Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.

 GS 3 (General Studies 3)
Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.

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1)Indian Economy:
GDP of india= 2.72 Trillion USD
Target= 5 Trillion 2025
Inflation rate=CPI=  4% +-2
Forex reserve = 15% of GDP.

BOP:
>Current Account defeciet = 0.2%
Note: If Current Account Deficiet is more then 2.5%....Its matter of Tension
Current Account Surplus=invisibles (Transfer+ Income + Service)
Current Account Deficeit=Visibles(Merchandise)
>Twin Deficiet= Fislcal+ Current Account

>Capital Account Surplus=Investment + Borrowing.

Convertiblity:
=Still not fully convertible(Capital Account)…….FDI restricted in various sectors…….Transfer of money for study , tourism etc by Indian…even  ECB  is still regulated to maintain Surplus in Capital Account.
=Tarapore Committee Report, made by RBI……To recommend How and When fully convertiblity is to be achieved.
Reccomendation:

Gross NPA Ratio=19% ↑
Twin Balance sheet problem=(NPA in Banks) +  (Indepted corporate sector).


2) Planning :
>Planning means state controll as it sets priority….controll can be small or large.
>When economy works on command of State =Command Economy.
>Is command economy Good?
=USSR and China used to have command economy………….USSR removed…….China reformed.
=At present  North Korea has which is not a succesfull economy.
=Command economy lacks innovation+ efficiency

History:
Before Independence:

1)M Visvesvarya (1934):
=Engineer+ Designed “Krishna Raja Sagar Dam”
=1934 Published a suggestion …Inida needs 10 year plan….To double the income of country within 10 year.
=in Book “Planned Economy for India” set the goal to eradicate poverty through growth.

2) National Planning Committee (1938).:
=Established under the chairmanship of Jawahar lal Nehru by INC.
=Heavy industry and Redustribution of Land planned.

3)People’s Plam(1940s):
=By MN Roy(Member of Indian Federation of Labours)
=on Employment and Wages

4)Bombay Plan(1944):
=Started by Leading businessman (GD Birla, JRD TATA, Sir Purushottam Das Thakur)
=put forth a plan, Bombay Plan------Gov should protect domestic company from foreign…boosting textile industry….focus on heavy industry etc.

5)Gandhian Plan(1944):
=by SN Aarwall……….follower of Gandhi.
=Decentralisation of economy.
=focused Agri+ Cottage industry +Employment.


Planning Commission Vs NITI
1. Planning Commission did not have state/UT representation. 
2. Planning Commission was the operational arm of the NDC which is a political institution. NITI Aayog has the Governing Council that approximates to the NDC. That is,  NITI is PC and NDC in one body.
 3. Planning Commission was directed by the NDC to flesh out the five-year plans. The  NITI Aayog, in contrast, has no responsibility for socio-economic planning as it has been  abolished. 
4. NITI Aayog has the provision of regional councils that the Planning Commission did  not have. 
5. Planning Commission had more members and they were all full-time members. 
6. Planning Commission had allocative functions— recommending plan financial transfers, centrally sponsored schemes, etc. NITI Aayog does not have such a function.

Acievement of NITI Ayog:
>Boost  cooperative Fedaralism(Down to up approach) + Compititive env.
>15 year Vision Map === 7 Year Strategy ===3 Year Action Agenda
>AMRUT
>Atal  Innovation Mission
>Medical Education Reform
>Agri Reform [Model Land leasing Law, reform of APMC act,  Agri market and farmer friendly index for ranking states.)
>Index= State performance in Education + Health + Water management.
>Su group of Chief minister on SBM/ Centrally sponsered scheme rationalisation/ Skill India.
>Nodal agency to bring 17 SDG to  bring into action.

Crticism:
=Not statutory= toothless tiger…………political ==make it independent by appointing permanent members.

3)Issues Related to Planning

[]CA= Skill dev India+ Atal innovation + Swach bharat etc

>Types of Resources – Financial, Human, Natural etc.

>Need for Resource Mobilisation

>Role of Savings & Investment

>Government Resources – Tax & Non-Tax ( or Fiscal & Monetary Policy)

>Banking Sector & NBFCs

>Capital Market

>External Sources – FDI, ODA etc.

>Public Borrowing & Management of Public Debt

>Challenges in Mobilising Resources for Development

a)Labour intensive or Capital intensive?
b)Extant of Globalisation.
c)Availblity of reliable data.
d)Change in Gov.
e)NITI Ayog’s Criticism
f)Inclusive growth.
g)Human Development needs to be taken.
h)Mobilsation of Resource

Mobilisation of Resource ↑

è Household= largest contributor of savings= 60% of Total Saving.
    =Hpousehold=Individual + unregistered MSME.
    =Household saving= nealy 75% is in Real Estate.
èSavings indicates how much likely a person is to invest…..Saving  ↑= investment ↑.

How to increase Household Savings?
=Financila inclusion + Trust in Financial instrument (Stable economy env)
=Shocks like GST dismantled unregistred MSME….decreasing Household Saving.
=Financial Literacy.

Institutions for Resource mobilisation:

1)NDC(National Development Council)
=PM heads + CM members
=works on aligning State gov+ Union gov +NITI Ayog on same line.
=was active in Planning commission……….after NITI Aayog irrelevant due to “Governing body”.

2)Finance Commission:
=Horizontal and Vertical devolution.
=State finance commission for local body.

Growth and Development:

Meaning of Development & Growth
=Growth=Quantitative; Development= Qualitative.

Determinants of Growth & Development
=Qualitative, HDI (Human Development Index), gender-related index (GDI), Human Poverty index (HPI), infant mortality,Multidimensional  poverty index,  literacy rate etc.

Importance & Limitations of Economic Growth
=high inequality-----inefficient trickle down effect.

Jobless Growth
=less employment compared to Economic growth.
=or less quality employment like increase in informal workers led growth.
=93%  of the workforce are in informal sector.

Pro-Poor Growth
=Kerla tourism model(Eco tourism).

Balanced & Unbalanced Growth
=Inequality ↓

Dimensions of Development
=Social Development
=Economic Development
=Political Development
=Environmental Development.

Measurement & Indicators of Development
=Multidimensional Poeverty Index.
=Global Gender Gap
=Literacy rate
=IMR
=MMR
=Fertility rate
=Life expectancy

Approaches to Development:

=Market-Based Approach
=Role of State and Planned Approach
=Mixed Economy Approach

 

Employment:

>Garib Kalyan Rojgar Yojna

>MGNREGA

>Gig economy.

>Rojgar Setu

>National Migration Information System

employment --- https://www.civilsdaily.com/story/labour-jobs-and-employment/