing countries studied,including Pakistan, Nepal, Bangladesh, Vietnam,Kenya, Nigeria, Myanmar, Uganda, Zimabwe andMalawi, succeded in improving hunger condition.

⇒ CLASSIFICATION OF DRYLANDS

Dryland ecosystems are mainly categorisedinto four subtypes according to aridity index andannual rainfall levels into hyperarid, arid, semi-aridand dry sub-humid areas..World Drylands

Dryland ecosystems occupy over 41 per centof the earth’s land surface. Desertification affects 70per cent of the world drylands, amounting to 3.6billion ha or one-fourth of worlds land surface (IFAD,1995).

Asia possesses the largest land area affectedby desertification, 71 per cent of which is moderatelyto severely degraded. In Africa two-thirds of which isdesert or drylands. 73 per cent of agricultural





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drylands are moderately to severely degraded (IFAD,1995). Africa is under greatest desertification threat,with a rate of disappearance of forest cover of 3.5 to5 million ha per year bearing down on both surfaceand ground water resources and with half thecontents farmland suffering from soil degradation anderosion.Causes of Dryland Formation

Limited rainfall, poor soil quality, fragileenvironments are the main factor behind drylandformation. There is always water scarcity in drylands.The dryness of drylands is due to negative balancebetween mean annual precipitation and potentialevapotranspiration rates. Besides, limited rainfall, thesoils are of poor quality, low in organic matter, henceless fertile. Harsh climates are another important issuewhich limits crop diversification in drylands.

What makes the drylands a difficultenvironment is not only less rainfall, but also itserratic distribution. Inter-annual rainfall can vary from20-100 per cent and periodic draughts are common(Zurayk and Haider, 2002).Problems of Drylands

Water scarcity due to limited rainfall, low soilfertility, mostly deep sandy soil with poor waterholding capacity, shallow and rocky soils with loworganic matter content. Fragile environments withunpredictable floods and droughts are other factorslimiting drylands to become productive ecosystems.Lack of technologies limitation of resources and bioticpressures contribute further in conversion ofdrylands into deserts.

⇒ STRATEGY TO DEVELOP DEGRADED LAND

India has world’s 2% of geographical area and1.5% of forest and pasture lands to support 18% ofworld’s population and 15% of livestock population.The increasing human and animal population hasbeen instrumental in the reduction in the availabilityof land over the decades. While the per capitaavailability of land has declined from 0.89 hectare in1951 to 0.37 hectare in 1991 and is projected todecline to 0.20 hectare in 2035, per capita agriculturalland has declined from 0.48 hectare to 0.16 hectareand likely to decline to 0.08 hectare in respectiveyears.

Extent of Land DegradationAgencies that have so far estimated land

degradation include National Commission onAgriculture [1976], Society for Promotion ofWasteland Developments [1984], National RemoteSensing Agencies [1985], Ministry of Agriculture[1985], National Bureau of Soil Survey and Land UsePlanning [1985 &2005]. The estimates on the extentof land degradation in India vary widely from 63.9million hectares to 187.0 million hectares due todifferent approaches, methodologies, definingdegraded soils, adopting various criter ia fordelineation, among others. However, one cannotunderestimate the challenging nature and extent ofland degradation in India. The National Bureau of SoilSurvey &Land Use Planning [NBSS&LUP] of theICAR, Nagpur in 2005 has reported that out of 328.60million hectares of geographical area in India NetCultivated Area is about 141 million hectares [42.9%]of which irrigated area is about 57 million hectares[40.4%] and about 84 million hectares [59.6%] arerainfed. Area of around 146.82 million hectares[44.7%] out of 328.60 million hectares issuffering fromvarious kinds of land degradation. In absence ofcomprehensive and periodic scientific surveys, thefigures reported by NBSS&LUP based on studiesand several estimates [2005] for various landdegradation have been considered as logicallyconcluded and are being used for various purposes.

Land degradation is caused by several factorsviz. water and wind erosion, water logging, salinity/alkalinity, soil acidity, among others. India has beenexperiencing a very high degree of land degradationas 44.7% of its geographical area is classified asdegraded. Of this 93.68 million hectares [63.8%] areaffected by water erosion, 16.03 million hectares[10.9%] by soil acidity, 14.30 million hectares [9.7%]by water logging, 9.48 million hectares [6.5%] by winderosion, 5.94 million hectares [4.1%] by salinity/alkalinity and 7.38 million hectares [5.0%] by complexproblems.

Across regions, all six regions had very highpercentage of geographical area as degraded rangingfrom as high as 56.3% for Central region to 35.4% forNorthern region and even 29.5% for Delhi and UnionTerritories. Among States, 11 States had extremely





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high percentage of geographical area degraded abovemean value of 44.7% ranging from 52.0% to 89.2% andother 15 States too had significantly high percentageof geographical area degraded varying from 25.4% to43.9%. In particular Mizoram [89.2%] Himachal[75.0%] Nagaland [60.0%] Madhya Pradesh andChhatisgarh combined [59.1%] were States with verysevere intensity of degradation.Policy and Programs

Acknowledging the acute problem of landdegradation, the Government, in its efforts to sustainecological environment, agricultural productivity andproduction, has initiated from time to time severalpolicies and programs to prevent land degradation onone hand and take remedial measures to improve thequality of degraded land on the other.

⇒ LAND ACQUSITION IN INDIA

NEED FOR A PARADIGM SHIFT

Land is the base for economic developmentand poverty alleviation of a country. In recent years,land acquisition for private sector projects andPublic-Private Partnership (PPP) projects like Singur,Nandigram, Yamuna Expressway, POSCO, etc createda lot of noise. Few lakhs crores rupees of investmentis hanging in balance in the country from bothdomestic and Foreign Direct Investment (FDI)sources because of failure of government to provideland for the projects and also failure of the land-market to provide sufficient land for development. Island acquisition process in India seriously flawed? IsThe Right to Fair Compensation ResettlementRehabilitation and Transparency in Land AcquisitionBill 2012 (RFCRRTLA Bill 2012) solution to thisproblem? Are land institutions of India not marketfriendly in the post 1991 economic reform era? Thesequestions, which provide the basis for this paper, areexamined through field observation and fieldexperience of the authors.Doctrine of Eminent Domain

The power of the sovereign state to acquire orexpropriate private property for public use/purpose isdriven from doctrine of Eminent Domain. The originof the term “Eminent Domain” can be traced to thelegal treatise written by the Dutch Jurist Hugo

Grotius in 1625 and described as follows:“The property of subjects is under the eminent

domain of the state, so that the state or he who actsfor it may use and even alienate and destroy suchproperty, not only in the case of extreme necessity, inwhich even private persons have a right over theproperty of others but for ends of public utility, towhich ends those who founded civil society must besupposed to have intended that private end shouldgive way. But it is to be added that when this donethe state in bound to make good the loss to thosewho lose their property”.

Almost all sovereign states in the world havelaw for land acquisition or expropriation. Pakistan andBangladesh are using the same Land Acquisition Act1894 (LA Act 1894). Even through all sovereign stateare acquiring or expropriating private properties, whyland acquisition becomes a hindrance for economicdevelopment in India? The fundamental conceptualdifference is defining the purpose of land acquisition:public use Vs public purpose. Most of the westerncountries acquire land for public use like roads,public safety, health, etc and not for the project inwhich private profit motive is involved even thoughproject has public purpose. On the other hand in UKcommon law system, land is acquired for publicpurpose, which is followed throughout allCommonwealth Nations including India.

In Indian Jurisprudence also, when LA Act1894 was enacted public purpose included in thedefinition was roads, canals and social purpose ofstate-run schools and hospitals. By an amendment in1933, railway companies were included in publicpurpose. But the amendments introduced in 1984 inthe LA Act 1894 by amending section of the originalact to insert the words “or for a Company” after “anypublic purpose”. This opened the floodgates toacquisition of land by the state for private and publicsector companies and again this is embellished in theproposed bill. If we put ban on land acquisition forprivate projects and PPP project with present landsystem in India, we strongly believe, the economicdevelopment of India will be seriously affectedbecause of inherent problem in our land institutions.Land System of India

The problem of land acquisition in India can be





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better appreciated by understanding the land systemof India. -Modern day land system of India has itsbase from the land revenue system introduced byAkbar’s revenues minister Todar Mal. The salientfeatures of Todar Mal’s systems were measurement ofland, classification of land and fixation of rates (Appu1996). After the decline of Mughal dynasty, EastIndia Company and the British Raj were establishedextractive land institutions on the Todar Mal principlecalled Zamindhari system, Mahalwari system andRaiyatwari system to extract maximum land revenuefrom peasants, which was the major source ofrevenue. In the Zamindari area, British had not holdelaborate administrative arrangement and lowestfunctionary level was sub-divisional level and noproper land records maintained either by Britishadministration or by Zamindars. Only land recordmaintained was land record created- after each surveyand settlement operation and again by revisionalsettlement. Because of this reason, elsewhereZamindari area does not have proper land recordsand weak administration. In Mahalwari areas, theland revenues were fixed for each or group of villagesin which one family or person who was responsibleto collect and pay land revenue.

The Raiyatwari system covered the erstwhileMadras (except North Madras) and BombayPresidencies and part of the central provinces andBarer. The Raiyatwari System was based on theassessment of land revenue on sight fields orholdings, surveyed, numbered and marked out on theground (Appu 1996). Because of elaboratearrangement for revenue collection andadministrative step created during British Raj, theseareas of India is having better land records than restof India even today. Another wisdom of British wascreation of primitive land institutions in excluded andpartially excluded areas to separate tribal and othersdeprived people of these areas with plain and Hindupopulation by perpetuating divide and rule policy.This primitive land institutions created by British wasresponsible for creation of Scheduled V and VI areasand poverty and deprivation of these regions.

During the first four five year plan periods,India introduced radical land reform on socialismland reform model to increase agricultural production

and to provide social justice without any role formarket forces. During this land reform period, therewas no respect for private property rights and noland institutions was created for allocation landresources for industrialisation and urbanisationthrough market forces. Till date, land system of Indiais suited for subsistence agriculture using manuallabour and does not have major provision forindustrialisation, urbanisation and mining activities.By introducing Zaminidari abolition law and ceilinglaw on agriculture land and also on urban land intothe India’s land system, Indian land holding becometoo small and restriction on transfer and lease, whichfurther reduced the size of holding. In the name ofdistribution of government land and redistribution ofsurplus land, we distributed waste land, barren landand dry land for agriculture which could have beenkept as construction land. This led to non-availabilityof large plots of land in thousands of acres forindustrialisation and urbanisation.

⇒WASTEDLAND DEVELOPMENT

INITIATIVES A REVIEW

The burgeoning population growth of Indiacoupled with rapid urban development has led to anincreasing demand on the country’s land resources.An indication of this burden on the natural resourcesis a simple comparison between India’s share in totalworld land area and in the total world population.While the former is a meagre 2 per cent of the worldgeographical area, the latter constitutes 16 per cent ofworld’s population. Land resources providelivelihood to two-thirds of India’s population. Theincreasing pressure on land, relentless exploitation ofthis valuable resource for agricultural and allied,housing, industrial and manufacturing activities hasmade the productive farm lands less productive,leading to its constant degradation.

The total geographical area of the country isaround 329 million hectares out of which only 264million hectares (80 percent) are fit for vegetation.

While 142 million hectares are covered under alltypes of crops, 67 million hectares of land are underforest cover and 68.35 million hectare area of land islying as wastelands in India. The Government ofIndia (Gol) defines wastelands as the degraded land





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which is currently under-utilised and can be broughtunder vegetative cover, with reasonable effort byresorting to effective and appropriate water and soilmanagement.

It is estimated that approximately half of thewastelands in India which are not covered underforests of any kind can be made productive if treatedproperly. It is the unprotected and unpreserved non-forestlands, which are subjected to constantdegradation. The tremendously increasing bioticpressure on the land resources, in the last sixdecades, have promoted deforestation and doneirreversible damage to the soil and environment. Landdegradation is not only impacting the livelihoods ofthe land-dependent communities but also disruptingthe ecosystem as a whole. Keeping this in view thegovernment created the Department of WastelandDevelopment (presently renamed as Department ofLand Resources) in July 1992 under the Ministry ofRural Development to restore ecological imbalancethrough development of degraded non-forestwastelands.Status of Wasteland in India

The status of wastelands in India between1986-2000 and 2003 is highlighted. During 1986-2000,

6.38 lakh square KMs of land was categorised astotal wasteland. This fell by 2.71 per cent by 2003. Ascan be seen from the Table, there were 5.52 lakhsquare KMs of land which required treatment tobecome productive. While wastelands under thecategory of sands (either in the coastal region orinland), shifting cultivation, degraded notifiedforestland witnessed a sharp fall, the wastelands inthe category of mining and industrial and steepsloping areas increased.Government Intervention

In 1985, the government created the NationalWasteland Development Board (NWDB) under theMinistry of Forests and Environment with a view totackle the problem of degradation of lands,restoration of ecology and to meet the growingdemands of fuel wood and fodder at the nationallevel. In 1992, the NWDB was reconstituted andplaced under the Ministry of Rural Development,where emphasis was laid on treating wastelands innon-forest areas with active involvement of thecommunity. The programmes designed andimplemented by this Board aimed at improvingproductivity of waste and degraded lands.




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⇒ GLOBAL HUNGER INDEX, 2012

The report ‘Global Hunger Index (GHI)2012’ by the International Food PolicyResearch Institute (IFPRI) is based on

three equally weighted indicators, namelyundernourishment (proportion of undernourishedpeople as percentage of population), childunderweight and child mortality. This report mentionsthat India has lagged behind in improving its GHIscore despite strong economic growth along with thestatement that GHI data is based partly on outdateddata.The approach in dealing with the nutritionchallenges has been two pronged: First is the Multi-sectoral approach for accelerated action on thedeterminants of malnutrition in targeting nutrition inschemes/ programmes of all the sectors. The secondapproach is the direct and specific interventionstargeted towards the vulnerable groups such aschildren below 6 years, adolescent girls, pregnantand lactating mothers. The Government has accordedhigh priority to the issue of malnutrition especiallyamong children and women including young girls andis implementing several schemes/programmesthrough State Governments/UT Administrations. Theschemes/programmes include the Integrated ChildDevelopment Services (ICDS), National Rural HealthMission (NRHM), Mid-Day Meal Scheme, RajivGandhi Scheme for Empowerment of Adolescent Girls(RGSEAG) namely SABLA, Indira Gandhi MatritvaSahyogYojna (IGMSY) as direct targetedinterventions. Besides, indirect multi-sectoralinterventions include Targeted Public DistributionSystem (TPDS), National Horticulture Mission,National Food Security Mission, Mahatma GandhiNational Rural Employment Guarantee Scheme

(MGNREGS), Nirmal Bharat Abhiyan, National RuralDrinking Water Programme etc. All these schemeshave potential to address one or other aspect ofNutrition. This was stated by Smt. Krishna Tirath,Minister for Women and Child Development, in awritten reply to the Lok Sabha today.

⇒ PANEL ON CLIMATE CHANGE The Government has constituted the Executive

Committee on Climate Change consisting ofrepresentatives of various Ministries and agenciesunder the Chairmanship of Principal Secretary toPrime Minister to monitor the implementation of eightnational missions and other initiatives on climatechange and assist the Prime Minister’s Council onClimate Change in evolving a coordinated responseto climate change related issues at the national level.This was stated by Shrimati Jayanthi NatarajanMinister of State (Independent Charge) forEnvironment and Forests, in the Lok Sabha today, ina written reply to a question by Shri Pralhad Joshi &Shri S.S. Ramasubbu. The Executive Committeecomprises, inter alia, of the representatives of theCabinet Secretariat, the Planning Commission, andthe Ministries/ Departments of Power, New andRenewable Energy, Urban Development, WaterResources, Science and Technology, Agriculture &Cooperation, Agriculture Research and Education,Earth Sciences, Coal, Petroleum and Natural Gas,Economic Affairs, and Environment and Forests.Functions of the Committee include, inter alia,advising the PM’s Council on Climate Change onmodifications, as may be necessary, in the objectives,strategies and structures of the missions andcoordinating with various agencies on issues relating




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to climate change. The Minister further stated thatNational Missions under the National Action Plan onClimate Change (NAPCC) include appropriatedeliverables and timelines for monitoring of theirimplementation. These are regularly reviewed fromtime to time through the institutional mechanism laiddown in the NAPCC.

⇒ HUMAN DEVELOPMENT INDEX The latest Human Development Index (HDI)

2011 prepared by the UNDP ranks India at 134 out of187 countries and its HDI is shown as 0.547 which isan improvement of 5.39% (HDI was 0.519 in 2010 HDIpart). The health aspects are reflected in lifeexpectancy at birth which is shown as 65.4 year inHDI 2011 against 64.4 year in HDI 2010. High IMRand Under 5 MR are the major factors in loweringLife Expectancy at Birth. MMR also needsimprovement. A target of 25/1000 for IMR and 1000/100,000 live births for MMR has been prescribed bythe 12 Five Year plan document for the end of 2017.Some of the steps taken under NRHM for improvingthe situation are:

• Regular ANC care at health facilities andhome visits by ASHA

• Personalized monitoring of pregnant women,the new born and the post partum womanthrough MCTS

• Promotion of institutional delivery throughJSY, increase in delivery points andimprovement in referral transport.

• JSSK• Increase in number of SNCU for managing

preterm and sick neonates• Promotion of exclusive breast feeding• Reduction in incidence of diarrhoea through

improvement in hygiene by measures suchas hand washing and management ofdiarrhoea through Zinc and ORSsupplementation.

• Extension of immunization coverage• The various disease control programs

against Malaria, Kala Azar, filaria, TB(RNTCP) etc have improved the burden ofdisease and mortality due to major infectiousdiseases in all stages of life.

• In order to tackle the impact of Non-communicable diseases, Government ofIndia has launched the National Programmefor prevention and control of cancer,Diabetes, Cardiovascular Diseases andstroke (NPCDCS) in 2010 in 100 districts of21 States with a focus on an awarenessgeneration for behaviour and life stylechanges, early diagnosis and referral tohigher facilities for appropriate management.It has also been envisaged to build capacityat various levels of health care systems forprevention, diagnosis and treatment ofNCDs.

⇒ MILLENNIUM DEVELOPMENT GOALS The Millennium Development Goals (MDGs)

adopted during the U.N. Millennium Summit, 2000 by189 countries including India consists of eight goalswhich are sought to be achieved during the period1990 to 2015.

The Millennium Development Goal (MDG) -1 isregarding Eradication of Extreme Poverty and Hunger,which have 2 targets namely, (i) Halve, between 1990and 2015, the percentage of population below theNational Poverty Line and (ii) Halve, between 1990and 2015, the proportion of people who suffer fromhunger. The indicator for measuring target two is theprevalence of underweight children under three yearsof age. Thus from the estimated 52% in 1990, theproportion of underweight children below 3 years isrequired to be reduced to 26% by 2015. All-Indiatrend of the proportion of underweight childrenbelow 3 years of age shows India is going slow ineliminating the effect of malnourishment as theprevalence of underweight has declined by 3percentage points during 1998-99 to 2005-06 , fromabout 43 percent to about 40 percent (as per theNational Family Health Survey, 2005-06). At thishistorical rate of decline the proportion ofunderweight children is expected to come down toabout 33% only by 2015 vis-à-vis the 2015 targetlevel of 26% falling short of the target. The problemof malnutrition is complex, multi-dimensional andinter-generational in nature, and cannot be improvedby a single sector alone. Poverty and hunger along





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with household food insecurity, illiteracy and lack ofawareness especially in women, access to healthservices, availability of safe drinking water, sanitationand proper environmental conditions are some of thedeterminants of malnutrition. In fact, improvement inmalnutrition is linked to achievement of six of theMillennium Development Goals.

The approach in dealing with the nutritionchallenges has been two pronged: First is the Multi-sectoral approach for accelerated action on thedeterminants of malnutrition in targeting nutrition inschemes/ programmes of all the sectors. The secondapproach is the direct and specific interventionstargeted towards the vulnerable groups such aschildren below 6 years, adolescent girls, pregnantand lactating mothers. The Government has accordedhigh priority to the issue of malnutrition especiallyamong children and women including young girls andis implementing several schemes/programmesthrough State Governments/UT Administrationsincluding Gujarat, Madhya Pradesh and UttarPradesh. The schemes/programmes include theIntegrated Child Development Services (ICDS),National Rural Health Mission (NRHM), Mid-DayMeal Scheme, Rajiv Gandhi Scheme for Empowermentof Adolescent Girls (RGSEAG) namely SABLA, IndiraGandhi Matritva Sahyog Yojana (IGMSY) as directtargeted interventions.

Besides, indirect multi-sectoral interventionsinclude Targeted Public Distribution System (TPDS),National Horticulture Mission, National Food SecurityMission, Mahatma Gandhi National RuralEmployment Guarantee Scheme (MGNREGS), NirmalBharat Abhiyan, National Rural Drinking WaterProgramme etc. All these schemes have potential toaddress one or other aspect of Nutrition. RecentlyGovernment has approved the strengthening andrestructuring of ICDS with special focus on pregnantand lactating mothers and children under three. Therestructured and strengthened ICDS will be rolledout in three phases with focus on the 200 high burdendistricts for malnutrition during 2012-13 (whichincludes 15 districts in Gujarat, 27 districts in MadhyaPradesh and 41 districts in Uttar Pradesh); additional200 districts in 2013-14 including districts from thespecial category States and NER and the remaining

districts in 2014-15. Further, an Information Educationand Communication Campaign (IEC) to generateawareness against malnutrition has been launched inthe country including Gujarat, Madhya Pradesh andUttar Pradesh . This was stated by Smt. KrishnaTirath, Minister for Women and Child Development,in a written reply to the Lok Sabha today.

PLANNING COMMISSION

HOSTING GOOGLE HANGOUT

The Planning Commission, along with theNational Innovation Council, is hosting its firstGoogle Hangout on the 12th Five Year Plan on 15thMarch 2013 at 5 PM. The hour long session onGoogle Hangout will be attended by Dr. MontekSingh Ahluwalia, Deputy Chairman, PlanningCommission, Sh. Sam Pitroda, Chairman, NationalInnovation Council, Members and the Secretary ofthe Planning Commission who will answer questionsfrom the public and from a panel invited to attend theHangout. The aim through this interaction iscommunicate the 12th Five Year Plan through socialmedia platforms to enhance public participation andcitizen engagement.

The Google Hangout takes forward theinclusive process followed by the Commission informulating the Plan. In formulating the 12th Five YearPlan, the Planning Commission consulted much morewidely than ever before, underlining the need for amore inclusive and interactive approach. During thisprocess, inputs were provided by over 950 civilsociety organisations, multiple businessassociations, all State Governments, as well as localrepresentative institutions and unions. The Plan hasbeen approved by the National Development Counciland the aim now is to share its vision with thecountry’s citizens.

This is a first step in leveraging social mediafor engagement on the 12th Five Year Plan and overthe next few months, the Planning Commission willpublicise the content of the Plan on several othersocial media channels, including Facebook, Twitter,Google+ and YouTube on which it already has apresence. The details of the event are available onwww.innovationcouncil.gov.in and the event will bestreamed live via www.youtube.com/PlanComIndia on




http://www.innovationcouncil.gov.in

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15th March at 5 PM. More details of the event will bemade available via the Twitter handles of PlanningCommission (@PlanComIndia) and Mr. Sam Pitroda(@pitrodasam).

IMPLEMENTATION OF BRGF PROGRAMME

This Ministry of Panchayati Raj is tasked withthe implementation of the Backward Regions GrantFund (BRGF) Programme as per Government’s policyof ensuring balanced development. The BRGFProgramme is designed to redress regionalimbalances in development of 272 identifiedbackward districts in the country. The funds thereunder provide financial resources for supplementingand converging existing developmental inflows intoidentified districts so as to bridge critical gaps in localinfrastructure and other development requirements.

As per the BRGF Guidelines, the Annual ActionPlans prepared by the Panchayats and Urban LocalBodies (ULBs) are consolidated into the District Plansby the respective District Planning Committees whichare then forwarded to the Ministry of Panchayati Raj,Government of India, by the respective StateGovernments for releasing the funds as per eligibilityof the districts. A statement showing funds releasedand utilised by the States under the BRGFProgramme during the last three years and currentyear is at Annex-1.The complaints received regardingmisuse of Backwards Regions Grant Funds (BRGF)are forwarded to the concerned State Governmentsfor taking necessary action. A list of complaintsreceived during the current year is at Annex-2. TheMinistry of Panchayati Raj insists that auditing ofPanchayats funds/ works under BRGF Programme isdone and Audit Reports are submitted along withother necessary documents for release of funds. Theaudit is to be done either by Local Fund Auditors orby Chartered Accountants listed in the panel of theState Government or AGs of the State.

This information was given by the Minister ofPanchayati Raj Shri V. Kishore Chandra Deo in awritten reply in the Rajya Sabha today.

GISATIndian Space Research Organisation (ISRO) is

designing a GEO Imaging Satellite (GISAT).

GISAT will carry a GEO Imager with multi-spectral (visible, near infra-red and thermal), multi-resolution (50m to 1.5 km) imaging instruments.GISAT will be placed in geostationary orbit of 36,000km. The remote sensing satellites launched by ISROrevisit the same area once in every 2 to 24 days andacquire images of a geographical strip (swath) atdifferent spatial resolution (360 meter to better than1 meter). GISAT will provide near real time pictures oflarge areas of the country, under cloud freeconditions, at frequent intervals. That is, selectedSector-wise image every 5 minutes and entire Indianlandmass image every 30 minutes at 50m spatialresolution. The total financial outlay for the project is392 crore excluding the launch cost. The amountspent up to March 2012 is 9.9 crore and BE provisionof 50 crore is made for the year 2012-2013. GISAT isplanned to be launched during 2016-17.

APPOINTMENTS MADE TO THE 20TH

LAW COMMISSION OF INDIA

The Government has appointed Shri JusticeS.N. Kapoor, retired Judge of Delhi High Court, as afull-time Member of the 20th Law Commission ofIndia with effect from the forenoon of 15th March,2013 and up to 31st August, 2015 i.e. till the end of itsterm. Prof. (Dr.) Mool Chand Sharma, Vice Chancellor,Central University of Haryana, has also beenappointed as full-time Member. As per theNotification issued by the Government, Prof. (Dr.)Yogesh Tyagi, Dean & Professor of Law, South AsianUniversity, New Delhi; and Shri R. Venkataramani,Senior Advocate, Supreme Court of India, have beenappointed as Part-time Members of the 20th LawCommission of India with effect from the date theyassume charge and up to 31st August, 2015. TheTwentieth Law Commission was constituted througha Government Order with effect from 1st September,2012. It has a three-year term, ending on 31st August,2015. Shri Justice D. K. Jain, Former Judge of theSupreme Court of India, is the Chairman of theCommission.

5TH BRICS SUMMIT - ETHEKWINI

DECLARATION AND ACTION PLAN

We, the leaders of the Federative Republic ofBrazil, the Russian Federation, the Republic of India,





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the People‘s Republic of China and the Republic ofSouth Africa, met in Durban, South Africa, on 27March 2013 at the Fifth BRICS Summit. Ourdiscussions took place under the overarching theme,“BRICS and Africa: Partnership for Development,Integration and Industrialisation”. The Fifth BRICSSummit concluded the first cycle of BRICS Summitsand we reaffirmed our commitment to the promotionof international law, multilateralism and the centralrole of the United Nations (UN). Our discussionsreflected our growing intra-BRICS solidarity as wellas our shared goal to contribute positively to globalpeace, stability, development and cooperation. Wealso considered our role in the international systemas based on an inclusive approach of sharedsolidarity and cooperation towards all nations andpeoples.

We met at a time which requires that weconsider issues of mutual interest and systemicimportance in order to share concerns and to developlasting solutions. We aim at progressively developingBRICS into a full-fledged mechanism of current andlong-term coordination on a wide range of key issuesof the world economy and politics. The prevailingglobal governance architecture is regulated byinstitutions which were conceived in circumstanceswhen the international landscape in all its aspectswas characterised by very different challenges andopportunities. As the global economy is beingreshaped, weare committed to exploring new modelsand approaches towards more equitable developmentand inclusive global growth by emphasisingcomplementarities and building on our respectiveeconomic strengths.

We are open to increasing our engagement andcooperation with non-BRICS countries, in particularEmerging Market and Developing Countries(EMDCs), and relevant international and regionalorganisations, as envisioned in the SanyaDeclaration. We will hold a Retreat together withAfrican leaders after this Summit, under thetheme,”Unlocking Africa’s potential: BRICS andAfrica Cooperation on Infrastructure”.The Retreat isan opportunity for BRICS and African leaders todiscuss how to strengthen cooperation between theBRICS countries and the African Continent.

Recognising the importance of regionalintegration for Africa’s sustainable growth,development and poverty eradication, we reaffirm oursupport for the Continent’s integration processes.

Within the framework of the New Partnershipfor Africa’s Development (NEPAD), we supportAfrican countries in their industrialisation processthrough stimulating foreign direct investment,knowledge exchange, capacity-building anddiversification of imports from Africa. Weacknowledge that infrastructure development inAfrica is important and recognise the strides made bythe African Union to identify and address thecontinent’s infrastructure challenges through thedevelopment of the Programme for InfrastructureDevelopment in Africa (PIDA), the AU NEPAD AfricaAction Plan (2010-2015), the NEPAD PresidentialInfrastructure Championing Initiative (PICI), as wellas the Regional Infrastructure Development MasterPlans that have identified priority infrastructuredevelopment projects that are critical to promotingregional integration and industrialisation. We willseek to stimulate infrastructure investment on thebasis of mutual benefit to support industrialdevelopment, job-creation, skills development, foodand nutrition security and poverty eradication andsustainable development in Africa. We therefore,reaffirm our support for sustainable infrastructuredevelopment in Africa.

We note policy actions in Europe, the US andJapan aimed at reducing tail-risks in the worldeconomy. Some of these actions produce negativespillover effects on other economies of the world.Significant risks remain and the performance of theglobal economy still falls behind our expectations. Asa result, uncertainty about strength and durability ofthe recovery and the direction of policy in somemajor economies remains high. In some key countriesunemployment stays unusually elevated, while highlevels of private and public indebtedness inhibitgrowth. In such circumstances, we reaffirm our strongcommitment to support growth and foster financialstability. We also underscore the need for appropriateaction to be taken by advanced economies in orderto rebuild confidence, foster growth and secure astrong recovery.





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Central Banks in advanced economies haveresponded with unconventional monetary policyactions which have increased global liquidity. Whilethis may be consistent with domestic monetary policymandates, major Central Banks should avoid theunintended consequences of these actions in theform of increased volatility of capital flows, currenciesand commodity prices, which may have negativegrowth effects on other economies, in particulardeveloping countries.

We welcome the core objectives of the RussianPresidency in the G20 in 2013, in particular the effortsto increased financing for investment and ensurepublic debt sustainability aimed at ensuring strong,sustainable, inclusive and balanced growth and jobcreation around the world. We will also continue toprioritise the G20 development agenda as a vitalelement of global economic stability and long-termsustainable growth and job creation.

Developing countries face challenges ofinfrastructure development due to insufficient long-term financing and foreign direct investment,especially investment in capital stock. This constrainsglobal aggregate demand. BRICS cooperationtowards more productive use of global financialresources can make a positive contribution toaddressing this problem. In March 2012 we directedour Finance Ministers to examine the feasibility andviability of setting up a New Development Bank formobilising resources for infrastructure andsustainable development projects in BRICS and otheremerging economies and developing countries, tosupplement the existing efforts of multilateral andregional financial institutions for global growth anddevelopment. Following the report from our FinanceMinisters, we are satisfied that the establishment ofa New Development Bank is feasible and viable. Wehave agreed to establish the New Development Bank.The initial contribution to the Bank should besubstantial and sufficient for the Bank to be effectivein financing infrastructure.

In June 2012, in our meeting in Los Cabos, wetasked our Finance Ministers and Central BankGovernors to explore the construction of a financialsafety net through the creation of a ContingentReserve Arrangement (CRA) amongst BRICS

countries. They have concluded that theestablishment of a self-managed contingent reservearrangement would have a positive precautionaryeffect, help BRICS countries forestall short-termliquidity pressures, provide mutual support andfurther strengthen financial stability. It would alsocontribute to strengthening the global financial safetynet and complement existing internationalarrangements as an additional line of defence. We areof the view that the establishment of the CRA with aninitial size of US$ 100 billion is feasible and desirablesubject to internal legal frameworks and appropriatesafeguards. We direct our Finance Ministers andCentral Bank Governors to continue working towardsits establishment.

We are grateful to our Finance Ministers andCentral Bank Governors for the work undertaken onthe New Development Bank and the ContingentReserve Arrangement and direct them to negotiateand conclude the agreements which will establishthem. We will review progress made in these twoinitiatives at our next meeting in September 2013.

We welcome the conclusion between ourExport-Import Banks (EXIM) and DevelopmentBanks, of both the “Multilateral Agreement onCooperation and Co-financing for SustainableDevelopment” and, given the steep growth trajectoryof the African continent and the significantinfrastructure funding requirements directlyemanating from this growth path, the “MultilateralAgreement on Infrastructure Co-Financing forAfrica”.

We call for the reform of International FinancialInstitutions to make them more representative and toreflect the growing weight of BRICS and otherdeveloping countries. We remain concerned with theslow pace of the reform of the IMF. We see an urgentneed to implement, as agreed, the 2010 InternationalMonetary Fund (IMF) Governance and QuotaReform. We urge all members to take all necessarysteps to achieve an agreement on the quota formulaand complete the next general quota review byJanuary 2014. The reform of the IMF shouldstrengthen the voice and representation of thepoorest members of the IMF, including Sub-SaharanAfrica. All options should be explored, with an open





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mind, to achieve this. We support the reform andimprovement of the international monetary system,with a broad-based international reserve currencysystem providing stability and certainty. We welcomethe discussion about the role of the SDR in theexisting international monetary system including thecomposition of SDR’s basket of currencies. Wesupport the IMF to make its surveillance frameworkmore integrated and even-handed. The leadershipselection of IFIs should be through an open,transparent and merit-based process and truly opento candidates from the emerging market economiesand developing countries.

We emphasise the importance of ensuringsteady, adequate and predictable access to long termfinance for developing countries from a variety ofsources. We would like to see concerted global efforttowards infrastructure financing and investmentthrough the instrumentality of adequately resourcedMultilateral Development Banks (MDBs) andRegional Development Banks (RDBs). We urge allparties to work towards an ambitious InternationalDevelopment Association(IDA)17 replenishment.

We reaffirm our support for an open,transparent and rules-based multilateral tradingsystem. We will continue in our efforts for thesuccessful conclusion of the Doha Round, based onthe progress made and in keeping with its mandate,while upholding the principles of transparency,inclusiveness and multilateralism. We are committedto ensure that new proposals and approaches to theDoha Round negotiations will reinforce the coreprinciples and the developmental mandate of theDoha Round. We look forward to significant andmeaningful deliverables that are balanced andaddress key development concerns of the poorestand most vulnerable WTO members, at the ninthMinisterial Conference of the WTO in Bali.

We note that the process is underway for theselection of a new WTO Director-General in 2013. Weconcur that the WTO requires a new leader whodemonstrates a commitment to multilateralism and toenhancing the effectiveness of the WTO includingthrough a commitment to support efforts that willlead to an expeditious conclusion of the DDA. Weconsider that the next Director-General of the WTOshould be a representative of a developing country.

We reaffirm the United Nations Conference onTrade and Development’s (UNCTAD) mandate asthe focal point in the UN system dedicated toconsider the interrelated issues of trade, investment,finance and technology from a developmentperspective. UNCTAD’s mandate and work areunique and necessary to deal with the challenges ofdevelopment and growth in the increasinglyinterdependent global economy. We also reaffirm theimportance of strengthening UNCTAD’s capacity todeliver on its programmes of consensus building,policy dialogue, research, technical cooperation andcapacity building, so that it is better equipped todeliver on its development mandate.

We acknowledge the important role that StateOwned Companies (SOCs) play in the economy andencourage our SOCs to explore ways of cooperation,exchange of information and best practices.

We recognise the fundamental role played bySmall and Medium-Sized Enterprises (SMEs) in theeconomies of our countries. SMEs are major creatorsof jobs and wealth. In this regard, we will exploreopportunities for cooperating in the field of SMEsand recognise the need for promoting dialogueamong the respective Ministries and Agencies incharge of the theme, particularly with a view topromoting their international exchange andcooperation and fostering innovation, research anddevelopment.

We reiterate our strong commitment to theUnited Nations (UN) as the foremost multilateralforum entrusted with bringing about hope, peace,order and sustainable development to the world. TheUN enjoys universal membership and is at the centreof global governance and multilateralism.In thisregard, we reaffirm the need for a comprehensivereform of the UN, including its Security Council, witha view to making it more representative, effective andefficient, so that it can be more responsive to globalchallenges. In this regard, China and Russia reiteratethe importance they attach to the status of Brazil,India and South Africa in international affairs andsupport their aspiration to play a greater role in theUN.

We underscore our commitment to worktogether in the UN to continue our cooperation and







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strengthen multilateral approaches in internationalrelations based on the rule of law and anchored in theCharter of the United Nations.

We are committed to building a harmoniousworld of lasting peace and common prosperity andreaffirm that the 21stcentury should be marked bypeace, security, development, and cooperation. It isthe overarching objective and strong shared desirefor peace, security, development and cooperationthat brought together BRICS countries.

We welcome the twentieth Anniversary of theWorld Conference on Human Rights and of theVienna Declaration and Programme of Action andagree to explore cooperation in the field of humanrights.

We commend the efforts of the internationalcommunity and acknowledge the central role of theAfrican Union (AU) and its Peace and SecurityCouncil in conflict resolution in Africa. We call uponthe UNSC to enhance cooperation with the AfricanUnion, and its Peace and Security Council, pursuantto UNSC resolutions in this regard. We express ourdeep concern with instability stretching from NorthAfrica, in particular the Sahel, and the Gulf of Guinea.We also remain concerned about reports ofdeterioration in humanitarian conditions in somecountries.

We welcome the appointment of the newChairperson of the AU Commission as an affirmationof the leadership of women.

We express our deep concern with thedeterioration of the security and humanitariansituation in Syria and condemn the increasingviolations of human rights and of internationalhumanitarian law as a result of continued violence.We believe that the Joint Communiqué of the GenevaAction Group provides a basis for resolution of theSyrian crisis and reaffirm our opposition to any furthermilitarization of the conflict. A Syrian-led politicalprocess leading to a transition can be achieved onlythrough broad national dialogue that meets thelegitimate aspirations of all sections of Syrian societyand respect for Syrian independence, territorialintegrity and sovereignty as expressed by theGeneva Joint Communiqué and appropriate UNSCresolutions. We support the efforts of the UN-League

of Arab States Joint Special Representative. In viewof the deterioration of the humanitarian situation inSyria, we call upon all parties to allow and facilitateimmediate, safe, full and unimpeded access tohumanitarian organisations to all in need ofassistance. We urge all parties to ensure the safety ofhumanitarian workers.

We welcome the admission of Palestine as anObserver State to the United Nations.We areconcerned at the lack of progress in the Middle EastPeace Process and call on the internationalcommunity to assist both Israel and Palestine to worktowards a two-state solution with a contiguous andeconomicallyviable Palestinian state, existing side byside in peace with Israel, within internationallyrecognized borders, based on those existing on4 June 1967, with East Jerusalem as its capital.We aredeeply concerned about the construction of Israelisettlements in the Occupied Palestinian Territories,which is a violation of international law and harmfulto the peace process.In recalling the primaryresponsibility of the UNSC in maintaininginternational peace and security, we note theimportance that the Quartet reports regularly to theCouncil about its efforts, which should contribute toconcrete progress.

We believe there is no alternative to anegotiated solution to the Iranian nuclear issue. Werecognise Iran´s right to peaceful uses of nuclearenergy consistent with its international obligations,and support resolution of the issues involvedthrough political and diplomatic means and dialogue,including between the International Atomic EnergyAgency (IAEA) and Iran and in accordance with theprovisions of the relevant UN Security CouncilResolutions and consistent with Iran’s obligationsunder the Treaty on the Non-Proliferation of NuclearWeapons (NPT). We are concerned about threats ofmilitary action as well as unilateral sanctions. Wenote the recent talks held in Almaty and hope that alloutstanding issues relating to Iran’s nuclearprogramme will be resolved through discussions anddiplomatic means.

Afghanistan needs time, developmentassistance and cooperation, preferential access toworld markets, foreign investment and a clear end-





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state strategy to attain lasting peace and stability. Wesupport the global community’s commitment toAfghanistan, enunciated at the Bonn InternationalConference in December 2011, to remain engagedover the transformation decade from 2015-2024. Weaffirm our commitment to support Afghanistan’semergence as a peaceful, stable and democratic state,free of terrorism and extremism, and underscore theneed for more effective regional and internationalcooperation for the stabilisation of Afghanistan,including by combating terrorism. We extend supportto the efforts aimed at combating illicit traffic inopiates originating in Afghanistan within theframework of the Paris Pact.

We are gravely concerned with thedeterioration in the current situation in the CentralAfrican Republic (CAR) and deplore the loss of life.We strongly condemn the abuses and acts ofviolence against the civilian population and urge allparties to the conflict to immediately cease hostilitiesand return to negotiations. We call upon all parties toallow safe and unhindered humanitarian access. Weare ready to work with the international community toassist in this endeavour and facilitate progress to apeaceful resolution of the conflict. Brazil, Russia andChina express their sympathy to the South Africanand Indian governments for the casualties that theircitizens suffered in the CAR.

We are gravely concerned by the ongoinginstability in the Democratic Republic of the Congo(DRC). We welcome the signing in Addis Ababa on24 February 2013 of the Peace, Security andCooperation Framework for the Democratic Republicof the Congo and the Region. We support itsindependence, territorial integrity and sovereignty.We support the efforts of the UN, AU and sub-regional organisations to bring about peace, securityand stability in the country.

We reiterate our strong condemnation ofterrorism in all its forms and manifestations andstress that there can be no justification, whatsoever,for any acts of terrorism. We believe that the UN hasa central role in coordinating international actionagainst terrorism within the framework of the UNCharter and in accordance with principles and normsof international law. In this context, we support the

implementation of the UN General Assembly GlobalCounter-Terrorism Strategy and are determined tostrengthen cooperation in countering this globalthreat. We also reiterate our call for concludingnegotiations as soon as possible in the UN GeneralAssembly on the Comprehensive Convention onInternational Terrorism and its adoption by allMember States and agreed to work together towardsthis objective. We recognize the critical positive rolethe Internet plays globally in promoting economic,social and cultural development. We believe it’simportant to contribute to and participate in apeaceful, secure, and open cyberspace and weemphasise that security in the use of Information andCommunication Technologies (ICTs) throughuniversally accepted norms, standards and practicesis of paramount importance.

We congratulate Brazil on hosting the UNConference on Sustainable Development (Rio+20) inJune 2012 and welcome the outcome as reflected in“The Future we Want”, in particular, the reaffirmationof the Rio Principles and political commitment madetowards sustainable development and povertyeradication while creating opportunities for BRICSpartners to engage and cooperate in the developmentof the future Sustainable Development Goals.

We congratulate India on the outcome of the11th Conference of the Parties to the United NationsConference on Biological Diversity (CBD COP11) andthe sixth meeting of the Conference of the Partiesserving as the Meeting of the Parties to the CartagenaProtocol on Biosafety. While acknowledging thatclimate change is one of the greatest challenges andthreats towards achieving sustainable development,we call on all partiesto build on the decisions adoptedin COP 18/CMP8 in Doha, with a view to reaching asuccessful conclusion by 2015, of negotiations on thedevelopment of a protocol, another legal instrumentor an agreed outcome with legal force under theConvention applicable to all Parties, guided by itsprinciples and provisions.

We believe that the internationally agreeddevelopment goals including the MillenniumDevelopment Goals (MDGs) address the needs ofdeveloping countries, many of which continue to facedevelopmental challenges, including widespread





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poverty and inequality. Low Income Countries (LICs)continue to face challenges that threaten theimpressive growth performance of recent years.Volatility in food and other commodity prices havemade food security an issue as well as constrainingtheir sources of revenue. Progress in rebuildingmacro-economic buffers has been relatively slow,partly due to measures adopted to mitigate the socialimpact of exogenous shocks. Many LICs arecurrently in a weaker position to deal with exogenousshocks given the more limited fiscal buffers and theconstrained aid envelopes, which will affect theirability to sustain progress towards achieving theMDGs. We reiterate that individual countries,especially in Africa and other developing countries ofthe South, cannot achieve the MDGs on their ownand therefore the centrality of Goal 8 on GlobalPartnerships for Development to achieve the MDGsshould remain at the core of the global developmentdiscourse for the UN System. Furthermore, thisrequires the honouring of all commitments made inthe outcome documents of previous majorinternational conferences.

We reiterate our commitment to work togetherfor accelerated progress in attaining the MillenniumDevelopment Goals (MDGs) by the target date of2015, and we call upon other members of theinternational community to work towards the sameobjective. In this regard, we stress that thedevelopment agenda beyond 2015 should build onthe MDG framework, keeping the focus on povertyeradication and human development, whileaddressing emerging challenges of developmenttaking into consideration individual nationalcircumstances of developing countries. In this regardthe critical issue of the mobilization of means ofimplementation in assisting developing countriesneeds to be an overarching goal. It is important toensure that any discussion on the UN developmentagenda, including the “Post 2015 DevelopmentAgenda” is an inclusive and transparent inter-Governmental process under a UN-wide processwhich is universal and broad based. We welcome theestablishment of the Open Working Group on theSustainable Development Goals (SDGs), in line withthe Rio+20 Outcome Document which reaffirmed the

Rio Principles of Sustainable Development as thebasis for addressing new and emerging challenges.We are fully committed to a coordinated inter-governmental process for the elaboration of the UNdevelopment agenda.

We note the following meetings held in theimplementation of the Delhi Action Plan:

• Meeting of Ministers of Foreign Affairs onthe margins of UNGA.

• Meeting of National Security Advisors inNew Delhi.

• Meetings of Finance Ministers, and CentralBank Governors in Washington DC andTokyo.

• Meeting of Trade Ministers in PuertoVallarta.

• Meetings of Health Ministers in New Delhiand Geneva.

We welcome the establishment of the BRICSThink Tanks Council and the BRICS BusinessCouncil and take note ofthe following meetings whichwere held in preparation for this Summit: •FifthAcademic Forum•Fourth Business Forum•ThirdFinancial Forum

We welcome the outcomes of the meeting ofthe BRICS Finance Ministers and Central BankGovernors and endorse the Joint Communique of theThird Meeting of the BRICS Trade Ministers held inpreparation for the Summit.

We are committed to forging a strongerpartnership for common development. To this end,we adopt the eThekwini Action Plan. We agree thatthe next summit cycles will, in principle, follow thesequence of Brazil, Russia, India, China and SouthAfrica. Brazil, Russia, India and China extend theirwarm appreciation to the Government and people ofSouth Africa for hosting the Fifth BRICS Summit inDurban. Russia, India, China and South Africaconvey their appreciation to Brazil for its offer to hostthe first Summit of the second cycle of BRICSSummits, i.e. the Sixth BRICS Summit in 2014 andconvey their full support thereto. eThekwini ActionPlan:

1. Meeting of BRICS Ministers of ForeignAffairs on the margins of UNGA.

2. Meeting of BRICS National Security





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Advisors. 3. Mid-term meeting of Sherpas and Sous-

Sherpas. 4. Meetings of Finance Ministers and Central

Bank Governors in the margins of G20meetings, WB/IMF meetings, as well asstand-alone meetings, as required.

5. Meetings of BRICS Trade Ministers on themargins of multilateral events, or stand-alonemeetings, as required.

6. Meeting of BRICS Ministers of Agricultureand Agrarian Development, preceded by apreparatory meeting of experts on agro-products and food security issues and theMeeting of Agriculture Expert WorkingGroup.

7. Meeting of BRICS Health Ministers andpreparatory meetings.

8. Meeting of BRICS Officials responsible forpopulation on the margins of relevantmultilateral events.

9. Meeting of BRICS Ministers of Science andTechnology and meeting of BRICS SeniorOfficials on Science and Technology.

10. Meeting of BRICS Cooperatives. 11. Meetings of financial and fiscal authorities

in the margins of WB/IMF meetings as wellas stand-alone meetings, as required.

12. Meetings of the BRICS Contact Group onEconomic and Trade Issues (CGETI).

13. Meeting of the BRICS Friendship Cities andLocal Governments Cooperation Forum.

14. Meeting of the BRICS Urbanisation Forum.15 .Meeting of BRICS Competition Authorities

in 2013 in New Delhi. 16. 5th Meeting of BRICS Heads of National

Statistical Institutions. 17. Consultations amongst BRICS Permanent

Missions and/or Embassies, as appropriate,in New York, Vienna, Rome, Paris,Washington, Nairobi and Geneva, whereappropriate.

18. Consultative meeting of BRICS SeniorOfficials in the margins of relevantsustainable development, environment andclimate related international fora, whereappropriate.

New areas of cooperation to be explored-BRICS Public Diplomacy Forum. -BRICS Anti-Corruption Cooperation.

- BRICS State Owned Companies / StateOwned Enterprises.

- National Agencies Responsible for DrugControl.

- BRICS virtual secretariat. - BRICS Youth Policy Dialogue. - Tourism. - Energy. - Sports and Mega Sporting Events.

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⇒ 100TH

INDIAN SCIENCE CONGRESS AT KOLKATA

On 3 January 2013, the Prime Ministerannounced the new Science,technology and Innovations (STI)

policy to a packed audience at the 100th session ofthe Indian Science Congress held in Kolkata.

The policy seeks to increase applications ofresearch and development through new methods ofpublic private participation, increase participation ofyouth in scientific development of the country andpromote the spread of scientific temper amongvarious sections of the society.

The fourth science policy of the country thatis expected to change the way science education,research and innovation is done in the countryreceived its fair share of limelight given that it was

announced at the centenary celebrations ofthe oldest science event in the country, The limelightgives the public an opportunity of scrutinizing thepolicy,Focal Theme Panel Discussion

Announcing the aspirations of the policy toposition India among the top five global scientificpowers by the year 2020, the Prime Minister threwopen the panel discussion on what should be doneto ensure that science plays a crucial role in shapingthe future of India.

John Beddington, the Chief Scientific advisorof the Government of UK emphasized that Indianeeds to take steps to deal with climate change thatis likely to affect India severely in the long run, Hesaid that for doing so, energy security and disastermanagement were two of the most crucial Issues that

need to be addressed. Elaborating on the steps thatneed to be taken to tackle problems like food securityin the climate change era, Prof, M.S, Swaminathan,Emeritus Chairman of MS Swaminathan ResearchFoundation, pointed out that new technology isnecessary to cope up with the change and robustand transparent regulatory mechanisms should be setup to evaluate such technologies and monitor theirevolution.

Dr R, Chidambaram, chief scientific advisor tothe government of India, elaborated on the relevanceof developing alternative energy sources to tacklethese changes while Dr K, Kasturirangan, member ofthe planning commission, highlighted the ambitiousnature of the 12th five year plan in this context, Prof,Samir Brahmachari, Director-General, Council ofScientific and Industrial Research, stressed thatencouraging young leaders in science would help ingenerating new ideas that are necessary to solve thecomplex nature of problems science Is expected tosolve today. While summing up the session MSJaipal Reddy, the minister for science and technology,however, pointed out that given India’s track recordin teh 11th plan, it was not very difficult for India totry and reach the target. He stressed on focusing ondevelopment of innovative ecosystems.

It is with the objective of attracting ryoungtalents to develop innovative ecosystems that thecongress deliberated on ways of reforminguniversities to shape such talents.

⇒ RECOMMENDATIONS OF THE CONGRESS

The five-day deliberations each year lead to aset of recommendations on that should be done toimprove the role of science in shaping the future ofthe country. The list released this year included:

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(1) Special efforts to attract talent and develophuman resource, encourage youthfulleadership in the science sector,

(2) Readjust governance system of universitiesto rejuvenate research in the academic sector,

(3) Link discovery processes to problem solvingresponsibilities,

(4) New models for international collaborations,(5) Suitable strategy and roadmap for meeting

the challenging needs of food nutrition,energy, environment, water and sanitation.

The recommendations also included enhancingthe public outreach of science through effectivecommunication with a focus on political and publicunderstanding of science and the ramifications ofnew and emerging technologies of relevance tosocial problems. The recommendations werediscussed in detail in a session on networking andgovernance. It emerged that human resourcedevelopment and encouraging young leadership inscience were the key areas of concern.

The panel consisting of Dr. T. Ramasami,Secretary, Department of Science and Technology,Prof. Samir Brahmachari, Director General of CSIR, Dr.M. Rajeevan, head of India’s monsoon mission, Dr.R.R. Navalgund, Honourary Vikram SarabhaiProfessor at the Indian Space Research Centre atBangalore and directors of some of the laboratoriesof CSIR, discussed steps like stepping up thenational geospatial governance, and moreinvolvement of interested youth in research at anearly stage.

Dr. R.R. Navalgund emphasized that we shouldnot stop only at recommendations but also prioritizethem and design a roadmap of how to materialize suchrecommendations.

In 1980, the Department of Science andTechnology set up a task force to take therecommendations of each year’s science congressforward. It was to involve representatives of theIndian Science Congress Association (ISCA) andchiefs of different agencies and voluntaryorganizations chaired by Secretary, DST, for followingup the recommendations on the Focal Themeintroduced by the congress in 1976. However,according to sources the task force was discontinued

later. This year, however, the recommendationsindicated an attempt to resurrect the task force. “Asmall committee of five may be constituted to capturethe major recommendations emanating from the 100thsession of the Indian science congress in a timebound manner,” it said.

Despite the fact that several eminent scientistshave time and again pointed at certain lacunae in theconduct of the annual sessions of the Indian ScienceCongress, yet it still remains the science conferencethat the media takes interest in, reflecting that theinterest of the common people in the conferenceremains undiminished even after 100 years. Thecongress can take advantage of this and reorient itselfto improve the quality of deliberations and make itinteresting and relevant to the practicing scientistalso. Only then will the initial objective of promotingscience with which it was set up be served.

⇒ PLANTS BEHAVE A LOT LIKE HUMANS!Does the title sound storage to you? Well, let

us be clear, it humans carry their intelligence on theirsleeves, plant carry them on the plants has unfoldeda wider spectrum of possibilities.

Rescinding the myth of a passive plant world,the secret world of plants reveals a landscapepulsing with sex, movement. Communication andsocial interaction. This is a world where plants talk.Forage, wage war and protect their kin; a world whereplants behave a lot like us.

Recently, scientists observed how Dandelionsreacted to the passing of a lawn mower. The closer itgets, the more the blossom heads seem to hunkerdown closer to the ground. Yet an hour or so later. thestems are again at full height. Two researchers at theUniversity of Alberta found plants with similarforaging strategies. These plants get their nutrientsfrom their root tips and roots produce more tips whenthey hit a patch of nutrient-rich soil!

Plants engage in activities such aseavesdropping on each other and can detectchemical compounds released by their neighbourswhen under attack from hungry caterpillars so theycan marshal their own defences.

While humans are enthralled into amassingmoney and smothering the fire of their bellies. plantsare dynamic and highly sensitive organisms that




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actively and competitively forage for limited resourcesboth above and below the ground. They accuratelycompute inputs from the environment, usesophisticated cost-benefit analysis, and take action tomitigate diverse environmental insults, which involvesthe acquisition and processing of information.Informational terminology assists in the concepts oflearning, memory and intelligence in plants,capabilities that they are rarely credited with.

Plants are also capable of refined recognition ofself and non-self, and are territorial in behaviour. Thisview portrays plants as information processingorganisms with complex, long-distancecommunication systems within their body, whichextends into the surrounding ecosystem. Plantsdisplay all the necessary “components” of intelligentbehaviour (assuming that their plastic, flexibledevelopment is behaviour). In particular, they surely

do exhibit individual variability and adaptations.Moreover, they continuously record and evaluate acomplex field of external stimuli, forming therebysomething which could be described as an “innerrepresentation” or a “cognitive map” of theenvironment, including information about qualitativeand quantitative aspects of light conditions,humidity, temperature and other biotic and abioticenvironmental inputs.

Plants store a wealth of data about their historyin the structure of their bodies. Given the permanentcharacter of cell walls, every branch and twig holdsinformation about the past. The “memory of winter”involved in seasonally dependent acquisition offlowering competence (vernalization) has been traceddown to complex epigenetic regulation of the geneencoding a specific transcription factor (FLC) inArabidopsis.

REGISTRATION FOR NEW INDIAN CATTLE BREEDS

The National Bureau of Animal Genetic Resources, Karnal (NBAGR) is the nodal agency for theregistration of newly identified germplasm of the livestock and poultry of the country. For the first time,indigenous pig and donkey breeds have been registered by NBAGR. The Breed Registration Committeehas approved registration of nine new breeds of livestock species.Newly identified breeds are custom-made for the local climate and thrive better in adverseenvironmental conditions and food shortage. Indigenous breeds also have exclusive characters likedisease resistance, better quality of milk and meat etc. The newly registered breeds are:Malnad Gidda: Malnad Gidda cattle breed is native of Western Ghats in Karnataka.The word gidda denotes dwarf and Malnad denotes a place receiving high rainfall. This breed isdistributed predominantly in Malnad areas of Shimoga, Hassan, Chikmangalur and adjacent coastaldistricts of Mangalore, Udupi, North Kanara and parts of Kodagu district of Karnataka. The animalsare small in size with a compact body frame weighing 80-120 kg. The animals are active and resistantto major diseases such as foot and mouth disease. This breed yields 0.5 to 4 litres of milk per day witha fat content of 5.5 to 8 percent. The animals remain in milking for about 250 days in a year. Theaverage lifespan of an adult animal is 9-12 years.Kalahandi buffaloes: Medium sized, very hardy, dual type breed, well known for longevity, these buffaloesare seen in the Gajapati district and partsof Ganjam and Rayagada district in Orissa, and also the adjoining hilly regions of Andhra Pradesh.Besides the use of this buffalo for milk and draft purpose, the horns are used in making handicrafts andhousehold items. These buffaloes are known for their working ability and disease resistance in thenative tract. Male buffaloes weigh up to 380 kg and females 350 kg.Puliculam cattle: The Pulikulam breed or Jallikkattu breed of cattle is found in Madurai, Sivaganga,




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Virudhunagar, Theni and also the Cum bum valley and the Periyar River. Compact with stout legs andhard feet, the animals have powerful loins, shoulders and neck, useful for doing hard work. This breedis more resistant to communicable and parasitic diseases as compared tocrossbreds under hot and wet conditions. Famous for their high endurance levels, they are commonlyused in the hugely popular Jallikattu (bull taming) sport in South Madurai during Pongal. About45,000 of the animals exist now and are maintained as migrating herds. Kosali cattle: Kosali is smallsized, draft purpose cattle breed of Chhattisgarh. Farmers prefer bullocks of this breed for cleaning ofweeds from paddy field. Animals are known for their efficient working ability and high resistance todisease.Konkan Kanyal goat: Konkal Kanyal goat is meat type breed adapted to high rainfall and the hot andhumid climate of Konkan region in Maharashtra. Animals have typical white bands on black face andblack ear with white margin. Adult males weigh 40-45 kg and adult females weigh 32-35 kg.

Konkan Kanyal goatBerari goat: Found in Nagpur and Wardha district of Maharashtra and Ninar district of MadhyaPradesh. Berari goat is also reared mainly for meat purpose in Vidarbh region of Maharashtra. Theseare tall and dark coloured breeds. A unique feature is that animals have light to dark strips on lateralsides from horn base to nostrils of face. Doe yields about 0.6 litres of milk per day.Ghungroo pig: Ghungroo an indigenous strain of pig first reported from North Bengal. It is popularamong the local people because of its ability to sustain in low input system. Faster growth rate,consumers preference and adaptability to low management are some of the excellent characteristicsexhibited by this breed. This breed produces high quality pork utilizing agricultural by-products andkitchen wastes. Ghungroo pigs are mostly black coloured with typical bulldog face appearance, witha litter size of six to twelve. Both sexes are very much docile and easy to handle.Niang megha: Niang Megha is a pig breed from Garo, Khasi and Jaintia hills of Meghalaya, rearedfor its pork and hair. The animals have typical wild look with erect hairs on dorsal midline and smallerect ears extended vertically.Spiti donkey: Spiti donkey is found in Lahaul and Spiti region of Himachal Pradesh. The breed isutilized for transportation at high altitude area with low levels of environmental oxygen. These animalscan survive well in scarcity of feed and fodder during harsh winter months when the area is completelysnow-bound.





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8. flfoy lfoZlst ,IVhV~;wM VsLV ¼fgUnh½ xkbM `390

9. CSAT Comprehensive Manual `650

10. India–2011 `230

11. General Studies Preliminary Examination Topic Wise Solved Question Paper (1995-2011) `250

12. la?k yksd lsok vk;ksx lkekU; v/;;u ¼izkjafHkd ijh{kk½ fo"k;okj gy iz'u&i=k ¼2001&2011½ `190

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16. A Comprehensive Guide for SSC Graduate Level Examination `360

17. Bank PO Planner `245

18. Bank PO Practice Set `280

19. S.B.I. Probationary Officer (Recruitment Examination 2011) `210

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