GS 3

Document @ New Delhi
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Cyber security
File
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Tax reforms in budget

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Transformational agenda in tax proposals -
Relief to small tax payers

Boost growth and employment generation
Incentivising make in India
Moving towards pensioned society
Affordable housing
Agri, rural economy and clean environment
Reducing litigation and providing certainty in taxation
Tax simplification and rationalisation
Use of technology for creating accountability
Npa issue
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Reasons for NPA in banks
1 psbs have greater exposure to stressed sect like mining aviation and infra
2. Lack of accountability.
3 . global economic slowdown
4. Government influence
5. Certain grey sectoral advances like education loans and agri loans
6 lack of a bankruptcy code
7 ARCs not functioning in full capacity
reforms in civil aviation

Author: agam612@gmail.com
Topic: Infrastructure airports; Indian economy growth and development
7) Recently, the union government proposed key civil aviation reforms. Discuss the significance of these reforms. (200 Words)
The recent reforms proposed by the union governement are--
1-RELAXATION OF FDI CAP FROM 49%- this will improve competition,increase empoyemnt ,better services for the customers at lower prices,will reduce the monopoly of the domestic players in the aviation
sector who sway the prices in
thier own benefit.
2-REGIONAL CONNECTIVITY SCHEME-this will help provide air flight facilities to the non metro cities ,will decrese the transit time etc
3-REGIONAL CONNECTIVITY CESS-this will be used to develop no frills airports in the non metro cities.
4-relaxing 5/20 RULE- will help improve international connectivity and full fill foreign commitments like governmet plan to improve air connectivity between france ,vietnam etc
5-AUCTIONING OF BILATERAL RIGHTS-Bilateral landing rights is a measure by the government to restrict the landing of a particular aircrafts only. OPENSKY the need of hour and a policy propped by indian
gov .
Awareness in Space; Achievements of Indians in S&T

Awareness in Space; Achievements of Indians in S&T
7) Discuss the nature of collaboration between the National Aeronautics and Space Administration (NASA) and the Indian Space Research Organisation (ISRO), their achievements and future projects.
ANS DISCUSS NISAR Project NASA-ISRO SYNTHETIC APERTURE

RADAR.
MOM(mars orbiter misson) AND MAVEN(mars atmosphere and volatile evolution spacecraft)
Cooperation in form of US- India Civil Space joint working group.
Asia-pacific remote sensing symposium.
Ipr problems in india

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Ipr problems as cited by usa-
Absence of specific ip rights for life sciences sector

Weak enforcement environment
Lack of mechanism to effectively combat online piracy
Flawed data protection norms
Non participation in the international ipr related treaties
High speed railways

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Benefits -
1. Reduced journey times impacting individuals and businesses.

2. Connectivity benefits to population and markets
3. Increased passenger comfort
4. Mode shift from polluting road and air travelling consequently lower road congestion
5. Agglomeration benefits which accrue from clustering together of firms and labour markets.
6. Opportunity for employment and potential for technology transfer.
Demerits -
1. Environmental degradation
2. Dislocation of people
3. Noise pollution
4. Regionally imbalanced development
5. Higher costs
6. Competition from lower waged flights
Commission on data privacy

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The need of the hour is a comprehensive legislation that provides for a right to privacy as a fundamental entitlement to citizens. The groundwork for such legislation has already been laid in 2012 by a
Justice A.P. Shah-headed group of experts constituted by the Planning Commission. The commission had proposed a set of national privacy principles that would place an obligation on data controllers to
put in place safeguards and procedures that would enable and ensure protection of privacy rights. These include: notice (to be given to users while collecting data); choice and consent (of users while
collecting data from them); collection limitation (to keep user data collected at the minimum necessary); purpose limitation (to keep the purpose as adequately defined and narrow as possible); access and
correction (for end users to correct or delete their personal data as may be necessary); disclosure of information (private data should not be disclosed without explicit consent of end user); security
(defining responsibility to ensure technical, administrative and physical safeguards for data collected); openness (informing end users of possible collection and utilization of personal data); accountability
(institutionalize accountability for adherence to these principles).
Until such provisions are established by law, it will be necessary to adopt mechanisms that ensure compliance towards use of privacy enhancing technologies (PET). PETs are essentially processes and tools
that allow end users to safeguard the privacy of their personally identifiable information that they willingly provide to government agencies and other service providers.
FATF recommendations on money laundering

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Discuss the the Financial Action Task Force (FATF) recommendations to stop money laundering and steps taken by India on these recommendations.
The recommendation of FATF on money-laundering(ML) can be seen under the following heads
1. Legal
(i) Legislations to criminalize ML in accordance with Vienna and Palermo Convention of UN
(ii) Provisions for attaching property, assets etc. of entities involved in ML
2. Financial
(i) Strengthening of regulatory mechanism for financial institutions
(ii) Enhanced diligence and record-keeping of financial institutions
3. Institutional
(i) Setting up a Financial Investigating Unit for information acquiring and analysis
(ii) Measures to prevent unlawful use of legal persons
4. International Cooperation
(i) Measures to prevent any avenue for tax-evasion, attachment of foreign properties etc.
(ii) Render mutual legal assistance or extradition
Steps taken by India are

1. Legal
(i) Legislating the Prevention of Money Laundering Act
(ii) Enactment of FEM Act to restrict foreign currency outflow
2. Financial
(i) Setting up the Financial Stability and Development Council to coordinate Indias international interface with FATF, Financial Stability Board etc.
(ii) Launching of the National Risk Assessment exercise to identify sectors susceptible to ML
3. Institutional
(i) A Financial Investigating Unit has been setup as an independent body
(ii) The Aadhar Scheme was implemented to prevent impersonation and in the process prevent ML
4. International cooperation
(i) Signing OECDs Multilateral Competent Authority Agreement on tax evasion
(ii) Directing SEBI to closely scrutinize FII, especially through P-notes
Maize: the grown crop

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The fact is that maize has beaten most other food crops, including wheat and rice, in terms of growth in production and productivity, especially in recent years. Examine the factors that have led to Maizes
success and its benefits for Indian economy. (200 Words)
Following reasons are responsible for this:

1) Technological advancement to to enhance protein quality, raise beta-carotene (vitamin A) content and impart greater resistance against diseases and weather-induced stresses such as drought.
2) expansion in crop area+spread to new states like Tamil Nadu, Maharashtra etc
3) better crop management
4) use of hybrid varieties like sweetcorn, popcorn, baby corn and protein-upgraded corn
5) From a kharif crop it has evolved to be grown throughout the year.
It has a number of commercial uses as listed below, which have been beneficial for indian economy :
1) Only 23 per cent of maize output is consumed as food; the rest is used as feed for poultry (more than 50%), livestock and fish, or for producing starch and brewery products.
2) Between 3.5 and 5 million tonnes of maize is exported annually to South-east Asian countries.
3) development of Sweetcorn and baby corn have opened up huge european markets.
With further research, development of better protein rich varieties and disease+climate change resistant hybrids, maize is not only beneficial for Indian economy but could also be an answer to
malnourishment.
Reforms in electricity sector.

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How the electricity sector could be made profitable -
Uday is nice initiative.
First, paying for electricity is a habit that needs to be inculcated and reinforced by a publicity campaign, which should include celebrities, community, social and religious leaders. Second, if electricity is to be
elevated to a basic right, then its cost must be explicitly factored into the national budget, and not left to the states. An approach similar to the food security legislation can be taken. Third, with technology,
we can offer a targeted P and Q subsidy, which is a combination of subsidized price and a rationed quantity. This ensures that the total subsidy is capped. Fourth, we need to experiment with the concept of
prepaid cards for electricity. This may need some support from regulation and law enforcement, if automatic disconnection is the penalty for exceeding the prepaid limit. Fifth, we need more and genuine
competition, especially in distribution. Has the open access policy promised by the 2003 reforms been implemented? Sixth are a slew of demand side management measures, which can reduce or optimize
demand.
sez:problems
Do you think SEZ policy has been a complete failure? Critically discuss.
The Chinese SEZs that were critical for the development of an export-driven economy inspired the Special Economic Zone model in India. Yet, the recent report paints a dull picture of the outcome of our
SEZ policy.
Importance of SEZ policy

1. A surge in manufacturing and export base would contribute to creation of jobs in India.
2.The policy continues to be relevant from a Make in India perspective
Reasons for the failure of SEZ policy

1.The introduction of Minimum alternate tax and Dividend distribution tax have neutralized income tax benefits
2.The absence of complementary infrastructure to support the SEZ
3.The lack of proactive assistance from development officials
4.The export incentives granted to industries outside the zones have not been extended to the SEZ thus making them less attractive to invest in
5.The free trade agreements signed with other countries have garnered an edge over the SEZs
Way forward
1.Rather than withdrawing MAT and DDT, discussions must be made on the level at which they can be levied.
2.A more predictable taxation policy for making the environment conducive for investment.
3.The creation of complementary infrastructure, power, roads and ports
sdg vs mdg
1. zero goals- mdgs aimed at reaching half way while sdg want complete elimination by 2030.
2. universal goals- mdg aimed at "rich aiding poor" while sdg are equally for all.
3. more comprehensive goals- 17 goals with 169 criteria.
4. inclusive goal setting- mdg were based on top down approach. in sdg, all were consulted
5. distinguishing hunger and poverty- not distinguished in mdg
6. funding- voluntary funding was aimed in mdg which didnt succeed much. in sdg, nations are aspired to seek self revenue
7. peace building- to let goals succeed, peace is necessary in conflict areas and thus, included in sdg.
8. data revolution- in sdg, by 2020 the data will be collected in order for better monitoring, accountability and transparency.
9. quality education- mdg focused on quantity while sdg on quality too.
bad issues related to e commerce.

Although e commerce presents goldmine of opportunity it can also prove to be landmine.
some issues such as

1)Tax evasion- laws of land have been evaded recently kerala ,karnatka banned firms on issue of service tax,octroi,cash on delivery etc.
3)predatory pricing tactics and anti competitive practices- adopted by e commerce firms have been challenged by federation of booksellers and publishers to competition commission of india(FPBAI)
and CAIT.
4)security issues- threat to be used by terror networks looms large in absence of surveillance and reliable audits.
5)E-commerce websites dealing with online pharmacies, online gamming and gambling, online selling of adult merchandise, etc are openly and continuously violating the laws of India,
including the cyber law of India.
6)consumer protection and privacy issues ,juridiction issues are also at threat.
thus the time to regularize e commerce in india has come tax laws,consumer protection laws,cyber security laws needs new level of infrastructure and man power for their effective
compliance,institutionalized mechanism on lines of TRAI,SEBI is need of hour or ED may be enhanced to comply with required needs.
mains expedition...
$ indian finance code-
-sabse pehle bank kya kya karta h-
monetary policy
financial stability
forex
deposit insurance and credit guarantee
banking regu;lations
nbfc regulations
payment and settlement system
-ifc me monetary policy committee ki baat hai. to remove the conflict of interest. however, rbi will be incharge of monetary policy via mpc.
-there will be a proposed finance authority for supervision of nbfc, activities in forex, derivatives and govt securities.
-finance stability and development council- to foster stability and relience in system.
-public debt manangemetn agency.
-resolution corp taking role of dicgc.
rbi, irda, sebi ko amalgamate karke proposed h financial authority with rbi being first among equals.
-key question-what is broken that ifc is trying to fix?
$ freight corridors-
-eastern-ludhiyana to dankuni,wb
-western-mumbai to dadri.
why not completed-
-poor infra
-huge cost owing to time lapse
-slow decision making process
land acquisition
$ constraints holding back investment-

-environmental laws
-land acquisition laws
-ppp projects' structure
-high indebtness of infra companies
while first two are legislative constraints, latter two lie in govt purview alone.
aur bi h-
-global slowdown
-stressed bank assets
-charging high interst rates
-low profitability for corporates
actions to be taken-
-reduce interst rates
-infra projects require attention. pm could do it with pragati initiative
-national asset management company for taking npa off banking sheets
-4 R's-regulation. risk allocation, renegotiation, resourcing
-need to shift from sequential to simultaneous approvals system. (niti could help)
- certain rules of companies act need to be reviewed carefully
-attention towards credit system for SMEs
-incentives for r&d
-set up of special purpose vehicle under make in india under pppin building a knowledge economy
-dispute resolution mechanism.
$ change in base year-

why-
indicators are fluid.

new classification system
changes in ways of data compilation
new sources of data to be factored in.
what is incorporated-
corporate sector covered comprehensively

partnership firms covered
activities of rual and urban local bodies covered
informal sector- manufacturing and services- tried to be covered.
check this too-
ecently the base year of GDP calculation has been changed from 2004-05 to 2011-12. The changed methodology is as under:
-Now GDP will be calculated at Market price at fixed price replacing factor cost at fixed price.
-This move is to take into account gross value addition in goods and services as well as indirect taxes.
- Trade of manufactured goods will come under the manufacturing sector earlier it was in service sector. New activities like recycling industries have also been included.
-GDP data will now be based on more than 5 lac companies under MCA-21 scheme.
This move is to cater the growing demand of harmonizing Indian economy with the global economy. However, this change has trigger debate since its inception. This could be understanding as under:
-The economic growth rate of the year 2012-13 was 5% and in 2013-14 it is 6.6%, however the rate of capital formation has declined (37% to 33%).
-There is deflation in country but data is showing increase in the demand(inflation).
Changes in the GDP are not reflecting the other sectors like profitability of companies and tax collection.
-The chief economic adviser and RBI governor both have expressed their concerns on this however, looking at the growing integration of Indian economy with world economy and under the provision of
National System of Accounting of UN and IFSR of IMF this change was necessary.
$ 7th pay commission-

critics point-
-will wreck havoc on govt finances.
truth-impact will be quite low. nearly .8%
-such pay revisions are okay only when govt downsizes workorce.
-pay increases must be linked to productivity.
-pay scales applicable in lower levels of govt are higher than those in pvt sector.
but this is shortcoming of pvt sector caused by contract labor and lack of unionisation.
$ problems in aviation-
-high taxation
-high operating cost
-lower purchasing power of hindustani.
-aviation turbine fuel is 60% more costlier than competing hubs like middle east.
what to do-
-industry needs tax holiday
-union should review the practice of posting non-aviation personnel at top of aviation like moca (ministry),aai, pawanhans.
-bureaucrates should undergo 2 years training before taking charge
-encouraging local manufacturing
-set up independent aeronautical commission and empowered to change policies and procedures.
-5/20 rule and route dispersal guidelines must be abolished.
-new airports
-changes in maintenance, reform and operation (mro), air cargo,helicoptors, private jets and training.
$ cyber space-
what india can do-
-should host international coference to build on law for cyber warfare on basis of tallinn manual, which is the only source document available on international guidelines for cyber warfare.
-must push for an international court to prosecute trasnnational cyber crimes
-should promote attempts to create international data protection law that facilitates quick info sharing with multinational co.
$ ways of restricting online info by govt-

- content wise
-medium wise-govt can request ISPs to block access to website
-devise wise- govt could ask phone manufacturer to create block doors for monitoring and filtering content.
all three could be counter productive. website could park its domain elsewhere;ISP could use proxy server;online back doors could be dangerous coz security so created could be exploited by some others
except govt.
thus, sustained dialogue from both parties is important in this case.
$ cash transfer-
-problems-
it depends on identification of potential beneficiaries but such lists cannot be treated as final anytime.
by deciding the quantum of money, states are like deciding how much money a poor needs to survive. further, inflation could affect it.
merely transferring money is not equivalent to transferring material into their hands. at times, infra hi nahi hota ki material purchase kar sake.
leakages and theft
inadequate investment into welfare programs
shortage of trained technical personnels
lack of grievance redress mechanism
poverty elimination requires sustained input options and not just money
$ mission indradhanush for psbs-

The seven elements include appointments, board of bureau, capitalisation, de-stressing, empowerment, framework of accountability and governance reforms.
child marriage: nirantar report..

mind map
public debt management agency

SourceURL: http://disqus.com/embed/comments/?base=default&version=db7a376d74cfe33ef34611033adae087&f=insights20&t_i=56468%20http%3A%2F%2Fwww.insightsonindia.com%2F%3Fp%3D5646
t%2F&t_e=5)%20Recently%20there%20was%20controversy%20regarding%20the%20proposal%20to%20establish%20the%20Public%20Debt%20Management%20Agency%20(PDMA)%20by%20the%20gov
Topic: Indian Economy planning, growth
5) Recently there was controversy regarding the proposal to establish the Public Debt Management Agency (PDMA) by the government. Many
economists argue that it is prudent to leave debt management to the RBI alone. Analyse the issue. (200 Words)
--The governments intention to set up a Public Debt Management Agency (PDMA) is not only required for the development of the bond market in the country, but it would also prevent leakages of public
funds.
--But some economists argue against it, as the fiscal discipline can be handled by the RBI too in a similar way. To justify this, they give the following arguments:
1. It is short sighted policy to stimulate the bond market in India, as previously RBI too had handled the debt management in a transparent and efficient manner, while
maintaining a level playing field for all participants
2. RBI is already prohibited from interfering in the primary market according to the FRBM act, and the govt bonds are solely auction driven. So, a separate agency is not needed
3. The present system of debt management is working good, as it has helped in maintaining debt at a manageable level always.
4. Other countries like UK, had also reverted to assigning the debt management activity to national banks, after forming similar separate agencies
5. It can lead to birth of several separate debt management agencies in the future, where the mutual coordination can become difficult, leading to crisis situation
6. We can give additional powers to the Finance ministry to coordinate and provide technical input and assistance to cash and debt management agencies
--But seeing the reports of Narsimhan committee, Vijay kelkar and Percy Mistry committees, there is an emphasis on the formation of a separate agency. So, even if it is to be
established, it should be in a phased and caliberated manner, while keeping the national economic framework in consideration.
recent measures to increase tourism.

The steps taken by the Ministry of Tourism to increase the arrival of tourists to India are:-
(1) Launch of Tourist e-Visa for citizens of 44 countries.
(2) Promotion of the destination through the Incredible India Campaign across the globe.
(3) Participation in major International Tourism & Travel Fairs & Exhibitions.
(4) Organising Road Shows to promote tourism destinations and products of country in major tourist source markets in collaboration with stake holders.
(5) Development and promotion Niche Tourism products.
(6) Creating an increased pool of trained man power in Hospitality & Tourism sectors for delivery of quality service to the tourist.
(7) Organising International Buddhist Conclave once in 2 years to show case the Buddhist Heritage and International Tourism Mart for showcasing the tourism potential of North East being held every
year.
recent steps to improve thermal power generation.

To further improve thermal power generation in the country, following steps have been taken by the Government:
I. Re-allocation of coal blocks cancelled by Honble Supreme Court through auction/ allotment. This will lead to improved thermal power generation in the country.
II. For power projects which are affected due to short supply of gas, Government of India has sanctioned a scheme which envisaged supply of imported spot RLNG to the stranded gas based
power plants as well as plants receiving domestic gas up to the target PLF selected through a reverse e-bidding process. The scheme envisages financial support from PSDF (Power System
Development Fund).
III. Renovation modernization (R&M) and life extension (LE) of old and inefficient generation units is considered as an economical option to supplement the capacity addition.
IV. Strengthening of inter/intra-state and inter-regional transmission capacity for optimum utilization of available power.
V. Coordinated operation and maintenance of hydro, thermal, nuclear and gas based power stations to optimally utilize the existing generation capacity.
road transport and safety bill

New proposed Agencies and systems:
The Bill proposes to introduce an independent agency called the National Road Safety Authority of India, which will be an independent, legally empowered and accountable expert lead agency.
It shall be accountable to the Parliament and Central Government.
The new Bill provides for the establishment of State Safety Authorities which shall act in accordance with the directions issued by the National Authority.
The Bill seeks to establish a unified driver licensing system in India which will be transparent. Such a system shall facilitate any time anywhere licence application mechanism in the country and
mitigate duplication of licences from various regional transport offices.
According to the Provisions of the Bill there will be a unified vehicle registration system to enable electronic and online submission of applications for registration at any registering authority
leading to real time interchange of data relating to such an activity.
On the safety issues, the Bill envisages for enforcement of modern safety technologies.
It also contains the provision for creation of a motor vehicle accident fund for immediate relief to the accident victim. It gives special emphasis on safety of school children and security of women.
The Bill also includes the setting up of a Highway Traffic Regulation and Protection Force (HTRPF).
radicalisation and extremism:nice points..

Topic: Linkages between development and spread of extremism.
8) In your opinion, what factors lead to growth of radicalisation and extremism in Indian society? As seen recently, Islamic State has failed to attract Indians to fight for it. What can be the possible reasons
for this failure? Critically examine. (200 Words)
Radicalisation n extremism generally stem from gross inequalities, heightened belief of communalism in society and India is no exception. Many factors encircle India that are leading to growth of extremism
in India
- India's staggering inequality : According to a report, richest 10% of Indians are 370 times richer than 10% poorest.
- Justice delayed and Justice denied : Acquittal of accused in Laxmanpur Bathe massacre, Hashimpura incident erodes faith of vulnerable section of society from the Govt and state with end resort left
to them is take extremist stand
- Development failure n increasing Poverty : Maoism spread in the red corridor is exemplary how state apathy towards the poor can become the biggest internal security threat of India
- Religious intolerance : Ban on Cow slaughter, Vandalisation of Minorities religious places makes minorities alienated & insecure which can have disastrous impact on syncretic traditions of india
- Increasing Unemployment : Telangana creation, Son of the soil doctrine in Maharastra destroys fraternity among indian citizens
- Illegal migration : Porous borders especially towards West Bengal and North Eastern States have led to thousands of Bangladeshis migrants which has increased tensions among ethnic communities eg,
Kokrajhar riots of Assam, Dimapur Lynching of a rape accused
- Perceived Anti-poor legislations : recent ordinance on Land Acquisition 2014 have made the farmer country insecure of their livelihood and security. It is very important that Govt should instil faith in
its citizen.
- Increasing corporatization : Though important for growth but unchecked corporatization and unbalanced development have inherent dangers of fuelling radicalisation among poor people.
- Insitutionalised state bias : eg majority of undertrials being Muslim
Even with above factors it seems that India has safe cushion from growing fundamentalism across the globe. There are numerous justifications to support the argument :
1) Historical Syncretic traditions : India inspite of communal incidences have strong culture of religious harmony.
2) Indian constitutions have provided many safeguards like fundamental rights especially Art 29,30 which cater especially to minorities to safeguard their interest
3) Right to Freedom: is one of the instrumental fundamental right that ensured ventilation of grievance through pen rather than guns
4) Indian constitutions also provide DPSP, Fundamental duties which entails repect for human rights as foremost which give a both a positive moral and political identity to all its citizen
5) Independent Judiciary : By and Large , Indian Judiciary have proven to fair and just n safeguarding vulerable. Eg,Keshavanand Bharti case, recent SC order on Undertrials, Prisioner on death row,
scrapping of draconian clause on Section 66A of IT law have shown that Judiciary to by& large pro poor
6) Indian Penal system is based on philosophy of reformation, which spreads culture of tolerance among its citizen
7) Free and fair election, Universal adult suffrage: have ensured power of ballot than the bullet
Even with above factors there is not room for complacency. India is still stand less with a very thin line below the danger mark. A Pragmatic govt, and vibrant responsible civil society can ensure that Indian
cultural harmony remain intact. Social security measures, speedy justice for poor can go a long way in strenthening it.
organ transplant- problems and steps taken.

why few organ transplantation-
1. finding a donor difficult.
2. lack of infrastructure.
3. lack of awareness.
4. administrative hurdles.
5. conservative mindset.
6. religious myths.
7. lack of centralised registry for organ donation.
8. relatives not empowered to donate organs of brain dead person.
poor people are adversary of this process when they are asked to donate by tempting them of financial gains.,
now what?-
1. govt amended transplantation of human organs act, 1994 for simplifying the procedures to donate the organ.
2. signing donor card (not legal document) will express person's desire to donate.
3. THOT (Transplantation of Human Organs and Tissues Rules),2014 has many provisions to remove the impediments to organ donation.
4. National Organ and Tissue Transplant Organization (NOTTO) is a National level organization set up under Ministry of Health and Family Welfare.
-would function as apex centre for All India activities of coordination and networking for procurement and distribution of Organs and Tissues and registry of Organs and
Tissues Donation and Transplantation in the country.
-to fill up the gap between Demand and Supply as well as Quality Assurance in the availability of various tissues.
Economic Survey 2014-15 Highlights

Economic Survey 2014-15 Highlights
(Copied from PIB)
Economic Outlook, Prospects and Policy Challenges
Macroeconomic fundamentals in 2014-15 have dramatically improved. Highlights are:

Inflation has declined by over 6 percentage points since late 2013.
The current account deficit has declined from a peak of 6.7 percent of GDP (in Q3, 2012-13) to an estimated 1.0 percent in the coming fiscal year.
Foreign portfolio flows have stabilized the rupee, exerting downward pressure on long-term interest rates, reflected in yields on 10-year government securities, and contributed to the surge in equity
prices.
In response to the favourable terms of trade shock (especially with regard to oil), macroeconomic policy has appropriately balanced government savings (two-thirds) and private consumption (one-third).
After a nearly 12-quarter phase of deceleration, real GDP has been growing at 7.2 percent on average since 2013-14, based on the new growth estimates of the Central Statistics Office. Notwithstanding
the new estimates, the balance of evidence suggests that India is a recovering, but not yet a surging, economy.
From a cross-country perspective, a Rational Investor Ratings Index (RIRI) which combines indicators of macro-stability with growth, illustrates that India ranks amongst the most attractive investment
destinations. It ranks well above the mean for its investment grade category (BBB), and also above the mean for the investment category above it (on the basis of the new growth estimates).
Several reforms have been undertaken and more are on the anvil. The introduction of the GST and expanding direct benefit transfers can be game-changers.
Structural shifts in the inflationary process are underway due to lower oil prices, deceleration in agriculture prices and wages, and dramatically improved household inflation expectations. Going forward
inflation is likely to remain in the 5-5.5 percent range, creating space for easing of monetary conditions.
In the short run, growth will receive a boost from the cumulative impact of reforms, lower oil prices, likely monetary policy easing facilitated by lower inflation and improved inflationary expectations, and
forecasts of a normal monsoon in 2015-16. Using the new estimate for 2014-15 as the base, GDP growth at constant market prices is expected to accelerate to between 8.1 and 8.5 percent in 2015-16.
Medium-term prospects will be conditioned by the balance sheet syndrome with Indian characteristics that has the potential to hold back rapid increases in private sector investment. Private investment
must be the engine of long-run growth. However,there is a case for reviving targeted public investment as an engine of growth in the short run to complement and crowd-in private investment.
India can balance the short-term imperative of boosting public investment to revitalize growth with the need to maintain fiscal discipline. Expenditure control, and expenditure switchingfrom consumption to
investment,will be key.
The outlook is favourable for the current account deficit and its financing. A likely surfeit, rather than scarcity, of foreign capital will complicate exchange rate management. Reconciling the benefits of
these flows with their impact on exports and the current account remains an important challenge going forward.
India faces an export challenge, reflected in the fact that the share of manufacturing and services exports in GDP has stagnated in the last five years. The external trading environment is less benign in two
ways: partner country growth and their absorption of Indian exports has slowed, and mega-regional trade agreements being negotiated by the major trading nations in Asia and Europe threaten to exclude
India and place its exports at a competitive disadvantage.
India is increasingly young, middle-class, and aspirational but remains stubbornly male. Several indicators suggest that gender inequality is persistent and high. In the short run, the renewed emphasis on
family planning targets,backed by misaligned incentives, is undermining the health and reproductive autonomy of women.
Fiscal Framework
India must adhere to the medium-term fiscal deficit target of 3 percent of GDP. This will provide the fiscal space to insure against future shocks and also to move closer to the fiscal performance of its
emerging market peers.
India must also reverse the trajectory of recent years and move toward the golden ruleof eliminating revenue deficits and ensuring that, over the cycle, borrowing is only for capital formation.
Expenditure control combined with recovering growth and the introduction of the GST will ensure that medium term targets are comfortably met.
In the short run, the need for accelerated fiscal consolidation is lessened by the dramatically changed macro-circumstances and the less-than-optimal nature of pro-cyclical policy. The ability to do so will
be conditioned by the recommendations of the Fourteenth Finance Commission (FFC).
Nevertheless, to ensure fiscal credibility and consistency with medium-term goals, the process of expenditure control to reduce the fiscal deficit should be initiated. At the same time, the quality of
expenditure needs to be shifted from consumption, by reducing subsidies, towardsinvestment.
Finally, implementing the FFC recommendations will lead to states accounting for a large share of total tax revenue. This has the important implication that, going forward, Indias public finances must be
viewed at the consolidated level and not just at the level of the central government. If recent trends in state-level fiscal management continue, the fiscal position at the consolidated level will be on a
sustainable path.
Subsidies and the JAM Number Trinity Solution

The debate is not about whether but how best to provide support to the poor and vulnerable. The government subsidises a wide variety of goods and services with the aim of making them affordable for the
poor, including: rice, wheat, pulses, sugar, railways, kerosene, LPG, naphtha, iron ore, fertiliser, electricity, water.
The direct fiscal cost of these select subsidies is roughly Rs. 378,000 crore or 4.2 percent of 2011-12 GDP. This is roughly how much it would cost to raise the expenditure of every household to the level of
a 35th percentile household (well above the 21.9percentTendulkar Committee poverty line).
Are these subsidies effectively targeted at the poor? Unfortunately, subsidies can sometimes be regressive and suffer from leakages. For example, electricity subsidies by definition only help electrified
households. Even in the case of kerosene, 41 percent of PDS kerosene is lost as leakage and only 46 percent of the remaining 59 percent is consumed by households that are poor.
The JAM Number Trinity Jan Dhan Yojana, Aadhaar, Mobile can enable the State to transfer financial resources to the poor in a progressive manner without leakages and with minimal distorting effects.
The Investment Challenge
The stock of stalled projects stands at about 7 percent of GDP, accounted for mostly by the private sector. Manufacturing and infrastructure account for most of the stalled projects. Changed market
conditions and impeded regulatory clearances are the prominent reasons for stalling in private and public sectors, respectively.
This has weakened the balance sheets of the corporate sector and public sector banks, which in turn is constraining future private investment, completing a vicious circle.
Despite high rates of stalling, and weak balance sheets, the stock market valuations of companies with stalled projects are quite robust,which is a puzzle.
Combining the situation of Indian public sector banks and corporate balance sheets suggests that the expectation that the private sector will drive investment needs to be moderated. In this light, public
investment may need to step in to ramp up capital formation and recreate an environment to crowd-inthe private sector.
The Banking Challenge
The Indian banking balance sheet is suffering from double financial repression. On the liabilities side, high inflation lowered real rates of return on deposits. On the assets side,
statutory liquidity ratio (SLR) and priority sector lending (PSL) requirements have depressed returns to bank assets. As inflation moderates and the banking sector exits liability-
side repression, it is a good time to consider addressing the asset-side counterpart.
In a cross-country comparison, controlling for the level of development, the size of the Indian banking system, measured by credit indicators, does not seem too high either in absolute terms or relative to
other sources of financing. However, going forward, capital markets and bond-financing need to be given a boost.
Private sector banks did not partake in the biggest private-sector-fuelled growth episode in Indian historyduring 2005-2012. This is reflected in the near-constant share of private sector banks in deposits
and advances in those years.
There is substantial variation in the performance of the public sector banks, so that they should not be perceived as a homogenous block while formulating policy.
Putting Public Investment on Track the Rail Route to Higher Growth.
The Indian Railways over the years have beenon a route to nowherecharacterized by underinvestment resulting in lack of capacity addition and network congestion; neglect of commercial objectives;
poor service provision; and consequent financial weakness. These have cumulated to below-potential contribution to economic growth.
Very modest hikes in passenger tariffs and cross-subsidisation of passenger services from freight operations over the years have meant that Indian (PPP-adjusted) freight rates remain among the highest
in the world, with the railways ceding significant share in freight traffic to roads (that is typically more costly and energy inefficient).
As a result, the competitivenessof Indian industry has been undermined. Calculations reveal that China carries about thrice as much coal freight per hour vis--vis India. Coal is transported in India at
more than twice the cost vis--vis China, and it takes 1.3 times longer to do so.
Econometric evidence suggests that the railways public investment multiplier (the effect of a Rs. 1 increase in public investment in the railwayson overall output) is around 5.
However, in the long run, the railways must be commercially viable and public support must be linked to railwayreforms: adoption of commercial practices; tariff rationalization; and technology overhaul.
Skill India to Complement Make in India
What should we Make in India? Sectors that are capable of facilitating structural transformation in an emerging economy must:
Have a high level of productivity.
Show convergence to the technological frontier over time.
Draw in resources from the rest of the economy to spread the fruits of growth.
Bealigned with the economys comparative advantage; and
Betradeable.
Registered manufacturing, construction and several service sectors particularly business services perform well on these various characteristics. A key concern with these sectors however is that they
are rather skill-intensive and do not match the skill profile of the Indian labour force.
India could bolster the Make in Indiainitiative, which requires improving infrastructure and reforming labor and land laws by complementing it with theSkilling India initiative. This would enable a larger
section of the population to benefit from the structural transformation that such sectors will facilitate.
A National Market for Agricultural Commodities
Markets in agricultural products are regulated under the Agricultural Produce Market Committee (APMC) Act enacted by State Governments. India has not one, not 29, but thousands of agricultural
markets.
APMCs levy multiple fees of substantial magnitude, that are non-transparent, and hence a source of political power.
The Model APMC Act, 2003 could benefit from drawing upon the Karnataka Model that has successfully introduced an integrated single licensing system. The key here is to remove the barriers that
militate against the creation of choice for farmers and against the creation of marketing infrastructure by the private sector.
Climate Change
India has cut subsidies and increased taxes on fossil fuels (petrol and diesel along with a coal cess) turning a carbon subsidy regime into one of carbon taxation. The implicit carbon tax is US$ 140 for
petrol and US$64 for diesel.
In light of the recent falling global coal prices and the large health costs associated with coal, there may be room for further rationalization of coal pricing. The impact of any such changes on affordable
energy for the poor must be taken into account.
On the whole, the move to substantial carbon taxation combined with Indias ambitious solar power program suggests that India can make substantial contributions to the forthcoming Paris negotiations on
climate change.
The Fourteenth Finance Commission
The FFC marks a watershed in the history of Indian federalism. Unprecedented increases in tax devolution will confer more fiscal autonomy on the states. This will be enhanced by the FFC-induced
imperative of having to reduce the scale of other central transfers to the states. In other words, states will now have greater autonomy both on the revenue and expenditure fronts.
All states stand to gain from extra resources although there will be some variation between the states.
FFC transfers are highly progressive; that is, states with lower per capita NSDP receive on average much larger transfers per capita. In contrast, plan transfers were much less progressive.
The concern that more transfers will undermine fiscal discipline is not warranted because states as a whole have been more prudent than the centre in recent years.
basics of make in india

The Make in India" initiative is based on four pillars, which have been identified to give boost to entrepreneurship in India, not only in manufacturing but also other sectors. The four pillars are:
(i) New Processes: `Make in India` recognizes `ease of doing business`
(ii) New Infrastructure: Government intends to develop industrial corridors and smart cities, create world class infrastructure with state-of-the-art technology and high-speed communication.
Innovation and research activities are supported through a fast paced registration system and improved infrastructure for IPR registration. The requirement of skills for industry are to be identified
and accordingly development of workforce to be taken up.
(iii) New Sectors: FDI has been opened up in Defence Production, Insurance,Medical Devices, Construction and Railway infrastructure in a big way. Similarly FDI has been allowed in
Insurance and Medical Devices.
Other measures taken by the Government to boost manufacturing sector in the country as follows;
1 14 Government of India services has been integrated with online single window under e-Biz portal.
2. Creation of Investor Facilitation Cell in `Invest India` to assist, guide and handhold investors during the various phases of business life cycle.
3. Information on 25 sectors has been put up on `Make in India`s web portal (http://www.makeinindia.com) along with details of FDI Policy, National Manufacturing Policy, Intellectual
Property Rights and Delhi Mumbai Industrial Corridor and other National Industrial Corridors.
4 Ordinance has been issued to make land acquisition easier for important projects.
5. A number of items have been taken off the licensing requirement from Defence products` list. Similarly, items of dual use have also been taken off the licensing requirement.
6. The Ministry of Labour and Employment has developed a unified Web Portal Shram Suvidha`. This portal facilitates:
a. Allotment of Unique Labour Identification Number (UN) to units;
b. Filing of single self-certified online return for 16 labour laws;
c. Random computerized inspections based on objective criteria;
d. Reports to be uploaded by inspectors within 72 hours of inspection;
14th finance commission..

recommendations-
The FFC has increased the amount that the Centre has to transfer to the states from the divisible pool of taxes by 10 percentage points, from 32 per cent to 42 per cent.
In addition, the FFC has significantly changed the sharing of resources between the states what is called horizontal devolution. The FFC has proposed a new formula for the distribution of the divisible tax
pool among the states. the FFC has incorporated two new variables: 2011 population and forest cover; and excluded the fiscal discipline variable.
Other important recommendations:
Set up an independent council to undertake assessment of fiscal policy implications of Budget proposals
Replace existing FRBM Act with a debt ceiling & fiscal responsibility law
Wind up National Investment Fund and maintain all disinvestment receipts in the consolidated fund
Amend electricity Act to provide for penalties for delay in payment of subsidies by state governments
Steps for states to augment revenues, such as property tax reforms and issuance of municipal bonds suggested
Set up autonomous and independent GST compensation fund
The commission suggested performance-based grants to panchayats and local bodies. It was recommended the ratio of basic-to-performance grant be kept at 90:10 for panchayats and 80:20 for
municipalities. The Commission had also asked to do away with a distinction between Plan and non-Plan expenditure.
Its implications:
This move implies that grants for centrally sponsored schemes will have to be curtailed.
The acceptance of the recommendations mark at least five major shifts from the past. They are:
the sizeable increase in tax devolution.
taking into account plan revenue expenditures while assessing revenue deficit grants.
discontinuing the distinction between special category and other states.
desisting from awarding sector/state specific grants or to subject grants to conditionality.
to suggest institutional mechanisms for better monitoring of fiscal rules and to achieve cooperative federalism.
This will be a huge help to states in forging their own autonomously generated development scheme and keeping their fiscal deficit in check in the years to come.
The decision will enable the states to utilise the enhanced resources according to the felt needs of the residents of the state.
By accepting the recommendations of the finance commission, the Centre also has implicitly endorsed the fiscal deficit target of 3.6% of GDP for FY16 and 3% thereafter.
further details (just read if time permits)
impact-
The impact of FFC transfers to the states needs to be assessed in two ways: gross and net FFC transfers will clearly add to the resources of all the states in absolute terms and substantially. They will
also increase resources when scaled by states population, net state domestic product, or own tax revenues, with the latter connoting the addition to fiscal spending power.
greater fiscal autonomy to the states would be achieved both on the revenue side (on account of states now having more resources and more untied resources) and on the expenditure side because of
reduced CAS (centre assistence to states) transfers.
The FFC transfers have a more favourable impact on the states that are relatively less developed, which is an indication that they are progressive, that is, states with lower per capita net state domestic
product (NSDP) are likely to receive on average much larger transfers per capita .
in the last few years the overall deficit of the states has been about half of that of the Centre: in 2014-15 (Budget estimates) for example, the combined fiscal deficit of the states was estimated at 2.4 per
cent of GDP compared to 4.1 per cent for the Centre. So, on average, states, if anything, are more disciplined than the Centre.
Based on analysing recent state finances, we find that additional transfers toward the states as a result of the FFC will improve the overall fiscal deficit of the combined central and state governments
further, mechanisms for peer assessments and mutual accountability could be created, and incentives could be provided for maintaining fiscal discipline.
good subsidy and bad subsidy

just check and remember points
---Some of the bad subsidies include:
1. The one which harm the environment, like subsidies on nitrogenous fertilisers, which have led to their overuse and harmed the soil, alongwith increasing the deficit.
2. Schemes which give only a short term relief, without any skill development in the persons involved, which makes them overly dependent on the scheme, like MGNREGA.
3. Subsidies/ schemes started, without much brainstorming, due to which the target population does not benefit much. Example, the loan waiver initiative only benefitted the well off
farmers who have borrowed from the formal sector, and not the farmers who use the informal credit system.
---The good subsidies can be seen as:
1. Subsidies on public transport, to reduce pollution and congestion on roads and reduce
petrol consumption.
2. Subsidies on medical equipment or medicines, during some epidemic, which can ensure that all sectors of populations receive medication.
3. Subsidies for loans given for secondary agriculture initiatives, to reduce the burden on primary agriculture activities, and reduce disguised unemployment in agriculture.
4. Subsidies to ensure flourishing of MSME, so as to reduce the top to bottom approach of progress currently employed by the govt.
5. Subsidies to encourage renewable energy usage at public places and in residential areas,
like Prakash Path in New Delhi, which is to be nationalised after full scale implementation in the capital.
+/- of PPP and reforms needed

India has now entered an inflexion point in PPP where it is moving from asset creation to operation of projects.The shift is leading to problems in the absence of an institutional mechanism, like those
present in other countries, to deal with renegotiations. There is suddenly a spate of PPP projects which have come up for renegotiation
The reasons for the failure of PPP projects in India are many:
poor preparations,
flawed risk-sharing,
inappropriate business models and
fiscal uncertainties
vested interests leading to development of skewed qualification criteria
Technical data availability and its quality
with the economy not growing as projected earlier, traffic projections have gone wrong, leading to issues of financially viability
it is not appropriate to shoot down the entire concept of PPP on the basis of one failure. The nature of problems being faced by PPP projects varies from one project or sector to another. For example :
airport express line- construction and operation was done by 2 different entities
roads - delayed clearances and aggressive bidding
However, looking at the bigger picture,it appears that the PPP projects are not running along the expected lines.
Here we need a two pronged strategy:

1. Current projects : need to re-asses and take up a project-specific approach, restructure their contracts from the current form to become engineering-procurement-construction (EPC) service providers.
2. Increased government spending on infrastructure
The govt to set up a national infrastructure fund (NIF). Current budgetary commitments to investment in infrastructure could be channelised into the fund as equity. Further, all asset sales, whether
through disinvestment, spectrum sales or mining licences, should be transferred to this entity as equity.The debt can be leveraged through :
1. Sovereign debt
2. Credit enhancement
3. Direct market bond issuance
The first priority of the new fund will be to take some critical projects that are currently on the shelf as non-performing assets
Also promotion of bilateral investments in infra (like DMIC) and completion of diamond quadrilateral should be given priority.
these changes and increased govt expenditure will give a positive push to the infrastructure in india leading to many positive extrenalities and will further boost FDI in India
soil health card scheme

About the Scheme:
It is a scheme to provide every farmer a Soil Health Card in a Mission mode. It is a scheme under which the Central Government provides assistance to State Governments for setting up Soil Testing
Laboratories for issuing Soil Health Cards to farmers.
The scheme will be implemented in all states to promote soil testing services, issue of soil health cards and development of nutrient management practices.
State Governments have adopted innovative practices like involvement of agricultural students, NGOs and private sector in soil testing, determining average soil health of villages,
etc., to issue Soil Health Cards.
The state governments will prepare yearly action plan on the issue and the cost will be shared in the ratio of 75:25 between the Centre and states.
The scheme assumes importance as the imbalanced application of fertilisers have caused deficiency of primary nutrients (nitrogen, phosphorus, and potassium), secondary nutrients (such as
sulphur), and micro-nutrients (boron, zinc, copper etc.) in most parts of country.
Though a few states like Gujarat, Tamil Nadu, Haryana, Karnataka and Uttar Pradesh have made progress in soil testing but no uniform norms are followed in the country for soil analysis and
distribution of soil health cards. The central scheme aims to address this issue.
new urea policy..its affect
Topic: Issues related to direct and indirect farm subsidies
7) Recently the Union Cabinet approved a new policy on urea. Examine how this new policy would affect producers and consumers in India. (200 Words)
Energy efficient incentives

---------------------------------------------
The government has linked the urea incentives to energy consumption of domestic manufacturer.
It will boost the producers to take more energy efficient technology for urea production. Thus, new policy will usher in a new era of energy efficiency competition among producers.
It will also help the consumers to receive urea which is environment friendly and will boost them also to adopt an environment friendly method whiling using urea.
Free transportation fees of potassium and phosphorous

------------------------------------------------
Government has made free the transportation fees of p and k to manufacturer.
It will help the producers by providing a level playing field equally regardless of their capacity to transport to every nook and corner of the country.
The consumers will also be equally benefited by this as they will receive fertiliser at affordable price without any scarcity caused by transportation.
Import substitute incentive

---------------------------------------------
The government has decided to give incentives to those who will produce urea more than their 100% annual capacity.
It will inspire the producers to produce more applying the best energy efficient method and thus creating a wealthy environment everywhere.
The consumers will be benefited by this as they will find fertiliser without being competitive at retail level and thus eliminating the possibility of any artificial scarce.
Subsidy substitute
-----------------------------
The new initiatives or incentives will save huge amount of subsidy bill of government. Linking incentives to efficiency;this new policy has brought overall development to consumers, producers as well as
environment.
Though new policy is efficient but the capacity of energy efficient production might not be affordable to all producers. It might affect them in gaining government incentives. Anyway, this policy is a
combination of cost effective production which will help both producers and consumers.
Black Money Law: Will it act as a deterrent?

SourceURL: http://www.insightsonindia.com/2015/05/18/the-big-picture-black-money-law-will-it-act-as-a-deterrent/
The legislation has harsh punishment including rigorous imprisonment up to 10 years and penalties can go up to 3 times of the tax in
case of repeated offenders among others. The act also seeks to give one time opportunity to those who have already concealed income and assets to
come clean. However, concerns are being expressed about certain provisions of the Bill apart from its efficacy.
The Bill does not speak anything regarding tracking the black money. This is said to be the biggest lacuna in the Bill. The Undisclosed
Foreign Income and Assets (Imposition of Tax) Bill, 2015 also known as the Black Money Bill does not have provisions to deal with domestic illegal
assets and cash held on Indian soil. According to the provisions of the Bill those declaring unaccounted income or assets will pay a flat 30% tax and a
similar penalty in return for not being prosecuted. The Prevention of Money Laundering Act is also amended to help tax authorities
pursue recovery through domestic assets as well in cases of those caught with overseas assets under the new black money law.
The bill provides for the attachment of domestic property of those on the wrong end of the foreign assets law. The government is also planning to
bring a law on Benami properties. Those abetting in stashing wealth overseas, including tax advisors, FINANCIAL advisors, banks and financial
institutions, will also face jail terms of up to seven years.
Experts say that the law will enhance the ability to trail the original source of FUNDING and even attach properties even though the
original owner can escape the law by stating that the property doesnt belong to him. Several thousands of such benami transactions are pending
action due to loopholes in the law, but the revised Bill has given more teeth to it for confiscation of such properties and curb generation of black
money in the real estate sector, which is the root cause of unaccounted money in the system. The bill will discourage the cash transaction and lead to
a correction in property prices that have artificially soared.
smart city: explained

What are Smart Cities?
-A smart city is an urban region that is highly advanced in terms of overall infrastructure, sustainable real estate, communications and market viability. It is a city where information technology is the
principal infrastructure and the basis for providing essential services to residents.
There are many technological platforms involved, including but not limited to automated sensor networks and data centres.
In a smart city, economic development and activity is sustainable and rationally incremental by virtue of being based on success-oriented market drivers such as supply and demand. They benefit
everybody, including citizens, businesses, the government and the environment.
core infra elements in smart city will be-
adequate water supply

assured electric suppl
sanitation plus solid waste management
efficient public transport
affordable housing
robust IT connectivity and digitisation
good governance and citizen participation
sustainable environment
safety and security of citizens
health and education
the strategic components of this mission are retrofitting,city renewal (redevelopment) and city extension (greenfield development).
Selection of the Cities:
Cities to be developed will be selected through a competition intended to ascertain their ability to achieve mission objectives. Each state will shortlist a number of smart city aspirants, which will
prepare proposals for the Centre.
Each selected city would get central assistance of Rs 100 crore per year for five years.
Implementation:
The Mission will be implemented through area based approach, which includes retrofitting, redevelopment, pan-city initiatives and development of new cities.
Under retrofitting, deficiencies in an identified area will be addressed through necessary interventions.
Redevelopment enables reconstruction of an area that is already built but not amenable for any interventions.
Pan-city components could be interventions like intelligent transport solutions that benefits residents by reducing commuting time.
The focus will be on core infrastructure services like adequate and clean water supply, sanitation and solid waste management, efficient urban mobility and public transportation, affordable housing
for the poor, power supply, robust IT connectivity, governance, especially e-governance, and citizen participation.
Challenges:
The concept is not without challenges, especially in India. Some of the Major challenges are:
The success of such a city depends on residents, entrepreneurs and visitors becoming actively involved in energy saving and implementation of new technologies.
There are many ways to make residential, commercial and public spaces sustainable by ways of technology, but a high percentage of the total energy use is still in the hands of end users and their
behaviour.
There is the time factor such cities can potentially take anything between 20 and 30 years to build.
Land acquisition will also obviously be the biggest hurdle while setting up smart cities.
regional inequality
rural-urban divide and intra-city disparities.
there are many census towns which arent covered in smart city or amrut program (census towns are governed by village panchayats which lack resources but have potential to bridge b/w rural and
urban areas).
fragmented governance structure (ULB are in driving seats but are financially too weak)
no road map for investment requirements
needed additional staff and their salaries
uneasy relation b/w experts and election bodies.
lack of municipal bodies over urban land as generally they are managed by development authorities.
recommendations-
challenges ko solve kar lo..

center should incentivise states.
need of constructive engagement b/w civil societies and municipal bodies
Benefits:
Smart cities can be developed over a minimum area of 500 acres and will require at least Rs 6,000 crore of investment for basic and back-end infrastructure. Experts say it can generate employment
for at least 200,000 people per city.
10 such new cities can bring in about Rs 9 lakh crore investment (including investments by users) and usher in unprecedented economic growth.
The smart cities will result in new orders for city planning, engineering, designing, and construction companies.
The project will also generate huge interest among the global players who might want to partner such projects. One sector where results can be made visible almost instantly is urban development,
where both public and private sectors can identify 500-5000 acres at a single location and kickstart the development process.
digital governance in smart city could include-

business process automation
multichannel citizen service-bill payment, grievance registration etc.
city performance dashboard
integrated asset management solutions-management of all govt infra assets
integrated command and operation centre-to monitor city services in real time
multi channel citizen comm.- citizen service portal etc
workforce and resource management
in solid waste management- like using gps location nd co-ordinates of bins nd dumping sites; gps enabled vehicle automatic generation of status of collection.
on the other hand, AMRUT confines towater supply, sewerage and septage management, storm water drainage, urban transport and development of green spaces and parks including capacity building and
reform implementation in urban local bodies (ulb). for it, a state annual action plan (saap) will be prepared in conformity with other central and state programs.
govt schemes , check it..
Latest Government Schemes - Central and State Govt. Yojanae
2. Krishi Amdani Beema Yojana : It is to help farmers dont bear any financial loss if their crops gets destroyed due to any reason like unexpected weather.
3. PradhanMantri Gram Sinchai Yojana :

It was launched to boost agricultual yield.
4. Pradhan Mantri Saansad Adarsh Gram Yojana - Launched by PM Modi, this scheme is an an ambitious village development project under which each MP will take the responsibility of developing physical
and institutional infrastructure in 3 villages by 2019.
5. Project Uddan : The project was started to providing skills to 40,000 young people over a period of five years.
6. Mahatma Gandhi Pravasi Suraksha Yojana (MGPSY) : It is a pension and life insurance scheme started by Indian government.
8. Roshini Scheme : This yojana was launched for skill development and job placement for rural youth and women in maoist affected 24 districts in 9 states.
9. Free CFL bulb Scheme : It is a State Govt. scheme launched by Tamil Nadu. Free CFL bulb scheme will provide free compact fluorescent light (CFL) bulbs to over 14 lakh hut
dwellers in the state.
commodity exchange and effect on agriculture

1. What is commodities exchange? What are the mechanisms in India to regulate

commodities exchange? Discuss its importance with regard to agriculture sector.
Commodity exchange is an exchange where various commodities agricultural as well as manufactured - and its derivatives are traded on contract basis which include spot prices, forward , futures etc.
Important national level commodity exchanges are

* Mumbai Commodity exchange
* National Commodity and derivative exchange
* National multi-commodity exchange of India Ltd
The important regulatory mechanism is Forward MarketCommission (FMC) after taking recommendations from Board of Directors of the Commodity Exchange . FMC performs its functions as follows:
- It accords permission for commencement of trading in different contracts
- Monitoring market conditions
- Remedial measures
Importance with agriculture:
- An alternative method to Minimum Support Price reduces burden on Gov and ensure price stability
- new markets are opened to farmers which encourage them to increase agricultural production
- Ensure food security
- More transparency and fairness provided by regulatory mechanism
- Change in cropping pattern occur
- Perishable commodities can be marketed at spot
- Standardization of commodities
- Promote food processing industry
At the same time weather problems ,pest ,middle man intrusion etc are some drawbacks of this exchange on agriculture .
points points everywhere..

$ sectors to see-
agri
manufacturing
education
health care
govt services
$ 5 attributes of rapid growth of a sector-
high level of productivity

faster productivity in low productivity areas
expansion
alignment with comparative advantage
tradability
$ aspects to ponder-
knowledge
digitisation
integration/internet working
dis intermediation
convergence
innovation
immediacy
globalisation
employment
$ regarding pornography-
section 292 of ipc makes distribution of obscene material crime.
section 67 of it act makes it ofence to publish or transmit obscene material in electronic form.
pocso makes using children in pornographic acts for commercial purposes punishable.
issue of labour reform.

Topic: Employment and related issues
5) Which elements constitutes Labour Reforms in India? Critically comment on the laws and institutions that need to be reformed to bring meaningful Labour Reforms in India. (200 Words)
---Labour reforms include providing job security to the nations labour population, along with financial independence which can enable them to raise their standard of living, allowing the labourers a share in
the decision making authorities of the companies, ensuring equality of pay for men and women and safeguarding the rights of migrant workers and other vulnerable groups.
---Some of the labour laws date back to the British rule, but the govt has introduced some reforms in the past, like:
1. Regulating employment of contract labour along with those who are regularly employed.
2. Women permitted to work night shifts too, wherever they feel comfortable.
3. Payment of gratuity amount, if the labour retires or leaves.
4. Bonuses to be paid to the labourers from the profits earned from productivity.
5. Other reforms include the maternity benefits act, Indira Gandhi National Old Age scheme, National pension scheme, etc.
---Since these reforms cant fulfill all needs of the labourers sufficiently now, some more reforms are needed:
1. Labour should be shifted from concurrent to state list, so that each state can better cater to their labourers needs. This can be done from the increased quota of funds to be allocated to states now.
2. The numerous laws complicate their usage. So, they should be consolidated category wise, regarding provision of insurance, wage revision, dispute redressal mechanism, etc.
3. The Make in India initiative should also be able to diversify the production capacities, and simultaneously provide job security to workers.
4. The maintanence of records of workers in the companies, should be computerised, to avoid tempering later and easy access.
Why India needs labor reforms?
India has 44 labour acts union Government and 150+ labor acts from state governments.
These laws have overlapping provisions= inspection-raj, Owner cant comply with one act without breaking/side-stepping another law = bribery and inefficiency.
If company has >100 workers. The owner must seek Government permission before laying them off / closing the firm.
Industrial DisputesAct1947 To evade this, companies hire workers via Contractors = no social security, no EPF.
Even IT/Tech companies try to evade industrial dispute act, by hiring temporary staff from supercontractors like Teamlease.
Companies get tax benefits and CSR benefits for giving training to teens.
Apprentice Act But these young apprentices are made to work like a regular workmen/laborer.
They dont even get paid for overtime. And companies can remove them anytime.
So in a way, companies misuse apprentice act, to evade the archaic industrial dispute act (100 worker firing).
Ultimately both sides suffer.
Worker doesnt give his 100% because, he is not permanent.
Owner doesnt invest in his training /skill upgrade because he is not permanent = low skill, low output, demographic dividend cant be reaped.
Limits overtime in firms with more than 10 employees.

FactoriesAct 1948 Even petty offenses like not installing a Spittoon = can lead to criminal cases registered against owner.
Companies with >20 workers have to setup cafeterias.

Contract Labour Act, 1970 Government can decide what food is to be served!
Industrial employment act -makes job description modifications very difficult.

Trade union act - leads to formation of multiple unions by allowing any 7 workers within firm to form union. Also, act also provides union right to strike and represent workers in legal disputes with
employer thus it encourages firm to remain less than 7.
Labor reform initiatives -

- Raj govt increased to 300 from 100.
-Web portal
-Portability of provident fund
-Apprenticeship act to encourage skill formation.
-Bankruptcy law reform to bring about legal certainty and speed.
-govt initiatives-
shram suvidha portal

apprenticeship protsahan yojana
labor inspection team
universal a/c no for provident fund
revamped rashtriya swasthya bima yojana
Msme efforts..
-some problems-
availability of tech, infra and managerial competence

limitations posed by labor law
taxation policy
market uncertainty
imperfect competition and skill level.
misselling of products
-some more sol-
laws should not only be labor friendly but also entrepreneur friendly.
skill formation
dedicated tv and radio programs to educate entrepreneurs
early investment from angel investors
special focus on j&k and ne states
investment in r&d
credit availability
issues related to service tax for msme is yet to be resolved
inflation policy adopted by rbi k benefits

pulse production
causes of decline in pulse production-
-its substitution by other crops.
-its shifting to less productive land.
-limited improvements in its yield.
strategies to boost production-

-formulation of policies by govt.
-in short term, augment supplies through imports and rationalise through pds.
- increase in domestic production as long term strategy. incentivise cultivation. rice-pulse instead of rice-wheat system enhance soil nutrients. cultivation of short term pulses on rice fallows. facilitating
inoculation (vaccination) by soil bacteria (rhizo).
benefits of growing it-
fix atmospheric nitrogen

provides organic content to soil
enhance water holding capacity of soil
positive impact on human health as they are protein rich
short duration crops hence could be either grown as rotational or inter crops.
reduce spending on fungicides and pesticides
certain varieties are highly resistant to disease.
financial reforms in budget..

Topic: Indian Economy Financial Sector
7) It is said that the most recent union budget has introduced a few excellent moves that could work towards ushering in a new era in the financial sector in India. Write a note on them. (200 Words)
some of the moves are-
1. mudra (micro units development refinance agency) for the financing of micro finance insti so as to provide easy and better loan services to msme.
2. bankruptcy code- the code will be properly defined so as to clarify the non performing assets of any bank and provisions it should take to counter it.
3. sarfaesi act to nbfc- this act is for the standardization and regulation of non performing assets in the bank but now this will be extended to NBFCs too so they can function better.
4. jam for financial inclusion- JAM (jan dhan, aadhar and mobile) together can solve the problem coming in way of financial inclusion to a large extent.
5. forward market commission merger with sebi- FMC deals with the regulations related to the future commodities exchange. now this will be merged with the SEBI to reduce the complexity and autonomy
problems in different situations.
6. independent committee (bank board bureau) for appointing MD and chairman of public sector banks- in accordance with the fslrc, the new committee will be formed to keep the functioning of public
sector banks away from the political influence over it.
7. clarity over GAAR.
8. decreasing corporate tax.
9. sector neutral financial redressal agency- a one stop consumer complain and grievance redressal forum against all financial service providers. (recommended by FSLRC)
10. calrity and rationalisation of taxation rules for REITs and INVITs.
11. NIIF
gold monetising scheme..

Topic: Indian economy resource mobilization
9) Recently the Union government announced details of a new gold monetization scheme . Examine what are its objectives and how does it seek to realize its objectives. (200 Words)
Objectives of the scheme:
1. Change the perspective of the consumer towards the gold as financial saving.
2. Reduce the government import bill to reduce CAD.
3. Gold shall be circulated in the economy, through the banks by benefitting all the stakeholders concerned.
4.Increase the number of stake holders.
For this purpose,

Customers are asked to deposit their gold after certifying from the designated BIS marking centers in their metal account.Then at the time of redemption, at the option of the consumer exercised at the time
of deposit will be paid either in cash or gold.
1. Minimum deposit is 30Gm. Hence , majority shall be part of this scheme.
2. Available gold with the banks, shall be lend by them to jewellers at interest rates to reduce imports.
3.If banks allowed by RBI to consider this gold deposit as part of CRR and SLR, then , more liquid cash would be available to banks, which is more focus on priority and other lendings.
4.Banks may convert gold deposit into forex, to lend to the importers and exporters.
problems with the scheme-
1. no proper guidelines about the capital gains tax levied on the physical gold converted for monetization.
however this problem can be easily adressed by the govt by giving proper guidelines about the whole taxation process.
2. as per the former announcemnets this gold and the interest earned are free from income tax, still there can be harassment of genuine depositers at the hands of income tax officers..while it is important
to know the source of gold with the depositers there must be some guidelines form knowing these type of informations without annoying the depositers.
3. proper infrastructure for gold exchanges gold depositories etc should be there..for finding out the purity of gold banks can be given incentive for testing and standarizing the gold i.e the hallmark providing
task can be given to banks without increasing their burden.
4. sentiments of indians and temple priests attached to the gold can be very difficult to overcome..gold is treated as a status symbol in india thats why india is called the SINK of GOLD from ancient times..
govt must ensure that temples and gold holders can see the real benefit while depositing their gold with the banks..
5. one issue is related to volatile prices of gold over a period of time..banks have not yet ensured that how will the respond to the reduced market rates of gold while giving interst to the depositers.
however this problem too can be solved as this scheme works on the principle of recycling of gold then the volatility of gold prices will reduce automatically as there will be less imports..
6. another issue is about melting down of gold while lending them to the jewellers or buying foreign currreny using this gold by the banks..depositers are not sure if the want their gold jewellery back in the
same form or aany different form..
this problem to can be easily overcome by asking the depositer at the time of deposit their preference of the form the want their gold back.
but it will help-
-if temples come ahead
-private traders and small, medium enterprises will take scheme for the liquidity it provides
-common people will adopt too if banks and govt give them comfort of hassle free income stream.
tourism..bahut kuch
$ recommendations-
-promotion of mystery spots (bhangarh in raj), less known destinations
-tour packages for students
-man made amusement parks/themes should be encouraged.
-in ULBs, create weather circulation n/w.
-upgrade existing facilities.
-nstitutional mechanism for management.
-follow international norms.
-timely completion and post maintenence
-ppp
-climatically responsive and location sensitive tourism achitecture
-emphasis on available local material, tech, vernacular design
-use of indigenous species
-traditional methodology
-rainwater harvesting, ground water recharging, zero discharge. discourage fountains in areas of water paucity.
-solar lighting and use of renewable energy. less illumination where scarcity
$various types of touyrism-

-cooperative tourism- development tourists ka bhi ho and local community ka bhi. it is org model which provides income but also act as an incentive to preserve local art and cultureand maintain trdaitional
practices like arch, clothes, cuisine
-heritage
-rural
-adventure
-film
-medical tourism-
benefits- (baki par bhi lag sakte h)
foreign exchange earnings

improved info sharing
increased efficiency of patient process
improve in hospital supplies
strategy alliances with business partners
tech and gyan transfer
better logistics performance
employment creation
skill creation
development of infra in health, tourism and travel
increased wealth per capita
scope for r&d
international acceptance of country a global healthcare p[rovider
social and cross cultural experience and international customer relations
brand image of nation
challenges-
no strong govt support

low coordination b/w players
perception as unhygeinic country
lack of unifrom pricing policy
strong competition from countries like malaysia, thailand, singapore
under investment in health
lack of proper insurance policy
middle men
way forward-
min of health and family welfare and min of tourism should come together on this
adopt standardized procedures
capacity building programs
focus on language training
better connectivity
rest could be added from challenges
-eco tourism-
problems-
rising ghg
nocise
air quality. water
biodiversity loss
draining of wetlands
destrcution of coral reefs
benefits-
empowers locals socio-economically. indirect incentives like better infra,health facilities, awareness, education develop positive attitude towards conservation.
local communities ka participation, unka empowerment in the process is imp. poachers ewtc sab kam ho sakte h.
financial inclusion: bahut saara

financial inclusion is the process of ensuring access to appropriate financial products and services needed by all sections of society in general and vulnerable groups in particular at affordable cost in fair and
transparent manner by institutional players.
what is inclusion-
-more rapid decline in poverty. (problem with is that the official poverty lines are seriously contested)
-inclusion of three dimensions- employment, income and consumption.
-by world bank- the pace at which an economy graow and how far benefit spreads.
- by rbi- it is the process of ensuring access to appropriate financial products and services needed by all sections of the society in general and vulnerable groups such as weaker sections and low income
groups in particular at an affordable cost in a fair and transparent manner by mainstream institutional players.
history of financial inclusion-

-nationalisation of sbi in 1955 and then more banks in 1969 and 1980.
-est of NABARD and psl norms.
- in 2008, rangrajan committee suggested various measures to expand banking. also advised to initiate ICT based business correspondent model and opening of at least 25% of new branches in unbanked
rural areas.
- now pmjdy
how pmjdy is different from others-
-mission mode approach.
-offers rupay card, micro insurance
- emphasis on coverage of households rather than coverage of villages.
inclusion has wider aspects ahead of only economic ones. it brings social changes as well. rural india has seen changes which include rapid mechanisation of agri, improvements in trasport, comm and
other tech changes.
inclusion of msme- (remember following points and make up jitna samajh aaye)-
-knowledge -digitisation -virtualisation -molecularisation -dis intermediation -convergence -innovation -prosumption -immediacy -globalisation -discordance -boom of self employment
key players in financial inclusion-
-banks
-micro finance instis
-SHGs
-post offices
-mudra
-dd upadhyay gramin kaushal yojana
-pm vidya laxmi karyakram- fully IT based student financial aid authority and monitor scholarship and education loan scheme.
-setu (self employment and talent utilisation)
-atal innovation mission
certain concern why growth isnt inclusive (related to employment only)-

-concentration of good employment in formal sector in only some regions. (central eastern region me kam h nd southern, western, northern region me jyada h)
- unequal access to women and their discrimination in labor market.
addressing it-
-reorienting and restructuring growth process by combining it with fiscal and monetary policy.
-large investments in human capital mainly in education, skills, health.
-taking better care of disadvantaged group.
- targeted employment programs-of two types-
1. self employment programs- (loan etc denge, kaam khud karo)
eg.- swarn jayanti swarozgar yojana (1999)
national rural livelihood mission (renamed ajeevika)
2. wage employment program-(hamare liye kaam karo, wage milegi)
eg.- mgnregs (2005)
inclusion in agri sector-

-national agri market (NAM)- after its completion, there will be seamless transfer of agri prodcts, will provide better prices to farmers, improve supply chain, reduce wastages and create a unified national
market through e-platform.
- soil health scheme
- pm krishi sinchayee yojana-aim to irrigate field of every farmer nd improving water use efficiency. per drop, more crop. har khet ko pani.
-price stabilisation fund- for perishable goods mainly onions and potatoes.
-dd kisan channel.
(note- e-mandi is electronic market platform to sell vegetables online on affordable market prices for both retailers and whole sellers.)
Benefits of gst
Benefits on Indian Economy of GST implementation:
1) All in One: This will now be one tax instead of multiple taxes on services and goods. All other taxes will be subsumed in it.
Which means you need to pay one tax instead of paying multiple taxes which will be easier.
2) Ease of Transaction: Ease of transaction will happen. Goods can be sold easily in any part of the country without worrying about paying taxes in those states separately. It will also reduce the time of
delivery of goods from one place to another as lot of time is wasted in clearances.
3) Classification and Identification : Classifying and Identifying will be easy and it will lead to very relief as many times classifying and identifying lead to chaos.
4) Value Addition : Value addition is added in GST and thats why sometimes it is called National VAT. taxes will be imposed on value addition in supply chain, instead of total value of products.The
arrangement makes final products cheaper as there is no cascading effect of taxes.
5) Services tax and Eexcise duty : At present, states cannot impose services tax and Centre cannot impose taxes beyond manufacturing. So central's service tax and excise duty will go.
6) Global Value: It will also increase India's global value and more companies and countries will see India as a prefered destination for investment.
7) Petroleum Products: Once petroleum products will come in the ambit of this law, it will benefit end user immensely. Currently , different states have different taxes and rates differ a lot.
Gst ki problems -
-Billing honi chahiye sab products ki.. But consumer ko interest nahi rehta most of the times.. For this, billing culture improve karna hoga..this could be done by either incentivising card payment (tax
benighted de do) or through lottery program(bill Lao,lottery pao)..
-Augment administration -tax dept should conduct more audits.
Solid waste management: problems and solutions

Map
reasons which make programs like Swachch Bharat Abhiyan less effective are:
- Absence of community participation in waste management and the misconception that SWM is the sole responsibility of Government
- Apathy of Municipal authorities, still using outdated technologies
- irregular street sweeping
- Less storage of waste at source like waste bins
- Inappropriate designing of urban areas and population
- Lack of solid waste disposal and processing
- Very few primary collection from door steps
- Increase in quantity of electronic waste
Some measures to address this situation are:
- Educate and mobilize people for treatment of waste within their own house hold
- Use technologies like Composting, vermin composting, Bio-ethanation etc
- Increase the number of incinerators for organic waste
- Promote policies to increase reuse of electronic equipment
- strict laws and fine for littering
- increase accountability of municipal corporations
- Increase private participation in implementation of policies
Agricultural Subsidies
Agricultural Subsidies: Kinds of Agricultural Subsidies in India
(1) Input Subsidies:
Subsidies can be granted through distribution of inputs at prices that are less than the standard market price for these inputs. The magnitude of subsidies will therefore be equal to the difference between
the two prices for per unit of input distributed. Naturally several varieties of subsidies can be named in this category.
(a) Fertiliser Subsidy:
Distribution of cheap chemical or non-chemical fertilisers among the farmers. It amounts to the difference between price paid to manufacturer of fertiliser (domestic or foreign) and price, received from
farmers.
This subsidy ensures:
(i) Cheap inputs to farmers,
(ii) reasonable returns to manufacturer,
(iii) stability in fertiliser prices, and
(iv) availability of fertilisers to farmers.
In some cases this kind of subsidies are granted through lifting the tariff on the import of fertilisers, which otherwise would have been imposed.
(b) Irrigation Subsidy:
Subsidies to the farmers which the government bears on account of providing proper irrigation facilities. Irrigation subsidy is the difference between operating and maintenance cost of irrigation
infrastructure in the state and irrigation charges recovered from farmers. This may work through provisions of public goods such as canals, dams which the government constructs and charges low prices
or no prices at all for their use from the farmers. It may also be through cheap private irrigation equipment such as pump sets.
(c) Power Subsidy:
The electricity subsidies imply that the government charges low rates for the electricity supplied to the farmers. Power is primarily used by the farmers for irrigation purposes. It is the difference between
the cost of generating and distributing electricity to farmers and price received from farmers.
The State Electricity Boards (SEBs) either generate the power themselves or purchase it from other producers such as NTPC and other SEBs. Power subsidy acts as an incentive to farmers to invest in
pump sets, bore-wells, etc.
(d) Seed Subsidies:
High yielding seeds can be provided by the government at low prices. The research and development activities needed to produce such productive seeds are also undertaken by the government, the
expenditure on these is a sort of subsidy granted to the farmers.
(e) Credit Subsidy:
It is the difference between interest charged from farmers, and actual cost of providing credit, plus other costs such as write-offs bad loans. Availability of credit is a major problem for poor farmers. They
are cash strapped and cannot approach the credit market because they do not have the collateral needed for loans. To carry out production activities they approach the local money lenders.
Taking advantage of the helplessness of the poor farmers the lenders charge exorbitantly high rates of interest. Many times even the farmers who have some collateral cannot avail loans because banking
institutions are largely urban based and many a times they do not indulge in agricultural credit operations, which is considered to be risky.
To tackle these problems the government can provide:
(1) more banking operations in rural areas-which will advance agricultural loans, and
(2) the interest rates can be maintained low through subsidisation schemes, and
(3) the terms of credit (such as collateral requirements) can be relaxed for the poor.
(2) Price Subsidy:
It is the difference between the price of food-grains at which FCI procures food-grains from farmers, and the price at which PCI sells either to traders or to the PDS. The market price may be so low that
the farmers will have to bear losses instead of making profits. In such a case the government may promise to buy the crop from the farmers at a price which is higher than the market price.
The difference between the two prices is the per unit subsidy granted to the farmers by the government. The price at which the government buys crops from the farmers is called the procurement price.
Such procurement by the government also has a long run impact. It encourages the farmers to grow crops which are regularly procured.
(3) Infrastructural Subsidy:
Private efforts in many areas do not prove to be sufficient to improve agricultural production. Good roads, storage facilities, power, information about the market, transportation to the ports, etc. are vital for
carrying out production and sale operations. These facilities are in the domain of public goods, the costs of which are huge and whose benefits accrue to all the cultivators in an area.
No individual farmer will come forward to provide these facilities because of their bulkiness and inherent problems related to revenue collections (no one can be excluded from its benefit on the ground of
non-payment). Therefore the government takes the responsibility of providing these and given the condition of Indian farmers a lower price can be charged from the poorer farmers.
(4) Export Subsidies:
This type of subsidy is not different from others. But its purpose is special. When a farmer or exporter sells agricultural products in foreign market, he earns money for himself, as well as foreign exchange
for the country. Therefore, agricultural exports are generally encouraged as long as these do not harm the domestic economy. Subsides provided to encourage exports are referred as export subsidies.
tax issues in india

Topic: Resource mobilization
7) Which are the contentious tax issues in India that industry and citizens expect government to address? Discuss. (200 Words)
Indian tax system is a evolving system that is undergoing continuous reforms like VAT, end of Minimum alternate tax on FIIs, reduction of corporate tax, reductions of tariffs on industrial transactions, and
much more. However Indian tax system has not reached its optimal levels yet due to some contentious issues like--
issues faced by citizens

1. tax exemptions
2. attention towards vertical equity in place of horizontal one.
3. complex,opaque and distorted tax system and cumbersome return filing process.
4. dividend taxes
issues faced by industries

1. unpredictable taxation policy especially retrospective taxes e.g.
2. lack of administrative support, efficiency and proactive approach as well as no proper grievance redressal mechanism
3. taxation on intangibles such as intellectual property, advertising and branding exercises
4. classification of income as royalties and fee for technical services.
5. transfer pricing, concern regarding indirect transfers
6. taxation on subsidies and govt assistance
7. differential taxation system of different state governments (solution GST)
8. slow process of dispute resolution
you can also add

1. tax on pesnison and gratuity. not justified.
2. retrospective taxation.
3. MAT : the issue has risen due to contradictory tax laws. Needs to be refined
objectives of india for paris summit

framework of "objective in paris" for india contains following things-
-promoting sustainable processes and sustainable lifestyles across the globe.
-creation of regime where facilitative technology transfer replaces an exploitative market driven mechanism.
-common understanding of universal human progress.
to attain these objectives, india could do following-

-transforming key systems such as transport, energy, housing and food system.
-greater focus on sharing rather owning cars would impact fast growing emissions.
-changing lifestyles must begin in schools.
-better linkages are needed like afforestation in catchment of hydro projects to check silting.
govt policies regarding pulses.

Topic: Major crops cropping patterns in various parts of the country
6) Critically examine how government policies have impacted the cropping pattern and prices of pulses in India. (200 Words)
The reason for this anomaly can be found in the government's policies, which impact the cropping pattern and prices of pulses adversely:
(A) Unlike rice and wheat, the government does not procure pulses through FCI. Government only steps in to procure pulses when the market price falls below MSP. Therefore, exiting mechanism is
unreliable and leaves the farmers dependent on the vagaries of the market. In the absence of assured procurement, most farmers are reluctant to grow pulses, and instead continue to grow wheat and
rice.
(B) Given the shortfall in production of pulses, there has been exponential rise in pulse prices. In order to reduce the impact of this price rise on the consumer component, the government imposes export
controls besides allowing import at zero duty. This prevents the farmers from getting a better price for their produce in foreign markets, which then dis-incentivises them from producing more.
(C) Ever so often the government invokes the Essential Commodities Act. This forces private traders to liquidate stocks immediately. While this provides some short term respite from the spiralling prices, in
the long run this measure comes in the way of creating substantial buffer stocks for pulses.
(D) The suspension of commodity trading in futures of pulses further exacerbates the situation for it affects the dynamics of a robust price discovery mechanism.
(E) There is little institutional and infrastructural support of the government only adds to problem. Indian pulses have low genetic yields and are vulnerable to pests. The lack of drought- and disease-
resistant varieties of pulse is a major hindrance to adoption of pulses by farmers, thus forces them to grow other cereals/cash crops - thus feeding into the low production.
(F) Finally, the creation of an extensive irrigation network in the Indo-Gangetic plain leads to cultivation of cereals and cash crops leaving pulses to less productive and rain-fed regions.
Against this background, the need of the hour is a overhaul of government's policy vis-a-vis pulses production. Focus must be on identifying land for growing pulses, promoting yield-augmenting varieties
and providing farmers better access to remunerative markets. A robust policy on these lines will not only help farmers in crop diversification, but will also help bring down the ever increasing prices of
pulses.
note: as some positives too.. like govt procuring pulses through nafed.
fisheries sector:potential, problems, measures

Topic: Economics of animal-rearing.
7) Examine the potential of and problems faced by Indias fisheries sector and measures taken to address these problems. (200 Words)
Fisheries in India is a very important economic activity and a flourishing sector. This sector has immense potential. which if realised can make a difference in the lives of million depending on fishing as
source of livelihood:
(A) The sector currently employees about 15 million people. It has the potential to improve the livelihoods options of coastal communities provided it is organised on scientific and commercial lines.
(B) India is world's third largest producer of fish. Increased production can contribute significantly to our export, especially since Indian fishing products are well received the world over. In this regard, it
has the potential of encouraging food processing industries catering to the global demand
(C) Besides being a major sources of revenue, this sector also holds key to achieving food as well as nutritional security, given that fishes are one of the richest sources of protein.
(D) Finally, given that thousands of villages settled along India's 8000 km long coastline are entirely dependent on fishing, any improvements can lead to economic and social development of these people.
Despite this, the sector continues to be plagued by a myriad of problems:

(A) While, inland fish production has declined due to proliferation of water control structure, loss of habitat and indiscriminate fishing, marine fishing has declined due to depleting resources, energy crisis
and resultant high cost of fishing
(B) The sector is also experiencing loss of biodiversity on account of adverse climate change.
(C) Large % of this sector continues to remain structured on unorganised and traditional lines with little proliferation of technological improvements.
(D) India has yet to realise the potential of deep-sea fishing.
(E) Poor infrastructure especially in relation to marine fishing results in significant post harvest losses.
(F) Poor quality of fish feed remain a challenge
(H) Security of fishermen especially along the maritime boundaries with Sri Lanka and Pakistan remains a concern.
In this light, the government has taken the following measures:

(A) Blue Revolution, on lines of white revolution announced. It envisages to transform the fisheries sector with increased investment, better training and development of infrastructure.
(A) Government seeks to undertake initiatives to tap the potential of neglected water bodies like wetlands, brackish waters, floodplain lakes, ponds and tanks for breeding purposes though the use of
modern technologies.
(C) Making available quality fish feed - to improve quality of fish produce
(D) Encouraging fishermen to use technology include - cage culture and GPS.
(E) Allowing FDI upto 49% in deep sea fishing, which could encourage technology transfer and improve India's capabilities in this regard.
merger of fmc and sebi

merger of forward market commission (fmc) and sebi-
+ves-
-fmc was forced to function like subordinate to ministry of consumer affairs without statuary powers.
-it was handicapped in term sof regulatory and manpower resources required.
-merged regulator will enhance integrity of finance market and boost liquidity and improve price discovery process.
-unified regulator will also have impact on spot commodities market.
challenges for merger-

-jurisdictional powers of state govt over agricultural marketing and political sensitivities involved in farm commodities.
-price volatility in agri commodities cant be compared to stocks or bonds.
-growth of commodity market is also in problem coz of lack of institutional players to impart greater liquidity in trading.
merger will sort out some of these problems though.
imp point- now govt should look at merging insurance and pension regulators and then can look towardsw unifying the financial market as a whole.
financial prdcts selling recommendations

Topic: Resource mobilization; Effects of liberalization on the economy
8) Recently the Committee to Recommend Measures for Curbing Mis-selling and Rationalising Distribution Incentives in Financial Products made recommendations on insurance, mutual funds and pension
products. Examine these recommendations and analyse their implications. (200 Words)
A financial product serves three basic functions - investment, protection and annuity. However, financial products are often mis-sold to consumers on account of half-baked disclosures, badly constructed
products and uneven distribution incentives across the different products which promote the sale of certain products with high commissions, even if they do not match consumer requirements.
A committee to curb mis-selling and rationalize distribution incentives in financial products headed by Sumit Bose has recommended the following measures to streamline selling of insurance, mutual funds
and pension products.
1.Products which have the same function but come under different regulating agencies should be clubbed under single regulatory head. For example, Investment products should be governed by rules set by
SEBI.
2.Investment benefits and costs should be clearly specified for the benefit of investor.
3.Disclosures must be made in a manner that makes lay investors understand the impact of costs, early exit, ideal holding period and returns.
4.The markets should have uniform commission structure so that distributors favor all products indiscriminately.
5.Creation of relevant benchmarks by an independent agency to truly reflect the performance of the investor's money
6.Doing away with multiple charges and introducing a unified charge called the expense charge.
7.Punishment for illegal practice of rebating.
The recommendations of this report will bring transparency and hugely benefit the consumers of financial products if implemented. However, it will adversely affect LIC, the biggest buyer of government
securities and stakes, and hence the government itself.
The adequate policy for the government will be to lower its dependence on LIC gradually and let the financial product market be consumer friendly
Key recommendations in short -
Financial products should have flexible investment options

Cost of surrender should be reasonable
Returns should be clearly disclosed at a point of sale
Phase out upfront fees for payment
Similar tax and lock in structure for similar products
Common distributer regulation, single registry for distributers
Regulations of products should be seen in terms of functions
Lead regulator should fix the rules for the product.
challenges for healthcare bpo sector

health care BPO sector in india is facing stiff competition from bcoz-
low cost locations are emerging

most of the USA vendors are specialists in healthcare sector and provide various services.
data privacy is another challenge in personal healthcare.
rising salary levels, inflationary pressure on overall cost of infra, fluctuating exchange rates, other infra challenges like power, broadband connectivity.
concerns regarding policy framework in tax laws, ipr protection laws and clinical trial laws.
thus, india is loosing market to philippines and usa.
why india is preferred-
high no. of healthcare professionals available.

at affordable cost
large patient pool
reduced time and cost for recruitment.
sc recommend on money laundering

Topic: Prevention of Money Laundering
5) The Supreme Court-appointed Special Investigating Team on black money has come out with a slew of recommendations to curb various ways of money laundering. Critically comment on some of these
recommendations. (200 Words)
Recommendations and their analysis
1. The commitee recommended abolishing trade in Participatory notes and making the owners KYC compliant
Benefit- Trade in P-notes promoted anonymity. This medium was being used to launder black money into white. Regulation would identify the authorities to collect more information about the owners.
Challenge- The step could wither away the investors, resulting in a minor blip to the economy.
2. Putting a cap on cash transactions

Benefit- Cash transactions are difficult to trace. The step would provide more information to tax authorities.
Challenge- Implementation is a big issue especially in the wake of insufficent financial literacy and finanial inclusion.
3. Giving mechanism for SEBI to investigate sudden massive hike in share indices.
Benefit- It will check against insider trading and will also regulate speculative trading.
Challenge- Differentiating between legal and illegal trading is a challenge.
4. Other recommendation also include to set up additional courts and increase regulatory insights in educational institutions, cricket, religious donations where black money is often stored.
Benefit- WIll expand the coverage against black money.
Digital India :where it can be applied?

changes in psl..
To enhance credit to Small and marginal farmers, a separate sub limit of upto 8% (for 1st year - 7% and 2nd year - 8%) is being introduced for the first time.
Loans for agri-processing & agri-infrastructure would be included in PSL without any limit on the size of loans.
Loans to Medium Enterprises being included in PSL.
For the first time a separate sub limit of 7.5% of ANBC is being created for the Micro Enterprises.
Loans upto Rs.5 crore for Social infrastructure, like schools and health care facilities, drinking water facilities, sanitation facilities etc. are being included under PSL, for towns of less than 1
lac population.
Renewable Energy sector is being added to the PSL, upto Rs.10 crore loans.
Introduction of Priority Sector Lending Certificate (PSLCs), which will provide a market-driven incentive for efficiency, will enable banks to sell their surplus lending and thus earning a
premium for their efficiency/geographical spread.
Progress to be monitored quarterly and not at the end of the year.
Highlights of the Budget 2015-16:

Highlights of the Budget 2015-16:
Self Employment and Talent Utilisation (SETU) to be Established:
Government has announced the setting up of a Self- Employment and Talent Utilisation (SETU) mechanism.
What is it?
It will be a Techno-Financial, Incubation and Facilitation Programme to support all aspects of start up businesses, and other self-employment activities, particularly in technology-driven areas.
An amount of Rs.1000 crore is being set up initially in NITI Aayog for SETU.
ATAL Innovation Mission (AIM) to be Set up:

What is it?
AIM will be an Innovation Promotion Platform involving academics, entrepreneurs and researchers and draw upon national and international experiences to foster a culture of innovation, R&D and
scientific research in India.
The platform will also promote a network of world-class innovation hubs and Grand Challenges for India. Initially a sum of Rs.150 crore will be earmarked for this purpose.
Corporate Tax to be Reduced:
The Finance Minister has said that the Corporate Tax Rate is proposed to be reduced from the current 30% to 25% over the next 4 years.
Why?
This is expected to lead to higher level of investment, higher growth and more jobs.
The reduction will be accompanied by rationalization and removal of various kinds of exemptions and incentives which is leading to a large number of tax disputes. The effective collection of Corporate Tax
today is about 23%.
Corporate tax rate is a tax collected from companies. Its amount is based on the net income companies obtain while exercising their business activity, normally during one business year. Revenues from the
Corporate Tax Rate are an important source of income for the government of India. It is a Direct tax.
GST to be Implemented:
The Finance Minister has said that his government is moving forward on various fronts to implement Goods and Services Tax (GST) from the next year. GST, on which his government introduced a Bill in
the last session of the parliament, is expected to play a transformative role in the way our economy functions. It will add buoyancy to our economy by developing a common Indian market and reducing the
cascading effect on the cost of goods and services, Shri Jaitley added. The Finance Minister said that as a part of the movement towards GST the Education Cess and the Secondary and Higher Education
Cess are to be subsumed in the Central Excise Duty.
GST:
The goods and services tax (GST) is a comprehensive value-added tax (VAT) on goods and services. It is an indirect tax levy on manufacture, sale and consumption of goods as well as services at a
national level.
Through a tax credit mechanism, this tax is collected on value-added goods and services at each stage of sale or purchase in the supply chain.
The system allows the set-off of GST paid on the procurement of goods and services against the GST which is payable on the supply of goods or services. However, the end consumer bears this tax
as he is the last person in the supply chain.
Experts say that GST is likely to improve tax collections and boost Indias economic development by breaking tax barriers between States and integrating India through a uniform tax rate.
What are the benefits of GST?
Under GST, the taxation burden will be divided equitably between manufacturing and services, through a lower tax rate by increasing the tax base and minimizing exemptions.
It is expected to help build a transparent and corruption-free tax administration. GST will be is levied only at the destination point, and not at various points (from manufacturing to retail outlets).
Currently, a manufacturer needs to pay tax when a finished product moves out from a factory, and it is again taxed at the retail outlet when sold.
How will it benefit the Centre and the States?
It is estimated that India will gain $15 billion a year by implementing the Goods and Services Tax as it would promote exports, raise employment and boost growth. It will divide the tax burden
equitably between manufacturing and services.
What are the benefits of GST for individuals and companies?
In the GST system, both Central and State taxes will be collected at the point of sale. Both components (the Central and State GST) will be charged on the manufacturing cost. This will benefit
individuals as prices are likely to come down. Lower prices will lead to more consumption, thereby helping companies.
Why are some States against GST; will they lose money?
The governments of Madhya Pradesh, Chhattisgarh and Tamil Nadu say that the information technology systems and the administrative infrastructure will not be ready by April 2010 to implement
GST. States have sought assurances that their existing revenues will be protected.
The central government has offered to compensate States in case of a loss in revenues.
Some States fear that if the uniform tax rate is lower than their existing rates, it will hit their tax kitty. The government believes that dual GST will lead to better revenue collection for States.
However, backward and less-developed States could see a fall in tax collections. GST could see better revenue collection for some States as the consumption of goods and services will rise.
National Investment and Infrastructure Fund to be Set up:
The government has proposed to set up this fund. An annual flow of Rs.20,000 crore is ensured by the government for the NIIF.
What it does?
This will enable the Trust to raise debt, and in turn, invest as equity, in infrastructure finance companies such as IRFC (indian railway finance corporation) and NHB. The infrastructure finance
companies can then leverage this extra equity, manifold.
Forwards Markets Commission to be Merged with Sebi:
The Union Finance Minister has proposed to merge the Forwards Markets Commission with SEBI.
Why? To strengthen regulation of commodity forward markets and reduce wild speculation.
Enabling legislation, amending the Government Securities Act and the RBI Act is proposed in the Finance Bill, 2015.
About FMC:
Forward Markets Commission (FMC) is a regulatory authority for commodity futures market in India. It is a statutory body set up under Forward Contracts (Regulation) Act 1952.
The Commission functions under the administrative control of the Ministry of Finance, Department of Economic Affairs, Government of India.
The Act provides that the Commission shall consist of not less than two but not exceeding four members appointed by the Central Government, out of them one being nominated by the Central
Government to be the Chairman of the Commission.
The functions of the Forward Markets Commission are as follows:
To advise the Central Government in respect of the recognition or the withdrawal of recognition from any association or in respect of any other matter arising out of the administration of the Forward
Contracts (Regulation) Act 1952.
To keep forward markets under observation and to take such action in relation to them, as it may consider necessary, in exercise of the powers assigned to it by or under the Act.
To collect and whenever the Commission thinks it necessary, to publish information regarding the trading conditions in respect of goods to which any of the provisions of the Act is made applicable,
including information regarding supply, demand and prices, and to submit to the Central Government, periodical reports on the working of forward markets relating to such goods;
To make recommendations generally with a view to improving the organization and working of forward markets;
To undertake the inspection of the accounts and other documents of any recognized association or registered association or any member of such association whenever it considers it necessary.
Gold Monetisation Scheme:
The Finance Minister has proposed to introduce Gold Monetisation Scheme, which will replace both the present Gold Deposit and Gold metal Loan Schemes.
The new scheme will allow the depositors of gold to earn interest in their metal accounts and the jewellers to obtain loans in their metal account.
Banks/ other dealers would also be able to monetize this gold.
It was also announced that the Government shall commence work on developing an Indian Gold Coin, which will carry the Ashok Chakra on its face. Such an Indian Gold Coin would help reduce the demand
for coins minted outside Indian and also help to recycle the gold available in the country.
Act East Policy of the Government:
The Unin Finance Minister has announced setting-up of manufacturing hubs in CMLV countries, namely, Combodia, Myanmar, Laos and Vietnam.
This Act East policy of the Government endeavours to cultivate extensive economic and strategic relations in South-East Asia.
In order to catalyse investments from the Indian private sector in this region, a project development company will set-up the manufacturing hubs in CMLV countries through separate Special Purpose
Vehicles (SPVs).
Micro Units Development Refinance Agency (MUDRA) Bank:
The Finance Minister has proposed to create a Micro Units Development Refinance Agency (MUDRA) Bank, with a corpus of Rs. 20,000 crore, and credit guarantee corpus of Rs. 3,000 crore.
What it does?
MUDRA Bank will refinance Micro-Finance Institutions through a Pradhan Mantri Mudra Yojana.
In lending, priority will be given to SC/ST enterprises.
Benefits:
These measures will greatly increase the confidence of young, educated or skilled workers who would now be able to aspire to become first generation entrepreneurs.
Existing small businesses, too, will be able to expand their activities.
By floating MUDRA bank, the Centre has ensured credit flow to SMEs sector and has also identified NBFCs as a good fit to reach out to them.
People will now be able to get refinance at subsidised rate and it would be passed on to the SMEs. Moreover, it would enable SMEs to expand their activities
Paramparagat Krishi Vikas Yojna and Pradhan Mantri Gram Sinchai Yojna to be Fully Supported:
Reinforcing the governments commitment to farmers, Union Finance Minister has flagged the Pradhan Mantri Gram Sinchai Yojna aimed at per drop more crop and Paramparagat Krishi Vikas Yojna
(organic farming) as the two most important progammes in the farm sector to enhance productivity and production.
Paramparagat Krishi Vikas Yojna: It has been formulated to promote Organic Farming. The objective is to promote eco-friendly concept of cultivation reducing the dependency on agro-chemicals and
fertilizers and to optimally utilize the locally available natural resources for input production.
Pradhanmantri Gram Sinchai Yojana is aimed at irrigating the field of every farmer and improving water use efficiently to provide Per Drop More Crop.
Tourist Visa on Arrival Scheme to be Extended to 150 Countries Gradually:
The Finance Minister has announced to extend Visa on Arrival Facility (VOA) to 150 countries in stages from the current 43.
TOURIST VISA ON ARRIVAL SCHEME:
It was introduced on January 1, 2010. It was initially trialed for citizens of five countries. Now, the Citizens of 43 countries can avail this facility.
Eligibility:
Citizens of the identified countries can avail this facility and:
whose sole objective of visiting India is sight-seeing, casual visit to meet friends or relatives, etc.,
who do not have a residence or occupation in India;
who hold passports with minimum six months validity, and a re-entry permit if that is required under the law of the country of nationality of the applicant;
who is a person of assured financial standing (individuals must have a return ticket and sufficient money to spend during his/her stay in India);
who is not considered an undesirable person;
Validity: It will be valid for 30 days with single entry facility.
More details:
It shall be non-extendable and non-convertible except with the approval of the Ministry of Home Affairs in exceptional circumstances.
The Tourist Visa-on-Arrival will be provided only at designated international airports, namely, Bangalore, Chennai, Delhi, Hyderabad, Kochi, Kolkata, Mumbai and Trivandrum. It will not be available
at any other Immigration Check Post.
It shall be allowed for a maximum of two times in a calendar year to an applicant with a minimum gap of two months between each visit.
It shall not be applicable to holders of Diplomatic/Official passports.
8 schemes delinked from Central support:
The government has decided to delink eight Centrally Sponsored Schemes (CSS), including National e-Governance Plan, Backward Regions Grant Funds, Modernisation of Police Forces and Rajiv Gandhi
Panchayat Sashaktikaran Abhiyaan (RGPSA), from its support.
Why?
As much as 42% of union taxes will go to States as per the recommendation of 14th Finance Commission. The government has decided to accept this recommendation so as to reduce its fiscal
burden.
The 8 schemes delinked from Centres support are: National e-Governance Plan, Backward Regions Grant Funds, Modernisation of Police Forces, Rajiv Gandhi Panchayat Sashaktikaran Abhiyaan (RGPSA),
Scheme for Central Assistance to the States for developing export infrastructure, Scheme for setting up of 6000 Model Schools, National Mission on Food processing and Tourist Infrastructure.
SARFAESI Act to cover NBFCs:
The Budget proposal to treat non-banking financial companies (NBFCs) as financial institutions under the SARFAESI Act (The Securitization and Reconstruction of Financial Assets and Enforcement of
Security Interest Act, 2002 ) will be a big boost to the sector. A long-standing demand of the industry, this will allow NBFCs to enjoy the benefits that presently apply only to banks.
It is proposed that NBFCs registered with RBI and having asset size of Rs.500 crore and above will be considered for notifications as financial institution in terms of the SARFAESI Act, 2002.
Present Scenario:
Currently, NBFCs are not covered under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act.
Though the Reserve Bank of India has tightened the NPA recognition norms, it has not laid out clear guidelines either on the recovery mechanism or the provisions for NBFCs to take action against
defaulters under SARFAESI Act.
Most of the NBFCs are unable to recover bad debts. There have been lakhs of cases that are dragged to court every year by NBFCs. Hence, the working group of RBI, headed by Usha Thorat, had
recommended that the Act be extended to cover the NBFCs also.
SARFAESI Act:
This act allows banks and financial institutions to auction properties (residential and commercial) when borrowers fail to repay their loans. It enables banks to reduce their non-performing assets (NPAs) by
adopting measures for recovery or reconstruction.
Upon loan default, banks can seize the securities (except agricultural land) without intervention of the court.
SARFAESI is effective only for secured loans where bank can enforce the underlying security. In such cases, court intervention is not necessary, unless the security is invalid or fraudulent. However, if
the asset in question is an unsecured asset, the bank would have to move the court to file civil case against the defaulters.
The SARFAESI Act also provides for the establishment of Asset Reconstruction Companies (ARCs) regulated by RBI to acquire assets from banks and financial institutions.
The Act provides for sale of financial assets by banks and financial institutions to asset reconstruction companies (ARCs). RBI has issued guidelines to banks on the process to be followed for sales of
financial assets to ARCs.
The Act provides three alternative methods for recovery of non-performing assets, namely:
1. Securitisation
2. Asset Reconstruction
3. Enforcement of Security without the intervention of the Court
The provisions of this Act are applicable only for NPA loans with outstanding above Rs. 1lac. NPA loan accounts where the amount is less than 20% of the principal and interest are not eligible to be dealt
with under this Act.
The Act empowers the Bank:
To issue demand notice to the defaulting borrower and guarantor, calling upon them to discharge their dues in full within 60 days from the date of the notice.
To give notice to any person who has acquired any of the secured assets from the borrower to surrender the same to the Bank.
To ask any debtor of the borrower to pay any sum due or becoming due to the borrower.
Any Security Interest created over Agricultural Land cannot be proceeded with. If the borrower fails to comply with the notice, the Bank may take recourse to one or more of the following measures:
Take possession of the security

Sale or lease or assign the right over the security
Manage the same or appoint any person to manage the same
AMRUT: explained
What is AMRUT?
AMRUT is the new avatar of the Jawaharlal Nehru National Urban Renewal Mission (JNNURM). But in a significant departure from the earlier mission, the Centre will not appraise individual projects.
Details of the Mission:
AMRUT adopts a project approach to ensure basic infrastructure services relating to water supply, sewerage, storm-water drains, transportation and development of green spaces and parks with
special provision for meeting the needs of children.
Under this mission, 10% of the budget allocation will be given to states and union territories as incentive based on the achievement of reforms during the previous year.
AMRUT, which seeks to lay a foundation to enable cities and towns to eventually grow into smart cities, will be implemented in 500 locations with a population of one lakh and above.
It would cover some cities situated on stems of main rivers, a few state capitals and important cities located in hilly areas, islands and tourist areas.
Under this mission, states get the flexibility of designing schemes based on the needs of identified cities and in their execution and monitoring.
States will only submit state annual action Plans to the centre for broad concurrence based on which funds will be released. But, in a significant departure from JNNURM, the central government will
not appraise individual projects.
Central assistance will be to the extent of 50% of project cost for cities and towns with a population of up to 10 lakhs and one-third of the project cost for those with a population of above 10 lakhs.
heat waves.
why?
the andhra-telangana region is semi arid area and such heat waves are not abnormal situation in the summer season every year. but this year there was a sudden rise in the temperature in month of may
after the initial relief till april due to wet spells. further, no proper policy by the govt deepened the crisis.
also, the increase in the temperature in south india in last 100 years in more than the global average i.e. 0.8% is global average and 2-4% increase in the south india.
problems-
failure of awareness about the heat related illness, failure of public health system in remote areas, lack of intervention and foresight by states.
lessons from other states-

$ orissa-
schools and colleges shift to early morning sessions.
public transport doesnt operate in afternoon.
mgnregs too stops during this time.
distt collectors are ordered to ensure that no labourer works between 11am to 3 pm.
public health centers are to be equipped with ice slabs to treat patients.
govt put ads to advice ppl.
$ gujrat-
municipal corporation of ahemdabad evolved a heat alert system.
heat action plan to give information and prepare preventive measures.
what to do?-
-do as above states are doing.
-classify heat waves as the national calamity which will make it responsibility on govt to make sure that prevention, rehabilitation, compensation measures are effectively provided.
-access to potable water.
-provisions for proper shelters like night shelters of winter.
-health care workers can be trained to deal with it.
CHECK IT..ACHIEVEMENTS..
Achievements - Ministry of Consumer Affairs, Food and Public Distribution
Strengthening farmer welfare and food security
In order to give relief to the farmers affected with unseasonal rains and to save them from distress sale of wheat, quality norms for procurement relaxed. The Central Government decid
to reimburse amount of value cut on MSP, if any imposed, to the states so that farmers get full Minimum Support Price (MSP) even for shrivelled and broken wheat grains or having lus
loss. Such a farmers centric step was taken first time by any Central Government.
An action plan is being finalized by FCI to provide better price support services to the farmers in the Eastern States, especially to the small and marginal in Eastern UP, Bihar, Jharkhan
West Bengal and Assam where at present procurement system has poor outreach to the farmers. It will save farmers from distress sale and exploitation by the middlemen. Improved MS
coverage will also encourage farmers to adopt technology and improve yield of paddy/ rice in these States, where productivity levels at present are below national average. This w
ultimately increase income and will bring in prosperity to the farmers of the region.
In the interest of farmers, FCI is also working on a procurement plan for pulses and oilseeds to ensure MSP for farmers for both the crops.
To ensure payment of minimum support price to more paddy farmers, millers levy on rice brought down to 25% in the Kharif Marketing Season 2014-15, and decided to abolish it fro
October, 2015. This will save farmers from exploitation and they will not depend on millers for selling their paddy.
This initiative has improved delivery of MSP to the farmers for paddy even in the situation of market prices ruling below the MSP, especially in the states of Andhra Prades
Telangana, Uttar Pradesh and West Bengal, where the farmers are substantially dependent on millers for selling their paddy.
During Kharif Marketing Season (KMS) 2013-14 only a quantity of 8.52 lakh MT of paddy had been purchased directly from the farmers by the State Agencies in unifi
Andhra Pradesh, but in KMS 2014-15, such direct purchase of paddy has gone upto 36.76 lakh MT in Andhra Pradesh and Telangana together. The reduction of levy in KM
2014-15 has not resulted in any substantial reduction of overall procurement of rice in these two States till date compared to KMS 2013-14.
Similarly in Uttar Pradesh, the procurement of paddy has gone up from 9.07 lakh MT in previous season to 18.18 lakh MT in current season and overall procurement of ri
has gone up from 11.05 lakh MT of previous season to 16.10 lakh MT till April, 2015.
In West Bengal also, the procurement of paddy has gone up from 5.79 lakh MT in previous season to 13.29 lakh MT in current season and overall procurement of rice h
gone up from 8.27 lakh MT to 13.31 lakh MT till April, 2015.
In order to ensure that beneficiaries of the National Food Security Act get entitled foodgrains positively, rules notified in January, 2015 for payment of food security allowance in the case
non-delivery of foodgrains to the beneficiary.
The central Government also decided to share 50% (75% in the case of Hilly and difficult areas) of the cost of handling & transportation of foodgrains incurred by the states and t
dealers margin so that it is not passed on to the beneficiaries and they get coarse grain Rs1/kg, wheat at Rs2/kg and rice at Rs 3/kg.
Improving foodgrain management

A high level committee of experts setup in August 2014 to recommend restructuring of Food Corporation India for improving foodgrains management, ensuring efficient MS
operations, scientific storage and strengthening foodgrain supply chain in the country. Action has been initiated on the report submitted by the committee.
To bring all operations of FCI Godowns online and to check reported leakage, Depot Online system initiated and integrated security system is being set up in all sensitive depots. In ord
to modernise foodgrain storage in the country, 20 lakh tons storage capacity is being created in the shape of Silos in first phase.
In order to have better targeting of other welfare schemes for poor, a committee of ministers set up under the chairmanship of Consumer Affairs, Food and Public Distribution. T
Committee not only decided continuation of foodgrain allocation for other welfare schemes but also nutritional support by providing milk and eggs etc under the schemes.
612.42 lakh tonnes of food grains allotted to States/UTs for distribution under Targeted Public Distribution System and Other Welfare Schemes during 2014-15.
Due to progressive procurements from farmers, the stock of foodgrains in central pool as on 1.4.2015 reached to 343.15 lakh tons against minimum buffer norms of 210.40 lakh tons.
Adequate supplies of food grains ensured during natural calamities of Hud-hud cyclone in Andhra Pradesh and devastating floods in J&K. Availability of sufficient foodgrains in No
Eastern States was also ensured inspite of disruption in major rail route because of gauge conversion work. 80,000MT foodgrains moved through roads every month besides creati
additional storage of 20,000 MT in the reason. Foodgrains also induct into Tripura via riverine route passing through Bangladesh.
An additional storage capacity of 43,480 MT has been created in the North East with funds amounting to Rs.76.85 crores. This storage capacity enhancement will help in meeti
foodgrain requirement of the reason.
Meeting with the representative of farmers, Chief Ministers of major sugarcane growing states and representatives convened to discuss measures to facilitate payment of sugarcane arrea
Accordingly to improve the liquidity of the sugar sector and to facilitate the payment of sugarcane arrears to the farmers following steps were taken:
Import duty on sugar first increased from 15% to 25% and than 40%.
The duty free import authorisation schemes for exporters withdrawn.
Decision to withdraw the excise duty on ethanol, for blending with petroleum, from next sugar season, so that the price benefit to the sugar mills could facilitate payment of
sugarcane arrears.
The policy for procurement of ethanol for blending with petrol also modified.
Promoting consumer protection
A conference of State Food Ministers organized and integrated action plan on tackling food inflation adopted in July 2014.
Potatoes and Onions notified Essential Commodities enabling State Governments to impose stock control orders on both the commodities and to take anti-hording measures.
Number of price reporting centres increased from 57 to 64 to strengthen price monitoring of 22 essential commodities by the Ministry.
To enhance supply of wheat during lean period and to moderate prices, 100 lakh tonnes of wheat approved for sale under Open Market Sale Scheme (OMSS) during 2014-15 and
lakh tonnes of additional rice released through Targeted Public Distribution System.
In order to ensure availability of fruits and vegetables at reasonable prices to consumers and wider selling option to farmers, fruits and vegetables delisted from the APMC Act in Del
Kissan Mandi set up for selling both the commodities. All other states were also advised to adopt the arrangement.
After 360 degree review of the Consumer Protection Act, comprehensive amendments finalised in the Act to ensure quick, inexpensive and simple redressal of consumers grievance
enabling e-filing of cases and not requiring personal appearance till the stage of admission, and time bound admission of cases proposed. A Central Consumer Protection Authority al
proposed to investigate unfair trade practices; initiate class action, order recall or replacement of defective products. Provision made for product liability to enable consumers to sue f
damages caused by defective products/ deficient services
Joint campaign organised with Heath, Financial Services and other departments for greater consumer awareness. During the last year the Department of Consumer Affairs intensified
multimedia campaign under the banner of Jago Grahak Jago. With special emphasis on rural areas, tribal areas and North East, the campaign makes consumers aware of th
rights/obligations. Joint campaigns were organized with the Reserve Bank of India, the Ministry of Health and the Ministry of Finance to focus on specific issues of consumer interests.
An Inter-Ministerial Group of key sectors that matters to consumers viz Agriculture, Food, Healthcare, Housing, Financial Services and Transport, to facilitate policy coherence a
coordinated action on consumer advocacy has been constitutes bedsides an Inter- Ministerial Committee to address the problem of Misleading Advertisement and Unfair Trade Practices.
A dedicated portal www.gama.gov to enable consumers to register their grievances against misleading advertisements (GAMA) launched. Six key sectors viz. food and agriculture,
heath, education, real estate, transport and financial services have included for this purpose. The complaints lodged are taken up with the relevant authorities or the sector regulators.
The consumer is informed after the action taken.
To provide a host of consumer services under one roof, Grahak Suvidha Kendras launched in six locations: Ahmadabad, Bangalore, Jaipur, Kolkata, Patna and Delhi on March 18,
2015. Such centres will be set up in every State in phased manner. They will provide guidance to consumers regarding consumer laws, the rights of the consumers, the procedure of
approaching Consumer Courts and various other consumer related issues including quality assurance and safety of products.
Strengthening quality assurance regime for Make in India
In order to strengthen the quality assurance regime for goods and services in the country, the amendments to the BIS Act finalised. The market surveillance for standards and testing of
products was made more effective.
Simplified standards conformity schemes launched so that industry can adopt the quality standards with ease and manufacture standardised products in the country.
Decision taken to set up five new BIS labs by March 2016 besides modernising the existing labs.
For better enforcement of standards, a new scheme enabling common consumer to get ISI marked products tested in BIS labs or BIS recognised labs. A mobile App is also being
launched which will enable consumers to verify the genuineness of the BIS marked products.
Facilities provide to engineering students for hands-on Skill Development in National Test House laboratories of BIS.
Introduction of mandatory Red/Brown/Green Dots for cosmetics to indicate Non-Veg/Veg. Origin on the demand of common consumer.
new foreign policy

new foreign policy 2015-20-
the policy on one hand want to realign the multiple schemes with the objective of reducing the complexities and on the other hand it wants to promote increased use of technology to reduce transaction cost
and manual compliance.
some of its schemes-
1. merchandise export from india scheme (meis)-aimed to boost export of specific goods to specific markets.
2. service export from india scheme (seis)- to increase service export of notified services.
3. export promotion capital goods scheme (epcg)-incentives in proceedings regarding exports.
questions...
10) In the light of recent reports of governments thrust on Make in India campaign and
some pressing problems being faced by the navy and army, critically comment on Indias
defence budget and its performance in recent years.
10) Critically examine what effect the ban on cow slaughtering by some of the states in India will have on economy and society of India. (200 Words)
8) What is the importance of Great Compression in American history? Do you think India too can experience Great Compression? If so, suggest what policy measures need to be implemented by the
government. (200 Words)
10) Do you think increased importance on building physical infrastructure either by involving private or public means since independence is adversely affecting growth of human capital in India? Critically
evaluate. (200 Words)
7) In recent union budget, the union government has announced that it would amend criminal codes and introduce stringent provisions to punish tax evaders in an attempt to curb black money. Do you think
such measures will help in curbing circulation or stashing of black money in foreign accounts? In your opinion, ideally what should be governments approach? Critically examine. (200 Words)
6) What do you understand by net neutrality? Do you think regulating internet has negative consequences? Examine. (200 Words)
9) Even after the formation of NITI Aayog, the Plan and non-Plan expenditure distinction still continues as seen in recent union budget to guide governments expenditure. Why do you think so? What
are the benefits of removing such distinction as recommended by a committee previously? Examine. (200 Words)
1) Do you think disinvestment policy of government of India has succeeded in fulfilling its objectives? Critically analyse Indias disinvestment policy and its evolution since 1991.
1) Do you think disinvestment policy of government of India has succeeded in fulfilling its objectives? Critically analyse Indias disinvestment policy and its evolution since 1991.
8) On which sector should the newly launched Make in India campaign focus and why manufacturing or services? Substantiate.
6) Critically analyse the trend of institutional subsidised agriculture and its effect on agriculture and farmers in India during last two decades. (200 Words)
7) If self-reliance can be achieved in the strategic fields of space and nuclear technology, through dogged pursuit and by creating institutions of excellence with political support, there is no reason why it
cannot be done in the equally strategic area of military hardware. In your opinion, what needs to be done to improve and increase defence indigenisation and achieve same success as achieved in Space
sector in the defence sector in terms of developing own technology? Critically discuss. (200 Words)
9) The concept of ecological modernism, which sees technology and economic development as keys to solving big environmental problems, is gaining adherents (eco-modernists) and getting a lots of
attention these days. Elaborate this concept and examine how is it different from sustainable development approach. (200 Words)
3) Write a note on the cropping pattern of pulses in India. Examine why its prices in India are increasing and what needs to be done to control its price and make it affordable to poor. (200 Words)
4) For many years defence analysts are suggesting that India should create the post of Chief of Defence Staff (CDS). Critically examine why this suggestion is made and its importance for national security.
(200 Words)
step for exploration of oil and gas

in order to accelerate the pace of exploration and production of oil and gas in the country, the Government has taken various policy initiatives which are as under:-
i. A project to reassess hydrocarbon resources in all sedimentary basins of India.
ii. Appraisal of un-appraised areas of all sedimentary basins of India.
iii. Policy on non-exclusive multi-client speculative survey for assessment of unexplored sedimentary basins.
iv. Improved Oil Recovery(IOR)/Enhanced Oil Recovery (EOR)-new techniques are adopted by National Oil Companies (NOCs) to enhance oil recovery from fields.
v. Policy framework for relaxations, extensions and clarifications at the development and production stage under the Production Sharing Contract (PSC) regime for early monetization of hydrocarbon
discoveries.
vi. Policy for exploration in the Mining Lease (ML) areas after the expiry of exploration period.
vii. Encouraging exploration and exploitation of alternative energy sources, such as Coal Bed Methane(CBM), Shale Gas/Shale Oil and Gas Hydrates etc.
viii. Policy for exploration and exploitation of Shale Gas/Shale Oil resources by NOCs under the nomination Regime.
cyber security and govt efforts

Topic: basics of cyber security;
6) A recent study has indicated a dramatic rise in attacks by cyber criminals on Indian entities in recent years. Critically examine how these crimes should be tackled by concerned agencies and government.
(200 Words)
Reasons for this are:-

1)increasing digitization,e-commerce and e-governance without subsequent improving upon the security aspects.
2)low security spending by the companies.
3)people giving low priority to it and generally avoiding it many a times.
4)Cyber criminals continuously targeting India entities with more increased efforts.
Governmental steps to combat this:-

1)National Cyber Security Policy,2013 aimed at combating security threats.
2)Establishment of National Cyber Coordination Centre and a computer emergency response team to tackle such threats.
3)Cyber Crisis Management Plan [CMP] has been made for countering cyber attacks,cyber terrorism.
4)Infrastructure like NETRA, CMS exist but what they do is unclear.
But despite theseinitiatives,security threats have been increasing shows the low efficiency of above steps.Therefore a lot more needs to be done apart from these steps which includes:-
1)Government needs to have an elaborate security architecture to deal with various types of security threats.Finding out the loopholes in the present system and addressing those in the new security
architecture will also help.
2)This should be followed by regular security drills in order to increase awareness.
3)Further individuals have to be educated to understand the need to create backups and also not part with sensitive personal information discreetly.
4)Active collaboration on global level bilaterally as well as multilaterally in order to take steps to enhance cyber security.
5)Lastly and most importantly all the security agencies mandated with protecting the cyber space needs to work in synergy with each other along with each agency being mandated being various tasks.
SIT recommendations on black money

Topic: Money-laundering and its prevention
7) A recently set-up Special Investigative Team (SIT) on Black Money has recommended several measures to tackle the issue of black money circulation in its three separate reports. Comment on the
important recommendations of these reports. (200 Words)
The SIT headed by retired SC Justice M B Shah believes that double taxation treaties and mutual assistance treaties of income-tax with other countries were one-sided.
The various recommendations are as follows:
- Indias taxation treaties with other countries be redrafted,and penal provisions be introduced: It will help to attach the Indian assets of offenders
For example Indias double taxation avoidance agreement with Mauritius, where several money trails have gone cold due to lack of assistance from authorities there.
- Amend the Prevention of Money Laundering Act (PMLA) : It will introduce a provision under which there will be wider scope for Enforcement Directorate (ED) as it would be able to attach the properties of
those who do not bring back black money within a month of the end of the investigation.
Under the PMLA, the ED currently has the power to only attach properties bought with the proceeds of crime.
- Senior government appointees (RBI/Sebi/CBI/CVC chiefs, secretaries) should file affidavit stating they do not hold illegal money abroad: it will help to track investment abroad
- Central KYC registry of all data
- Database sharing among various departments : sharing will easily catch the loopholes if any
- Special courts be set up for trail under the Income Tax Act : will lead to speedy trials
revival of ppp. measures.

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To address the PPP model, the present economic scenario must be understood.
1) Corporate balance sheets are overburdened and debt ridden.

2) Banks have over capitalised. NPAs are huge.
3) International economic growth is slowly gaining traction.
4) China's advantage as a manufacturing hub is reducing due to increased labour wages.
In this context, the following measures shall be taken to revive PPP model :
1) PPP needs to be transformed into FPTP I.e first public than private. Public investment upfront during the high risk period and then private investment during the low risk
period is the way forward.
2) Need to develop our corporate bond market for long term financing.
3 Recapitalisation of PSBs with stringent measure to ensure the folly of NPAs doesn't return.
4) Indian economic diplomacy of attracting foreign investment presently is in the right direction and should be followed by ensuring "ease of doing business".
5) The public should be made aware and encouraged in invest in equity market and corporate bonds rather than gold.
Real Estate (Regulation and Development) Bill

Real Estate (Regulation and Development) Bill:
The Real Estate (Regulation & Development) Bill seeks to protect the interests of consumers and establish regulatory bodies at the Centre and States for ethical and transparent business practices in the
real estate sector.
Aim of the Bill: The bill aims at regulating contracts and transfer of property, both of which are under concurrent list. The bill will override the provisions of state real estate laws if found inconsistent.
Features of the bill:
The Bill regulates transactions between buyers and promoters of residential real estate projects. It establishes state level regulatory authorities called Real Estate Regulatory Authorities (RERAs).
Residential real estate projects, with some exceptions, need to be registered with RERAs. Promoters cannot book or offer these projects for sale without registering them. Real estate agents dealing
in these projects also need to register with RERAs.
50% of the amount collected from buyers for a project must be maintained in a separate bank account and must only be used for construction of that project. In the original Bill, 70% of the amount
had to be kept for this construction.
The Bill establishes state level tribunals called Real Estate Appellate Tribunals. Decisions of RERAs can be appealed in these tribunals.
The Bill provides for mandatory registration of all projects and real estate agents who intend to sell any plot, apartment or building with the Real Estate Regulatory Authority.
It makes mandatory the disclosure of all information for registered projects like details of promoters, layout plan, land status, schedule of execution and status of various approvals.
The Bill also includes a condition that prohibits a developer from changing the plan in a project unless 2/3rd of the allottees have agreed for such a change.
Benefits:
The Bill is expected ensure greater accountability towards consumers, and to significantly reduce frauds and delays.
It is expected to promote regulated and orderly growth of the real estate sector through efficiency, professionalism and standardization.
These measures are also expected to boost domestic and foreign investment in the sector and help achieve the objective of the Government of India to provide Housing for All by 2022, through
enhanced private participation.
public debt management agency

points against such separation of power coz in past-
1. large fiscal deficits meant that government borrowing program did have an effect on monetary policy, liquidity, cost of credit for private sector.
2. higher costs didnt deter govts from borrowing more.
3. foreign exchange market volatility had implications for debt management.
4. there are also conflicts between govt as owner of banks and issuer of debt.
further, in the past, there is no evidence to suggest that either debt management or monetary management has been compromised by RBI. thus, if ain't broke, whu to fix it?
government measures on black money

in the country, most of the black money is generated from the sectors of real estate, trading and manufacturing, contractors, gems and jewellery, services etc.
effective measures till now taken by govt are-

(i) introduction of a comprehensive new law in the ongoing Budget Session 2015, specifically to deal with black money stashed abroad providing for stringent penalties (equal to three times the amount of
tax payable) and prosecutions (rigorous imprisonment upto ten years with fine) in this regard.
(ii) constitution of a Special Investigation Team (SIT)
(iii) due emphasis on the enforcement to prosecute the offenders as earliest as possible to create a deterrent against tax evasion.
(iv)strengthening and streamlining the information collection and enforcement mechanism, inter alia, through extensive use of information technology, capacity building etc:
(v) joining the global efforts to combat cross-border tax evasion and tax fraud and to promote international tax compliance
(vi) renegotiation of Double Taxation Avoidance Agreements with other countries to bring the Article on Exchange of Information to International Standards and expanding Indias treaty network by signing
new DTAAs
(viii) exploring non-government sources to obtain information regarding undisclosed foreign assets
(ix) effectively utilizing the information received from treaty partners to combat tax evasion and avoidance.
growth prospects of india: current scenario.

growth prospect of india-
opportunities-
1. decline in the global crude oil prices. effect- will decrease inflation, CAD will come down.
2. augmentation in credit agencies' rating. effect- increase the investment
challenges-
1. unpredictable monsoons. food inflation will increase. agrarian distress.
2. decrease in savings.
3. implementation challenges of budget. like NIIB and MUDRA.
SUGGESTIONS-
1. growth of public investment in core sector. it will enhance private sector too.
2. political consensus has to be increased.
3. speedy completion of projects.
4. long term development credit.
limitations of GDP.
Topic: Indian economy Growth and Development
8) Write down some of the limitations of using GDP as an index of welfare of a country. (200 Words)
it suffers from certain limitations :

* Doesn't value intangibles like leisure, quality of life which go beyond economic growth
* Doesn't measure the quality and distributional aspects of growth. For e.g if the growth has been inclusive, sustainable etc.
* Doesn't taken into account the destruction caused to ecology
* Doesn't indicate gender disparities
* Doesn't reflect on how the growth has taken place. For e.g even a war can increase the GDP of a country
* Doesn't include social services [for e.g. Charitable work], household services[for e.g. work done by women at home], non-monetized economy[for e.g Barter economy] or Black Money
However, GDP shouldn't be discarded totally, but should be supplemented by other Development indicators such as UN's Human Development Index, Human Poverty Index, Gross National Happiness etc for
better understanding welfare of a country.
RBI instruments of monetary policy.

Topic: Indian economy
9) What are the instruments of monetary policy of RBI? How does RBI stabilize money supply against exogenous shocks? Examine. (200 Words)
The instruments of monetary policy are of two types:

1. quantitative, general or indirect
2. qualitative, selective or direct
RBI often uses its instruments of money creation for stabilising the stock of money in the economy from external shocks. The exogenous variables are classified into policy and non-policy variables. The
former includes government expenditure, open market operations of the RBI, etc and latter variables like war and weather.Recent, monetary policy framework (MPF) also kept mum on
exogenous shocks.
RBI's Instruments to control exigencies are :

1. Bank Rate or Discount Rate - the rate at which RBI lends to the banking system. Through changes in it, the RBI affects the short-term interest rates in the money market, and through it the long-term
rates
2. Open market operations -These operations involve the sale or purchase of government securities.
3. Cash Reserve Ratio (CRR). A higher ratio means that the amount of cash available for creating credit is reduced and vice-versa.
4. Margin Requirements referred to the difference between the current value of the security offered for loans and values of loan granted.
5. Rationing of Credit referred to fixation of quotas for different business activities
6. Moral Suasion which implies informal suggestion by the RBI to commercial bank to co-operate with the general monetary policy.
7. sterilization. *
DEFINITION of 'Sterilization'
A form of monetary action in which a central bank seeks to limit the effect of inflows and outflows of capital on the money supply. Sterilization most frequently involves the purchase or sale of financial
assets by a central bank, and is designed to offset the effect of foreign exchange intervention. The sterilization process is used to manipulate the value of one domestic currency relative to another, and is
initiated in the foreign exchange market.
INVESTOPEDIA EXPLAINS 'Sterilization'

Sterilization requires a central bank to look beyond its borders by getting involved in foreign exchange. For example, the Federal Reserve purchases a foreign currency, in this case the yen, and the
purchase is made with dollars that the Fed had in its reserves. This action results in there being less yen in the overall market - it has been placed in reserves by the Fed - and more dollars, since the
dollars that were in the Feds reserve are now in the open market. To sterilize the effect of this transaction the Fed can sell government bonds, which removes dollars from the open market and replaces
them with a government obligation.
Emerging markets can be exposed to capital inflows when investors buy up domestic currencies in order to purchase domestic assets. For example, a U.S. investor looking to invest in India must use dollars
to purchase rupees. If lots of U.S. investors start buying up rupees, the rupee exchange rate will increase. At this point the Indian central bank can either let the fluctuation continue, which can drive up the
price of Indian exports, or it can buy foreign currency with its reserves in order to drive down the exchange rate. If the central bank decides to buy foreign currency it can attempt to offset the increase of
rupees in the market buy selling rupee-denominated government bonds.
measures to increase solar power.
Encouragement of Solar Power Projects
The Government encourages setting up of solar power projects through various measures like:-
(i) Grant of subsidy on off-grid applications.

(ii) Provision for renewable purchase obligation for solar has been made in the National Tariff
Policy.
(iii) Concessional Import duty/Excise duty exemption for setting up of solar power plants,
accelerated depreciation and tax holiday.
(iv) Generation based incentive and facility for bundled power for Grid connected Solar Power
Projects through various interventions announced from time to time.
(v) Several R&D efforts have been initiated for new technologies and improvement in efficiency.
MAT related issue

Topic: Resource mobilization
8) Recently, the Indian government issued notices to foreign institutional investors (FIIs) to extract Rs 40,000 crore from them under a law called minimum alternate tax (MAT). Critically examine why this
law was enacted and what are its objectives. Also examine why some economists regard this law as bad and unwanted. (200 Words)
In the past, several companies despite showing profits on their profit and loss account did not pay any tax to the government on account of a host of deductions and exemptions available to them under the
IT Act. Such companies are known as 'Zero Tax' companies and it was with the objective of capturing these companies within the tax net, that the government introduced a minimum alternate tax (MAT)
payable at the rate of 18.5% of their book profits. Though, the definition of 'company' under the IT Act is broad enough to capture all companies, local and foreign, historically, foreign investors did not paid
MAT, as it was believed that only Indian companies were liable. This belief was strengthened in the face of a 2010 ruling of the tax body. However, by a 2012 decision, the government changed its stance
and has decided to apply MAT to foreign companies also. Many economists argue against this stand of the government because:
(1) Notices to foreign investors seeking MAT arrears will lead to the reopening of the past transactions. This is bound to confusion besides negatively affecting the investor confidence.
(2) The timing of these notices in unfortunate given that various sectors of the Indian economy are in dire need of foreign investment. This move is bound to scare off foreign investors from making long-
terms investments.
(3) In the short term it may induce panic selling in debt markets leading to a weakening of the rupee and higher interest rates.
While the objective of MAT is not bad per se, the manner in which the imposition of tax on foreign companies has been dealt with is questionable. The government's stand seems to fly in the face of its
promise of no tax terrorism. Hence, there is a need to revisit the government's decision.
capital account convertibility

Topic: Effects of liberalization on the economy
7) What do you understand by Capital Account Convertibility (CAA)? There is a debate going on whether India should go for full CAA or for partial CAA. Examine the advantages and disadvantages of both
full and partial CAA. Based on this examination, suggest whether India should go for full CAA or not. (200 Words)
Capital Account Convertibility refers to the ability to transact local financial assets into foreign financial assets and vice-versa freely and at market determined exchange rates.This theory,to enable third
world economies to grow as globalised economies,was proposed by the Tarapore Committee setup by the RBI.
Preconditions :
CAC shall be introduced in an economy only when there is low inflation,low fiscal deficit,low NPAs,high Forex Reserves,functional independence of the Central Bank,no restrictions on Gold movement.
Advantages :
1. Availability of large funds by improved access to international financial markets
2. Reduction in cost of capital
3. Incentive for Indians to acquire and hold international securities and assets
4. Greater financial competitiveness
5. External commercial borrowing without RBI or Govt approval
6. Indian residents can hold and transact foreign currency denominated deposits with Indian banks
7. Certain class of financial institutions and later NBFCs can access global financial market
8. Banks and financial institutions can trade in Gold globally and issue loans
Disadvantages :
1.Market determined exchange rates being higher than officially fixed exchange rates can rise import prices and cause Cost-push inflation
2.Improper management of CAC can lead to currency depreciation and affect trade and capital flows
3.The advantages have been found to be short lived as per studies and also International financial institutions are skeptical about CAC post 2008 crisis.
4.Speculative activity can lead to capital flight from country as in case of some South East Asian economies during 1997-98
5.Imposing control would become difficult in a globalised environment once CAC is introduced
The RBI and SEBI are making regulations to introduce CAC and the proposed Financial SEZ GIFT is said to first avail it in India.Though this could enable corporates to raise foreign currency loans and
increase trade and investment as per Make in India policy,the necessary preconditions shall be seen to be met before its hasty introduction in order to make an effective and safe use of CAC.
solution of traffic congestion-nice points.

Topic: urbanization, their problems and their remedies.
1) Most of the Indian cities which are undergoing rapid urbanization are facing severe problem of traffic congestion. In your opinion, how can traffic congestion be reduced or eliminated? Discuss. (200
Words)
Charging peak-hour tolls
1-> Governments can charge people money to enter all the lanes on major commuting roads during peak hours. If tolls were set high enough and collected electronically number of vehicles on each major
road during peak hours could be reduced enough so that vehicles could move at high speeds.
Active Traffic Monitoring
1-> Another way to manage congestion is by simply providing information to drivers.
Intelligent Road Marking
1-> An intelligent road marking system that works by displaying information for each driver individually, updating them about the traffic situation, providing helpful hints, and alerting them to potential
hazards.
Smart GPS's
1-> GPS devices are getting better all time. Some can tap into local traffic reports and inform driver of delays and road stoppages. In turn, GPS can recommend an alternative route.
Traffic Signal Coordination
1-> Signal coordination works exceptionally well when traffic moves in a one-way direction. This allows the signal lights to be coordinated in such a way that drivers can expect a long chain of consecutive
green lights. At the same time, when two-lane streets are converted to one-way, parallel streets are converted to be one-way in the opposite direction.
Reversible Lanes
1-> Also known as directional lanes, this is the practice of preferentially choosing direction of lane flow according to the morning and evening peak hours. For example, by using overhead signal lights, the
capacity of a road can be increased in one direction and reduced in the
other depending on the time of day.
Restricted Lane Changes
1-> This low-tech solution does a decent job of keeping the traffic flowing. By marking certain stretches of roads or highways with solid non-passing lines, drivers are prevented from making precarious
lane changes.
Mass Transit
1-> Despite all these technological solutions, transit is still one of the best ways to alleviate traffic conditions, especially in cities with car-based societies. Think about a bus which has a
capacity of about 50 people. If the bus is full, you've taken about 49 cars off the street, replacing it with one bus.
-maintaining good quality roads, without patches.

-reducing encroachment on road side in india.
govt priority- business or environment

critically comment what should be governments priority to ensure ease of doing business or protecting environment and biodiversity? And explain why. (200 Words)
In a bid to boost the ease of doing business and eventually attract more
investment, GoI appears to be in process of tweaking the entire regulatory
regime put in place to prevent abuse of environment and rights of forest based
communities:
1.
self certification based regulatory mechanism in place
of certification from pollution control boards.
2.
administrative tribunal instead of judicial NGT to
review clearance on appeal.
3.
fast track clearance for power, mining and lining
projects.
4.
doing away with veto power of gram sabha over forest
lands.
5.
confine "No Go Area" to only very dense
forests having canopy cover of 70%.
concerns:
1.
self certification has a wide scope for misuse by industries.
2.
diluting NGT will only loosen enforcement of
environmental laws;
3.
fast tracking project clearance turning a blind eye to
environmental aspects will invite disasters; as seen Uttrakhand tragedy.
4.
diluting powers of gram sabha & tribal communities
goes against grass root democracy; will also encourage naxlite like movements
in concerned regions.
5.
reducing "No go areas" to 70% canopy cover
will lead to further degradation of already shrinking forest covers.
Country's growth should not come at the cost of environment and indigenous
communities; it is essential to balance the development and environment
concerns; any development oriented regulatory regime should satisfy
environmental mandate of present times.
insti in india on IPR.

Topic: issues relating to intellectual property rights.
6) Critically examine the laws and institutions governing the Intellectual Property Rights regime in India. Also examine what are the objectives of Indias IPR regime. (200 Words)
Intellectual property rights as a collective term includes the following independent IP

rights which can be collectively used for protecting different aspects of an inventive work for
multiple protection:
1) Patent - the first Indian Patent Law came in 1856. It was further amended in 2000, 2003 and 2005 in compliance with the TRIPS provision. India is a member of the Paris Convention, Patent Cooperation
Treaty, Budapest Treaty and recently India signed the "Madrid Protocol".
Ministry administering the IPR-
a.Department of Industrial Policy and Promotion

b.Ministry of Commerce and Industry
2) Copyrights - The Copyright Act, 1957, as recently amended in 1994 and 1999, governs the copyright protection in India. The total term of protection for literary work is the author's life plus 60 years.
a. Ministry of Human Resource Development
3) Geographical Indications (GI) - it is the the exclusionary rights for the indicator that identify the goods originated within the member nation territories, or area or region of that territory, where the
reputation or other attributes of the goods is essentially related to the geographic origin of the place. In India, the GIs regime is regulated by the Geographical Indications of Goods (Registration and
Protection) Act, 1999 and the Geographical Indication of Goods (Regulation and Protection) Rules, 2002.
eg: Basmati Rice, Kanjeepuram sarees and Darjeeling tea.
a.Department of Industrial Policy and Promotion

b.Ministry of Commerce and Industry
4) modernization programs for intellectual property offices was implemented during 9th and 10th plan.
5) ipr awareness programs have been also implemented.
6) national design policy in 2007 to envisages designed enabled indian industry.
7)initiatives on international fora- lead role in un's discussions esp in wipo.
The objectives of India IPR's regime are :
1. Efficient processing of IP applications by inducting additional manpower, augment IT facilities and automation in Intellectual Property Offices.
2. Strengthening public delivery of IP services.
3.Highest levels of transparency and user-friendliness.
4.Government trying to promote the awareness of IPR in such remote areas.
incentives for renewable energy sector

capital and/or interest subsidy,
100 per cent tax holiday on the earnings for 10 years,
generation based incentive, accelerated depreciation,
financing solar rooftop systems as part of home loan,
and concessional excise and custom duties, preferential tariff for power generation from renewables and National Clean Energy Fund (NCEF) support for on-lending to viable renewable energy projects by
Indian Renewable Energy Development Agency (IREDA)
foreign direct investment up to 100 per cent under the automatic route is permitted
ITBP..
Topic: Various Security forces and agencies and their mandate
10) Write a note on the structure and mandate of Indo-Tibetan Border Police (ITBP). (150 Words)
ITBPF was raised on 24 Oct,1962. It is a specialized mountain Force and most of the officers & men are professionally trained mountaineers and skiers.
Presently ITBP is deployed on border guarding duties from Karakoram Pass in Ladakh to diphu La in Arunachal Pradesh covering 3488 km of Indo-China Border and manning Border Outposts in the
Western,Middle and Eastern Sector of the Indo-China Border
Functions & Tasks of the force proves as a multi-dimensional force.

1.Vigil on the northern borders,detection and prevention of border violations, and promotion of the sense of security among the local populace.
2.Check illegal immigration , trans-border smuggling and crimes.
3.Security to sentive installations, banks and protected persons.
4.Restore and preserve order in any area in the event of disturbances
however the emerging challenges and the changing circumstances have led to adoption of newer roles by the ITBP:
1. disaster management : first responder for natural Disaster in Hamalayas, carried out numerous rescue and relief operations in various disaster situations
2. centre for training :established a National Centre for Training in Search, Rescue & Disaster
3. embassy security Embassy of India in Afghanistan since November, 2002..
4. UN peace keeping operation : deployed for peacekeeping operations in Angola, Namibia, Cambodia, Bosnia & Herzegovina, Mozambique and Kosovo.
5. security to the pilgrims: during Annual Kailash Mansarovar Yatra etc
NFSA,2013
About National Food Security Act, 2013:
Also called as the Right to Food act, this act aims to provide subsidized food grains to approximately two thirds of Indias 1.2 billion people.
It extends to the whole of India.
Under the provisions of this act, beneficiaries are able to purchase 5 kilograms per eligible person per month of cereals at the following prices:
Rice at 3 Rupees per kg

Wheat at 2 Rupees per kg
Coarse grains (millet) at 1 rupee per kg.
Salient features:
75% rural and 50% of the urban population are entitled for three years from enactment to five kg food grains per month at 3 Rupees , 2 Rupees, 1 Rupee per kg for rice, wheat and coarse grains
(millet), respectively.
The states are responsible for determining eligibility.
Pregnant women and lactating mothers are entitled to a nutritious take home ration of 600 Calories and a maternity benefit of at least Rs 6,000 for six months.
Children 6 months to 14 years of age are to receive free hot meals or take home rations.
The central government will provide funds to states in case of short supplies of food grains.
The state government will provide a food security allowance to the beneficiaries in case of non-supply of food grains.
The Public Distribution System is to be reformed.
The eldest woman in the household, 18 years or above, is the head of the household for the issuance of the ration card.
There will be state- and district-level redress mechanisms and State Food Commissions will be formed for implementation and monitoring of the provisions of the Act.
The poorest who are covered under the Antodaya yojana will remain entitled to the 35 kg of grains allotted to them under the mentioned scheme.
report on bankruptcy law reforms,+/-..

Topic: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.
7) Critically examine the importance of findings and recommendations of the Interim Report of the Bankruptcy Law Reform Committee for Indian economy. (200 Words)
To improve business condition in the country, Bankruptcy Law Reform Committee was setup by the government in Aug, 2014. Some of the recommendations of the committee which submitted its report
are-
1. Early recognition of financial distress in company and timely intervention by the government to rescue the organization
2. Liquidate un-viable company as soon as possible
3. Allow secured creditors apply for the rescue of the company, earlier it was filled after the company have been
defaulted by 50 per cent of its outstanding debt
4. Unsecured creditors representing 25 per cent of the debt be allowed to initiate rescue proceedings against the debtor company
5. Recommendation on individual solvency
Effect of recommendation if implemented-
Positive effect
1. Improve the rank of India on ease of
doing business
2. Easy exit policy are one of the criteria considered by entrepreneurs before setting any organization
3. Early intervention by the government will save the organization from liquidation
Negative effect-
1. Various provisions which deal with the early intervention by the government to save organization from being defaulted in already available under various laws, ineffective implementation of existing laws
are major problems
2. Many small businesses and micro enterprises are managed by people who do not have much knowledge about laws and are largely illiterate, thus, without required knowledge of existing laws, proper
implementation seems to be a distant dream
3. In lieu of getting subsidies and tax benefits through state intervention, entrepreneurs may show a well running organization as a sick organization
afspa:everything
internal security........
AFSPA:
It is an Act empowering armed forces to deal effectively in Disturbed Areas. Any area which is declared Disturbed under the disturbed areas act enables armed forces to resort to the provisions of AFSPA.
Who declares an area as disturbed?
The choice of declaring any area as disturbed vests both with state and central government.
Special powers provided to armed forces:

After an area comes under the ambit of AFSPA, any commissioned officer, warrant officer, non-commissioned officer or another person of equivalent rank can use force for a variety of reasons while
still being immune to the prosecution.
Ambit:
The act was passed on 11 September 1958 by the parliament of India to provide special legal security to the armed forces carrying out operations in the troubled areas of Arunachal Pradesh, Assam,
Meghalaya, Manipur, Mizoram, Nagaland, Tripura (seven sisters).
In 1990 the act was extended to the state of Jammu and Kashmir to confront the rising insurgency in the area.
In Manipur, despite opposition from the Central government, state government withdrew the Act in some parts in Aug, 2004.
The government can declare AFSPA in the following conditions:
When the local administration fails to deal with local issues and the police proves inefficient to cope with them.
When the scale of unrest or instability in the state is too large for the police to handle.
Legal provisions of AFSPA:
In an area declared, disturbed an army officer is legally free to carry out following operations:
Fire upon or otherwise use force, even to the causing of death, against any person who is acting in contravention of any law against assembly of five or more persons or possession of deadly
weapons.
Destroy any shelter (private or govt.) from which armed attacks are made or likely to be made or attempted to be made.
Arrest any person without warrant who has committed a cognizable offence or against whom a reasonable suspicion exists that he has committed or is about to commit a cognizable offence.
Enter and search, without warrant, any premises for purpose of arrest or to recover any person, arms, explosives.
To search and seize any vehicle suspected to be carrying an offender or any person against whom any reasonable suspicion exists that he has or is about to commit an offence.
To provide legal immunity to the army personnel found involved in any violation or ethical breach i.e., they cannot be sued or prosecuted.
Why do armed forces need AFSPA?
The forces are aware that they cannot afford to fail when called upon to safeguard the countrys integrity. Hence, they require the minimum legislation that is essential to ensure efficient utilization of
combat capability. This includes safeguards from legal harassment and empowerment of its officers to decide on employment of the minimum force that they consider essential.
The absence of such a legal statute would adversely affect organizational flexibility and the utilization of the security capacity of the state. This would render the security forces incapable of fulfilling
their assigned role.
Common people see it as Right to Kill Act. Since its inception many Human Rights organizations and civil societies have been opposing it for the following reasons:
It makes no distinction between a peaceful gathering of five or more people and a berserk mob.
The law also states that, no prosecution can be initiated against an officer without the previous sanction of the Central government.
The decision of the government to declare a particular area disturbed cannot be challenged in a court of law.
In 2005 the Jeevan Reddy Commission said that AFSPA should be repealed and the clauses that are required should be included in other Acts.
Payment banks features:

Payment banks have the following features:
1. Their main target population is the small businessmen and poor people
2. Entry capital requirement is 50 crore rupees.
3. They can invest in SLR securities, but they are safe investments, and can been easily recovered.
4. They have to maintain CRR, just like any other scheduled bank.
5. They cannot get involved in any credit risk.
6. As they face a near zero risk of default, they dont keep any emergency backup money.
---These banks, along with the existing institutions such as grameen banks can be used effectively to expand access to financial services to the poor.
---These banks can take deposits and handle remittances of small proportions.
---They can also maintain white lable ATMs, from which a person can withdraw his money from any bank account.
---Due to their high level of penetration in rural areas and ability to meet the unmet needs, such banks will provide an alternate infrastructure to the present financial system, which will further the cause of
financial inclusion.
reforms in public sector banks..

What has been done
(i) Separation of the post of Chairman and Managing Director.
(ii) Enabling provision for the appointment as MD & CEO in five major banks, so that wider choice is available. Both Public Sector and Private Sector bankers can apply. Higher salary can be given in
appropriate cases.
(iii) Revamping of present selection system which inter-alia includes structured three separate interviews, allotment of banks on merit-cum-preference basis.
(iv) Blue print for road map for reforms on the basis of deliberations carried out in GyanSangam, a two days top level retreat organised by the department.
(v) Allocation of capital purely on the basis of efficiency parameters so that banks start focusing on these.
(vi) Clear instructions from the department regarding no interference whatsoever in any matter whether related to HR issues or credit decisions or even otherwise.
What Next
(i) In order to improve the Governance of Public Sector Banks, the Government intends to set up an autonomous Bank Board Bureau with professionals as its members. It would be responsible for
search and selection of heads of PSBs, as also for Non-Official Directors on the Boards of Banks. This would be an interim step towards moving in the direction of having a Bank Investment Company.
(ii) Guidelines relating to appointment of non-official directors is being revisited to ensure that bank boards get people with relevant expertise. Anybody eligible would be able to apply through a website
which will soon be available in the public domain.
(iii) Governments role in relation to public sector banks is that of promoter. As a promoter, the banks have been entering into anMoU for achieving certain objectives known as Statement of Intent. The
whole system of Statement of Intent is being revised with provision for higher cash incentives.
(iv) Government wants to encourage Bank Boards to restructure their business strategy and also suggest way forward for their consolidation and merger with other banks if it is win-win for both.
railway budget 2015-16

New proposals in the Railway Budget:
Kayakalp: It is an innovation council proposed to be setup. It will be set up for the purpose of business re-engineering and introducing a spirit of innovation in Railways.
Malaviya Chair for Railway Technology at IIT (BHU), Varanasi. This Chair will help in development of new materials to be used in all assets of Railways.
Financing Cell in the Railway Board: It will seek advices from experts in the railways field and helps in mobilising the resources to meet the budgetary requirements.
Foreign Rail Technology Cooperation Scheme: The Scheme aims to achieve the higher quality service for the nation. This is being launched because Technology intensive and complex projects like speed
raising and station redevelopment require lot of handholding by a specialized agency in terms of preparatory work, exploring technology options and managing bid processes.
Operation Five Minutes: It ensures Speedy Purchase of Tickets for Unreserved Class Passengers.
Gandhi Circuit: It has been decided to promote tourism in the country through Gandhi Circuit. Indian Railways will join this effort through Incredible Rail for Incredible India. The Gandhi circuit will be set up
by the Indian Railways Catering and Tourism Corporation (IRCTC) to mark the 100 years of the return of Mahatma Gandhi from South Africa to India.
Kisan Yatra: It is a special travel scheme for farmers to visit farming and marketing information centres.
Quick facts from the Railway Budget:
The size of the Plan Budget has gone up by 52% from Rs. 65,798 crore in 2014- 15 to Rs. 1,00,011 crore in 2015-16.
Support from the Central Government constitutes 41.6% of the total Plan Budget and Internal generation 17.8 %.
Nirbhaya Fund to be used for augmenting security of women passengers.
For raising long-term debt, the Railways could tap pension and insurance funds and set up a holding company or a joint venture with existing non-banking financial companies of public sector
enterprises such as the Indian Railway Finance Corporation.
Debt could be raised from both domestic and foreign sources, including multilateral and bilateral financial institutions like the World Bank and the Asian Development Bank.
Earnings from passengers have risen in the past year on the back of a 14 per cent increase in fares announced in June 2014.
reforms as suggested by vijay kelkar committee on oil import bill

Topic: Effects of liberalization on the economy, changes in industrial policy and their effects on industrial growth.
8) It is expected that if recommendation of a key report on oil sector reforms by a panel under former Finance Secretary Vijay Kelkar, are implemented, these could bring down the countrys annual $150-
billion oil import bill by at least $40 billion. Examine how. (200 Words)
Problem Analysis ::
1) Exploration Issue ::: India is probably having gud natural gas/ shale gas reserves. Their exploration is an issue. as exploration involves heavy investments and is risky operation. Govt. PSUs ONGC/GAIL
and pvt parties RIL are involved in exploration work under govt's NELP (new exploration licensing policy). For PSUs blocks are directly awarded and they are controlling 85% of known reserves. However for
pvt parties bidding route is adopted in which Production sharing contract (PSC) regime is in work. Allegation of cost inflation, Gold plating, hoarding of gas by CAG and Rangrajan committe's suggestion to
shift to RSC model are in discussion these days. RSC model will be highly costly to pvt players.
So, Kelkar penal has suggested to continue with PSC regime.
2) Giving motivation to pvt player :: Gas exploration and production from it is highly cost intensive and risky issue. so kelkar panel has suggested some steps to ensure more business frndly policy
a) Link Gas prices to market -- so inflation will go up; and pvt party will make windfall gains in the name of business frndly policy.
b) Allow and motivate pvt players to explore shale gas, coal gasification.
c) Swift decision making by CCE for poilicy making etc. so cost overruns can be reduced.
d) Implement GST
e) Exploration and production licensce from well shd be given for lifetime of well. so pvt. party will not hesitate from making high investments.
3) Independent and fair regulator:: Very imp.; make DGH strong and quasi judicial upstream regulator. for downstream make PNGRB.
Coclusion :: Recommendations are gud as they will lead to indeginsation of enegy production and reduce our import bill, However PSUs shd be given priority when there z uncertainty with pvt players.
ONGC/GAIL are also enough competent at par pvt players.
production sharing contract and a revenue sharing contract

What is the difference between a production sharing contract and a revenue sharing
contract in public private partnerships?
Oil and Gas exploration requires substantial investment and the chances of not hitting the reserves are always there.
Government/PSUs cannot always put in such investments and sometimes also lack the technology and expertise to tap into the reserves. Therefore,
Oil & Gas exploration companies like BP, Shell step in.
There are two methods by which Oil and gas exploration companies (OGECs) can recover their investments and the government can also get their due share (natural monopoly).
Production Sharing
OGECs will develop the oil and gas fields.

They will first recover their capital and operating expenditure before sharing the profits with the government.
OGEC's stand This is a good way for them to recover their investment because they take significant risks while drilling for exploration.
Government's stand This is not good because the OGECs can tamper with production of oil and gas and then hoard the gas in anticipation of higher rates in the future.
This is what the Reliance KGD6 saga is all about with government saying that Reliance/BP are deliberately hoarding gas to sell it at higher prices on a future date. But Reliance/BP maintains that
production has suffered due to unforeseeable complexities in the operation of the project and additional investment is required to restart the production from the field.
Therefore, the Rangarajan Committee has recommended shift to Revenue Sharing in the new oil and gas exploration policy.
Revenue Sharing
OGECs will develop the oil and gas fields.

But the revenue will be shared between the government and OGECs from the first batch of production of the oil and gas itself.
OGEC's stand This is not good for oil and gas exploration sector as the companies will not feel confident about investing huge capital with significant costs under circumstances in which their
recovery is not guaranteed.
It may be possible that the oil and gas production might suffer in the unforeseeable future rendering the investment recovery in danger.
Government's stand This is good because it will allow companies the flexibility to manage operations without the undue scrutiny of the CAG and public at large. Efficiency can be achieved in the
absence of constant controversy that always surrounds the production sharing contracts. It ensures that as the contractor earns more, the Government gets progressively higher revenue. It will also
safeguard the Governments interest in case of a windfall arising from a price surge or a surprise geological find.
Impacts
1. Oil and gas industry provides input materials for a lot of other industries like refined petroleum products, fertilizer manufacturing, chemical industries, electricity generation. Uncertainty in the supply of
oil and gas can have detrimental cascading effect on the industrial and agricultural sector of an economy.
[Ill add the facts from the newspaper articles here]
2. The core issue here is about who owns the resources the citizen of the country or the companies who develop them for utilization. Governments seldom have the funds, resources
and technologies to utilize the natural resources optimally. Private enterprises step in with these critical inputs. But in any case, every private enterprise will want to take calculated risks, safeguard its
investment and generate profits.
PPP is a good approach but it needs a revitalized governance structure to succeed. CAG does not have the expertise to evaluate diverse PPP projects. Also, its scope to audit these is still under continuous
interpretation by the judiciary (Can CAG audit power distributors BSES Yamuna, BSES Rajdhani, Tata power issue in Delhi HC).
Two key questions that need to be kept in mind are-

1. Are unutilized resources beneficial to the country and its citizens?
2. To what degree can we trust private enterprises to deliver public goods?
Solutions to these are still under consideration and everyone - Executive, Legislature, Judiciary, private enterprises, CAG, experts are seized of the matter. What is really important here is public
opinion (Public beware Neera Radia-Veer Sanghvi tapes). Corporate firms have media, best legal experts & money. Government only has the implicit trust of the public.
This is one epic question that will shape the future of mankind as it unravels with multiple dimensions to it ethical, social, administrative, political. It will question everything the supremacy of state,
independence of media, efficiency of organizations, technological innovations, copyright mechanisms, role of powerful multinationals in weak countries, business ethics and a lot more.
special entertainment zones

Topic: population and associated issues, poverty and developmental issues, urbanization, their problems and their remedies.
1) Recently it was proposed to create Special Entertainment Zones (SEZ) in Mumbai where designated night zones (open 24 x 7) will be created and allow people to entertain themselves securely. Do you
find this proposal socially, culturally and economically good for cities such as Mumbai, Kolkatta, Delhi and other metros? Can this idea be extended to tier-2 cities? Critically comment. (200 Words)
The idea of having Special Entertainment Zones with designated night zones has been in principle accepted by various stakeholders. It should be located mostly in malls as they have private security and lot
of parking spaces. Various implications exist:
A. Economic:
1. Higher footfall and consumption in malls and eateries.
2. Boost for night taxi drivers.
3. Attraction for tourists.
4. Generate employment and income for hoteliers.
5. Government can rope in more taxes.
B. SOCIAL and CULTURAL

1. People from different backgrounds will get together within safe places so more interactions.
2. Noise pollution, street crowd and rave parties will be deterred.
3. But issues of appropriate security for women, drink driving and molestations need to be addressed.
4. Entry of teenagers, underage drinking and possibility of drug usages also need to be addressed.
This idea cant be extended to tier-2 cities because of economic unviability, orthodox society, lesser security, small in size and lack of target audience with deep pockets. But, with time, they can be extended
to smaller cities.
shanta kumar committee+/-

As an initial step to secure the four pillars of food security viz. availability, affordability, accessebility and stability the FCI was setup in 1964 . However the shortfalls of FCI in its 3 major objectives of
procurement,storage and distribution, lead to formation of the shanta kumar committee for FCI restructuring.
Some of the progressive recommendations include:

1. Procurement Payment reforms: Popularise NWRs
2. Buffer stock reforms: Whenever FCI has grains above buffer norms, it should automatically sell excess stock in open market Pro-Active Liquidation Policy.
3. Storage reforms: End to End computerization and Online tracking of entire system from procurement to retail distribution.
4. Transport reforms : Improved night security at rail-points, because >85% of PDS Grain is transported through railways and maximum siphoning off occurs here. Use of inland waterways where possible
Though some of its recommendations appear progressive,most of its reforms have been debated and criticised on various grounds:
Survey : Committee report says only 6% farmers benefited from MSP procurement regime and nearly 50% of the foodgrains are siphoned off from PDS system
But experts dispute the NSSO-survey methodology used in deriving these numbers.
Cutting down NFSA : Many poor families will be deprived of their basic right to food.
recommends FCI to hire contractual staff, close regional offices and give VRS to employees. Trade union leaders are in opposition to this.
Privatisation : though many farmers have not benefited from public procurement, but FCI has not opened branches outside selected regions.
Outsourcing procurement to some states :it recommends not to do open ended procurement from all states, above buffer stock limits.
This will catalyze distress sells and farmer suicides.
Direct cash transfer has its own shortfalls
peter pan syndrome..

Peter Pan Syndrome economic theory:
The Peter Pan syndrome can be seen in both developed and developing economies.
According to this theory, firms remain small in order to avoid reaching thresholds that, if crossed, could expose them to a different set of regulations.
Heavily regulated economies tend to have smaller firms.
Small firms may lead to the growth of informal or illegal firms that dont contribute taxes.
black money and HOW TO SOLVE IT..

In your opinion, why does black money thrive in Indian economy? Explain the nature of black money that is circulated in India and examine if encouraging more and more cashless transactions will be
effective in curbing its growth and circulation. (200 Words)
Black money has been institutionalized into India's circular flow of money. This has posed a challenge not only to IT department but to entire economic stability of our country. Some of the prime reason for
such thrive is as follows.
1. Wide spread nexus between LALA, DADA, NETA and BABU. (N.Victor)
2. Incapacity of enforcement agencies like ED to bring the culprits to books of law.
3. Popularization of methods like HAWALA etc which leaves no trace and facilitates easy transfer of money world wide.
4. Increased leverage of technology .
5. Legal and extra legal loopholes. Eg. limit on candidate spending in electioneering is prescribed but no limit on party's expenditure.
6. Existence of safe havens like Swiss bank, Lichenistan bank etc. which makes parking of illegally earned money easy.
7. Inability of Law and order agencies to curbsource of black money like drug trafficking, female trafficking, gold smuggling etc.
Cashless transaction is indeed a welcome step as such transactions are always under scrutiny of banking system of the country. Also, it may help the other enforcement agencies to curb important linkages
in generation of black money. However, to succeed it requires a robust security architecture immune to hacking,phishing and other types of economic frauds, financially aware users and adequate banking
infrastructure throughout India..
SOLUTIONS-
--The government came up with acts like income tax and wealth tax act after independence to stop the flow/generation of black money. But still could not stop the black money generation.
--Voluntary Disclosure of Income (VDI) act give an opportunity to the income tax/ wealth tax defaulters to disclose their undisclosed income at the prevailing tax rates.Laws relating to economic offences will
not be applicable for those defaulters. This act brought a lot of revenue to indian finance ministry.
--In 1998 govt came up with Banami transaction prohibition act which aimed to stop purchases in name of other person.
--Foreign Exchange Management Act (FEMA) 2002 , brought investigation under FEMA of specific cases related to controvertial foreign transactions, unauthorised holdings of funds outside india by indian
resident.
--Prevention of Money Laundering Act (2002)- investigation, seizure and attachment of laundered properties. Punishment of those who are guilty of laundering black money.
--Double Tax Avoidance Agreement(DTAA)with tax heaven countries and cooperation to share names of the account holders.
--India has ratified the United Nations Convention against Transnational Organised
Crime and its three protocols and the United Nations Convention against Corruption
--Whistle blower act to give protection to the whistle blower.
GOVT has also set up various units such as the CBDT(cross-border transactions and transfer pricing), ED(enforces FERA/FEMA), FIU(suspect transactions) etc. The Centre had also appointed the MC Joshi
Committee(2012) on BM to study the generation and curbing of BM.
consumer protection act: recent changes

Topic: Government policies and interventions for development in various sectors and issues arising out of their design and implementation;
6) To what extent has the Consumer protection act succeeded in achieving its intended objective ? Critically analyze the recently proposed amendments to strengthen the act. (200 Words)
the consumer protection act came into force in 1986 and had achieved mixed results which can be summeed as follows-
1. made people aware about the quality control measures.
2. the redressal mechanism was very helpful as was helpful in taking matters of inefficiency in public sector, electricity, water distribution.
3. increased awareness and literacy about consumer rights.
4. grahak seva kendras assisted with many purposes.
but
5. there has been low penetration in rural areas.

6. the redressel mechanism takes a lot of time.
7. adjournments make it difficult further.
the recent proposed amendments had come in light to strengthen the act. the amendment address following issues-
1.advertisements, unfair contracts, e commerce have been clearly defined in accordance with the modern era.
2. there are provisions for online complains making it easier and faster to register complain.
3. the pecuniary jurisdiction of district forum has been increased from 20 lakhs to 50 lakhs.
4. there is concept of appointment of mediator to solve the problem.
5. amendment also bar advocate to be used if the case include matter below 2 lakh.
but there are certain subjects on which the amendment has not been clear and they still remain a problem-
1. delays in the issue of public orders.
2. litigants forced to give their complaints in specific formats, submit loads of papers.
3. nothing for cutting down the adjournments and prolonged arguments.

4. no proposal for funding of consumer law implementation which will help to increase efficiency.
consumer protection law is very important law, merely sorting out some problems and implementation with perfect will will make it better.
ppp model interest decline

Twelfth five year plan envisaged that nearly half of infrastructure projects in India would be funded in PPP mode. However recent evidence suggests falling interests of private players in many sectors.
Comment. Also Suggest alternative mechanisms to fund infrastructure till the interest in PPP is revived. (200 Words)
The PPP projects for infrastructural boost has not showed promising results in 12th FYP. This is because of reasons pertaining to global,domestic and local factors. Some of them discussed are viz.
1. Global Slow down after sub prime crisis 2008.

2. Delay in environmental and other clearances.
3. Government reluctance to modify the contracts
4. Non compliance of dead lines by private sectors.
5. Policy paralysis,allegation of corruptions, increased litigations in courts.
6. Private firms unable to draw capital from overburdened banks, and capital market thus making them devoid of funding.
This has created a reluctance in investors to participate in PPP projects. In this scenario, government has taken step to shift from BOT to EPC model where the large part of project cost is taken by
government. Besides this, important source of funding can be
1.Municipal bonds.
2. Multilateral institutions like New development bank, Asia Infrastructure bank, World bank, grants from foreign source like JAPAN.
3.FDI
4.Invit, REITs
5.Tax free bonds issued by PSUs.
Timely funding and clearances by government can help India plug its infrastructural gap which is a pre requisite for India's inclusive economic development and good governance.
sebi: functions and problems.

As a quasi-judicial body how has the Securities and Exchange Board of India (Sebi) performed in fulfilling its mandate? Critically evaluate. (200 Words)
SEBI has played vital role in indian security market following ways--
Meeting ground of three

--------------------
It has provided a secure platform to the issuer; investor and brokers.
Regulation of mal practices

--------------------
SEBI has effectively controlled the price rigging that is manipulation of price for profit motive; insider trading that is leaking secret information by its members to bring extraordinary change in share price.
Effective guidelines
----------------
The guidelines issued by SEBI to protect the customers that specifies the rules of investing company; brokers are very effective at current scenario.
New initiatives
-------------
The allowance for issuing money in primary market through sebi and internet trading system for brokers are highly effevtive now.
Development initiatives
-------------------
It has taken programmes to educate investors in stock business and to educate intermediaries in case of business transactions.
Regulatory rule
---------------
SEBI has highly affirmed the faith of customers by effectively investigating many fraud cases.
Cause of concern.
----------------
In recent perspectives; SEBI is said to be involved in some scams. This leads to conflict between SEBI as quasi judicial body and investigative agency CBI.
Solution
---------
Only with full proof investigation should be initiatiated against any member of SEBI. Otherwise; it will derogate the standard and independence of a quasi judicial body. If any accusation is proved;
government soon take immediate corrective measures to restore faith on the body. The report of FSLRC is also noteworthy to discuss here. Anyway; the role of SEBI is quite effective in current security
market in india.
DBT summary
What are the merits and demerits of direct benefits transfer (DBT) scheme in the Indian context? Enumerate. (200 Words)
Answer: Direct Benefit Transfer is a mechanism to transfer the subsidy amount directly to the bank account of beneficiaries. Main agendas for DBT is to prevent and address following
1. Leakages,
2. Delays.
3. Reducing structural expenses in distributing the subsidies in hand.
4. Encouraging everyone to have bank account to get engaged in financial activities.
Right now it is applied to only 4 areas that too in selected districts:
1. LPG subsidies.
2. Jnani Suraksha Yojana
3. Old age pension
4. Scholarships
Mertis of DBT:
1. Leakage, Delays are prevented.
2. Reduces Corruptions and black money issue.
3. Reduces economical inequalities in rural areas as everyone gets theire share rightfully.
4. Reducing the government expense on PDS, Cooperative society, bureaucracy to distribute scholarships etc.
5. Reduces time,energy and money of people to get their money/commodity.
5. Encourage free and fair market structure. Earlier subsidised grains entering market through backdoor used to distort the price in market.
6. More circulation of money in economy which will lead to atleast 0.5% growth in GDP.
7. Govt can better focus on other issues and not engaging in distribution.
8. Transportation charge for FCI and NABARD subsidies for warehouses will be reduced.
9. Slowly importance of MSP will reduce while price a farmer would fetch will increase which is win-win situation for farmers, Also non-food crops will get importance which is issue right now in India.
10. Financial institutions will pay attention in rural area once people will have cash in their hand.
11. Health facility will get better with private hospital giving facilities once people will have money to get treatment.
Demerits of DBT are less but they are:
1. Money in the hand of poor may get spent in something other than what is needed, A scholarship needed to be spent in education only, but how govt can ensure that, once she has sent it to account.
2. Most accounts holder are males and has accessiblities to banks, hence it will lead to usage by them only. Females may not the money share if they are the real beneficiaries.
3. With lesser banks in rural and most part of India, it will be another overhead for people to get their amoung withdrawal.
4. Delay in transfer may create more turbulency as many will flock to banks to check the amount.
While the merits and demerits are mixture of hopes and assumptions, but DBT is in good spirit and will definetly benefit all stakeholders viz govt, beneficiaries and private institutions. It will ensure right to
economical equality by ensuring every beneficiary will get their share on time.
municipal bonds..
What are municipal bonds? Recently government initiated a process to identify few cities to issue such bonds. Examine why and how these bonds will be issued.
Municipal Bonds, also known as Munis, are tax saving investments offered by the municipal bodies to raise funds from the community for local area development. In view of the plan towards Smart Cities,
the Government of India has proposed to use Munis in a few select cities in view of the following benefits it yields:
1. They help in saving tax for the individual, hence increased participation
2. Since the money invested is being used in the development of the local area, the direct impact can be felt by the investors and hence greater accountability
3. It balances authority and responsibility at the community level, thus making the process of development more effective and inclusive
4. Viable alternative source of funding, given the central funds are already under pressure with Make in India
Municipal Bonds are being planned to be issued in the following manner:
1. Select five to six Tier II and Tier III cities, including smaller capitals and satellite owns, to issue munis in
2. Issue a fixed number of bonds to the people of the given municipality (75% of the population), for a fixed period (3 years) and at a fixed rate of interest (8%). The people would be decided on first come
first serve basis.
3. The issuing authority must fund a minimum of 20% of the Project Cost from the munis, and incase is unable to reach minimum subscripion, must refund to the applicants within 12 days
4. Depending on the success of Munis in the first phase, the option will be extend to other towns as well. Some of the constraints that Munis might face in the first phase are:
a. Better alternative available for people with higher rate on interest
b. Absentia of Municipal Bodies causing lack of trust in them by people
c. Techno-managerial capacity of the municipal bodies
If Municipal Bonds are able to perform as expected, they will display an extraordinary route of development
investment in India at the community level. The democracy would truly be functioning BY the people and FOR the people.
aviation sector problem:who responsible?

The mess that we witness today in the Indian aviation sector is thus not only a consequence of flawed government policies but also constant meddling and complicit silence of some private Indian carriers.
Critically examine.
With the rising incomes and inter-linkages in the economy, the aviation sector enjoys a great potential in India. However, it has not been able to achieve the potential and on the contrary has been facing
severely complex issues. Although the critics have often pointed out to the Government policies as reasons for this state, the private player have an equal role to play.
Role of the Government:
1. High tax on the fuel, added with variability in the surcharge from state to state
2. Discouragement to partnerships between the Indian and Foreign players
3. 5/20 policy, barring all those who did not have a minimum of 5 years of experience and a fleet of 20 airlines to be flying in the international skies. This not only closed a major way for the companies to
balance their low domestic revenues but also discouraged new entrants in the sector, thereby monopolizing it.
4. Lack of policy focus on indigenous innovations in the aviation sector, suited for the domestic consumer
Role of the Carrier

1. To gather more market share, each player has successively been reducing their prices which has finally led to operational losses and need for a bail out. Instead, the competition between players must
also have focused on improving quality of service and consistency in flights to gather a larger market share
2. Lobbying by a few influential players to get preferential access to profitable routes, leaving the nonviable one for the state players. The silence of the smaller private players on this has further
aggravated the situation
3. The domestic private airlines have also maintained silence on preferential allocation of viable routes to foreign airlines, as long as they were able to maintain monopoly on their respective routes. This
limited and short term perspective has also added to the problem
4. Leveraging the lack of policy clarity to their advantage than seeking clear regulations for the sector
In light of the above, it is essential that both the state and the private players take shared responsibility to achieve the potential of the aviation sector in the country. Foreign partnerships, technology
innovations, government incentives, minimal cordial interference by the state and service war than fare war are some of the steps than can help revive this sector in a balanced way, without incurring a
financial burden on the Government, and a modernization tradeoff for the individual.
larr:old and new

9) How is the new ordinance on land acquisition legislation the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act (LARR) is different from its earlier
version? Critically examine. (200 Words)
Answer: Land is a finite resource and first thing for starting any project. Complication in acquiring land caused enormous delays hence Govt came up with renewed bill LARR 2013 which was introduced last
year as its earlier version has failed to achieve any concrete success because of:
1. Longer delay in acquisitions because of Social Assessment Committee formalities.
2. As per the CII, because of the news of doubling and quadrupling of price in urban and rural areas respectively. Already the price has gone up for land. Hence in future, any land acquisition will become
unviable for public project and uncompetitive for private projects.
3. The clause of obtaining consent of 80 percent of affected families for private sector and 70 percent of affected families for Public Private Partnership (PPP) projects would make the process of obtaining
consent a very long drawn out process.
4. The Bill talks of an urgency clause which means that government can acquire a land it wants by ignoring all the pre-set conditions.
5. The Resettlement & Rehabilitation clause gives no guarantee to jobs.
6. The Bill compensates different categories of affected families at par, not aligned to their losses. So there could be cases where compensation calculated is lower than the market rate.
7. State is the ultimate decision maker when it comes to acquiring farm land.
8. The Bill does not guarantee return of unused land if land owner repays compensation to the state. It only suggests that it should be returned which creates confusion.
But the newer bill which comes with Right to Fair Compensation and Transparency clause has following
1. Removal of Social Impact Assessment from the LARR under certain special condition
2. Enlarged the scope of cases when central govt can take land without 80% consent clause as compared to LARR by including 13 more categories like Metro project, Railway, Energy, National Highway etc.
3. New Ordinance is pro-Land-Acquirer, by reducing the time for acquisition by several years, and thereby reducing the opportunity cost, is a huge benefit. When this is topped up with the reduction or
removal of the cash cost of social impact assessments and referenda, it becomes a windfall for the acquirers too.
Newer Ordinance is in the right spirit toward faster land acquisitions but fails to address the problem of fast rising land prices. Soon we will hit the saturation price which will make acquisition near
impossible.

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Tax reforms in budget

Relief to small tax payers

reforms in civil aviation

Topic: Infrastructure airports; Indian economy growth and development

The recent reforms proposed by the union governement are--

Awareness in Space; Achievements of Indians in S&T

ANS DISCUSS NISAR Project NASA-ISRO SYNTHETIC APERTURE

Ipr problems in india

Absence of specific ip rights for life sciences sector

High speed railways

1. Reduced journey times impacting individuals and businesses.

Commission on data privacy

FATF recommendations on money laundering

Steps taken by India are

Maize: the grown crop

Following reasons are responsible for this:

Reforms in electricity sector.

Importance of SEZ policy

Reasons for the failure of SEZ policy

bad issues related to e commerce.

Although e commerce presents goldmine of opportunity it can also prove to be landmine.

some issues such as

-key question-what is broken that ifc is trying to fix?

$ constraints holding back investment-

$ change in base year-

indicators are fluid.

corporate sector covered comprehensively

check this too-

$ 7th pay commission-

$ ways of restricting online info by govt-

$ mission indradhanush for psbs-

child marriage: nirantar report..

public debt management agency

Topic: Indian Economy planning, growth

recent measures to increase tourism.

(1) Launch of Tourist e-Visa for citizens of 44 countries.

(5) Development and promotion Niche Tourism products.

recent steps to improve thermal power generation.

road transport and safety bill

New proposed Agencies and systems:

radicalisation and extremism:nice points..

Topic: Linkages between development and spread of extremism.

organ transplant- problems and steps taken.

Economic Survey 2014-15 Highlights

Economic Survey 2014-15 Highlights

(Copied from PIB)

Economic Outlook, Prospects and Policy Challenges

Macroeconomic fundamentals in 2014-15 have dramatically improved. Highlights are:

Subsidies and the JAM Number Trinity Solution

The Banking Challenge

Putting Public Investment on Track the Rail Route to Higher Growth.

Skill India to Complement Make in India

The Fourteenth Finance Commission

basics of make in india

(i) New Processes: `Make in India` recognizes `ease of doing business`

a. Allotment of Unique Labour Identification Number (UN) to units;

b. Filing of single self-certified online return for 16 labour laws;

c. Random computerized inspections based on objective criteria;

d. Reports to be uploaded by inspectors within 72 hours of inspection;

14th finance commission..

Other important recommendations:

further details (just read if time permits)

good subsidy and bad subsidy