शनिवार, 25 अगस्त 2012

Indian Economy, Environment

Archive for Indian Economy

TamilNadu Industries: Second biggest polluter of rivers

Tamil Nadu has got another feather in its cap on polluting the natural environment.
After Uttar Pradesh, Tamil Nadu is the second biggest polluter of rivers. Thanks to the so called ‘industrial development’ happening here.
There are 1,395 industries in India polluting the rivers. Uttar Pradesh industries take the lead role by polluting it at 431 places (30%), followed by 366 industries (26.23 %) in Tamil Nadu.
This information was submitted to the Rajya Sabha by Jairam Ramesh, Minister of Environment & Forests on November 30, 2010 in a written statement.
Source: Dinamani, December 1, 2010, P 8.

Economic Carnival vs Economic Carnage

Economic Carnival vs Economic Carnage

S.Jenifer Arulmozhi
How does the world identify India ??? GANDHI , MARUTHI & POVERTY…………
The economic carnival in India is in its peak, as people in India, especially the middle class are forming the pillars of the vibrant Indian economy. The standard of living is on the rise and India is coming out from being called a third world country to a developing country.
Society of Indian Automobile Manufacturers (SIAM) has said that passenger car sales breached the 2 lakh sales mark in July, the highest sale in single month led by new launches and moderate finance cost from branded companies like Tata Nano, Ford Figo, Nissan Micra, Maruti wagonR and Volkswagen Polo.
On the eve of launching the Chevrolet Tavera with BS4 version, the MD & and president of General Motors India; Mr. Karl Slym said “there is 96 % localization of products as of now which is likely to reach a full 100% very soon”…INDIAN EXPRESS, 10TH AUGUST.
Our India’s “Chintamani” has earned a lot of money in 2010, but has also earned a lot of “chintas (worries)” too!!!!
Economical carnage is growing on the other side of our country. Unfortunately, India’s not China:which is based on low cost manufacturing. India’s success is service driven, relying heavily on technical and language skills. What then of the barely literature rural masses? The baseline measure, how many calories a day the poor consume, tells a terrible tale. Rural India and the urban poor are actually getting hungrier.
On July 20th, Union cabinet secretary, K.M.Chandrashekar said that pulses would continue to be a head ache for policymakers and home-makers. India’s annul food inflation rose to 12.81% within a week.
There are 421 million poor people in 8 Indian states alone-Bihar, Chattisgarh, U.P, M.P, West Bengal, Orissa, Jharkhand and Rajasthan….while there are 410 million in 26 poorest African countries combined.
India which ranks a lowly 127th on the global human development index is 8th in terms of billionaires!!
Booker prize winning author turned activists, Arundhati Roy; writes “the past 5 years have seen the most violent increase in the urban-rural income inequalities since independence”.
Unless we address our social imbalances it would all blow up in our faces……….!
Source: The Economic Times

Indian Media and Farmers suicide

200,000
FARMER SUICIDES
Farmer suicide in India is something that the people have been unaware, or rather ignorant about. This is probably because the actual number of deaths by farmers committing suicide is not released by the media. Can anyone take a wild guess on the number of farmers committing suicide each year in India? In the past 18 years, ever since the Economic Liberalization was unleashed in India, more than 200000 farmers have committed suicides. Shocking? Isn’t it?!
Why is it then, that the media not giving importance to such an important issue? 200000 is not a small figure. It could very well be the population of a small town or a small city in our country. There was an article by a freelance journalist, Shubhranshu Choudhary,in a journal called Vidura, published by the Press Institute of India, based on this very topic. The article focuses on the very state where the rates of farmer suicides are the highest in the country and have maintained this position for many years now. The irony about this is that even the residents of this state are unaware of the fact that Chhattisgarh stands No. 1 in the list of places with the highest number of farmers committing suicide.
We all remember the 26/ 11 attack on The Taj, in Mumbai. Around 175 people died. And I remember quite well that this issue was all across the papers, the T.V, Radio, Internet for months together. People couldn’t stop talking about how the whole incident went down and people even gave their opinions on the whole issue everywhere they could. Even the Government was on news almost everyday updating the public on what action was being taken for the attack that had claimed the lives of approximately 175 people (including the attackers).
If the deaths of 175 people matters to us this much, why is it that there is not much change in the death rates of farmer suicides in the past decade or so? Why is the media not giving this issue as much importance as it gave to death of 175 people, which compared to the suicide rates every year is about 10900 less.
The journalists or publications which do want to write about these suicides are not able to write anything because of their obligation towards the Government. If they do write, the Government would stop its advertisements to the newspaper. The news agencies have become so money minded that whole System is now totally disrupted. Most of the News Agencies are now biased to big MNCs and the ruling political parties. Nobody is bothered about the deaths of poor farmers struggling to survive each day at the rural parts of our country.
And the term “Free Media” is now got a new definition of its own. The media doesn’t belong to the public now. And all I can do is write this article and post it on the net and all that you can do is read it, think about doing something about it and later on move on with your own lives.
I came across a blog by Mr. Devinder Sharma, on the same issue. I think the conclusion on his blog has a voice of its own and may even provoke some of us to act towards this issue :
“Just like we get the politicians we deserve, we also get the media we deserve. Come on, wake up India. Pick up your pen and write a scathing letter to the editor of a newspaper that you read. Come on, take out your mobile and send a sms ever day to the TV channel that you normally watch. For them even death needs to be only acknowledged if it happens in a 5-star hotel.
Show them your anger, and they will listen.
Turning a blind eye to the massacre on the farm is not going to make your life peaceful. The fire is reaching your doorsteps.
Sooner or later, you and your children too would feel the heat. Don’t blame anyone then. You are primarily responsible for the crisis the country is faced with. Your fundamental rights that you emotionally talk about and demand, also includes your responsibility as a citizen. You and me have failed as a citizen. That is why we have such an insensitive media today.”
By
A.K. Shardul
I yr.  M. A. Communication
Ref:    Magazine:  Vidura, published by The Press Institute of India.
Websites:  www.indiatogether.org (http://www.indiatogether.org/2009/mar/agr-chsui.htm)

Billionaires of India

Mumbai: The Billionaires Club of India almost doubled from last year to 54 members up from 27, aided by a rebounding stock market that gained two-thirds in the past year and an economy growing at six per cent.
According to Forbes Asia magazine, the country’s 100 richest people have a combined net worth of $276 billion, which was almost a quarter of the country’s GDP.
Last year, there were only 27 billionaires on the India Rich List. This year, the number has almost doubled to 52-two short of what India had at the peak of the stock market boom in 2007.
Mukesh Ambani, heading Reliance Industries Limited, is once again the wealthiest person in India with his net worth increasing by 54 per cent to $32 billion from nearly $21 billion last year.
Trailing behind him are Lakshmi Mittal with a net worth of $30 billion, up 46 per cent from $20.5 billion, and Mukesh’s estranged brother, Anil, whose net worth of $17.5 billion, 40 per cent higher than before, put him in the third place.
India Editor of Forbes Asia Naazneen Karmali in a statement said, “Happy days are definitely back again for India’s richest. This year’s list shows yet again that when conditions in the financial markets and the economy are right, India has the scale and resources to produce billionaires faster than most of the countries on earth.”
Though, the top 10 positions remain largely unchanged, there are some shifts in fortunes across the list. Sunil Mittal has moved down from number four to number eight and Azim Premji has moved up to number four position.
The Ruia brothers with a net worth of $13.6 billion have made it to number five this year.
Adi Godrej has moved out of the top 10 to the number 12 position. Savitri Jindal, Nonexecutive Chairwoman of OP Jindal Group, at a net worth of $12 billion this year has made it to number seven on the list – she is one of only six women on the list.
The richest newcomers are two brothers from Torrent Power – Sudhir and Samir Mehta, ranked 23 at $2.02 billion.
Another notable mention is Nandan Nilekani, who has stepped down from Infosys board and is now a part of government. He ranks 43 with a net worth of $1.25 billion.
Southern India’s TV king, Kalanithi Maran, ranked 20, almost doubled his net worth to $2.3 billion from $1.2 billion. His Sun TV Network operates in four states in the south, a region that accounts for one-quarter of India’s population and one-third of those with television in their homes.
Forbes Asia features a cover story on Maran.

Consumerism

Consumerism
Consumerism is the equation of personal happiness with consumption and the purchase of material possessions.
The term is often associated with criticisms of consumption starting with Thorstein Veblen or, more recently by a movement called Enoughism.
Veblen’s subject of examination, the newly emergent middle class arising at the turn of the twentieth century, comes to full fruition by the end of the twentieth century through the process of globalization.
In economics, consumerism refers to economic policies placing emphasis on consumption. In an abstract sense, it is the belief that the free choice of consumers should dictate the economic structure of a society (cf. Producerism, especially in the British sense of the term)
Contents
* 1 History
* 2 Usage
* 3 Criticism
* 4.References
History
Consumerism has strong links with the Western world, but is in fact an international phenomenon. People purchasing goods and consuming materials in excess of their basic needs (subjective) is as old as the first civilizations (see Ancient Egypt, Babylon and Ancient Rome, for example).
A great turn in consumerism arrived just before the Industrial Revolution. While before the norm had been the scarcity of resources, The Industrial Revolution created an unusual situation: for the first time in history products were available in outstanding quantities, at outstandingly low prices, being thus available to virtually everyone. And so began the era of mass consumption, the only era where the concept of consumerism is applicable.
It’s still good to keep in mind that since consumerism began, various individuals and groups have consciously sought an alternative lifestyle, such as the “simple living”, “eco-conscious”, and “localvore”/”buy local”movements.
Consumerism, the promotion of consumer rights and protection. Subject to the doctrine of caveat emptor (Latin, “let the buyer beware”).
The older term and concept of “conspicuous consumption” originated at the turn of the 20th century in the writings of sociologist and economist, Thorstein Veblen. The term describes an apparently irrational and confounding form of economic behaviour. Veblen’s scathing proposal that this unnecessary consumption is a form of status display is made in darkly humorous observations like the following:
“It is true of dress in even a higher degree than of most other items of consumption, that people will undergo a very considerable degree of privation in the comforts or the necessaries of life in order to afford what is considered a decent amount of wasteful consumption; so that it is by no means an uncommon occurrence, in an inclement climate, for people to go ill clad in order to appear well dressed.” (The Theory of the Leisure Class, 1899).
The term “conspicuous consumption” spread to describe consumerism in the United States in the 1960s, but was soon linked to debates about media theory, culture jamming, and its corollary productivism.
“     By 1920 most people [Americans] had experimented with occasional installment buying.     ”
While consumerism is not a new phenomenon, it has become widespread over the course of the 20th century, and particularly in recent decades.
Usage
Webster’s dictionary defines Consumerism as “the promotion of the consumer’s interests” or alternately “the theory that an increasing consumption of goods is economically desirable”. It is thus the opposite of anti-consumerism or of producerism.
* Anti-consumerism is the socio-political movement against consumerism. In this meaning, consumerism is the equating of personal happiness with the purchasing material possessions and consumption.
* In relation to producerism, it is the belief that the free choice of consumers should dictate the economic structure of a society, rather than the interests of producers. It can also refer to economic policies that place an emphasis on consumption.
Criticism
Main article: Anti-consumerism
In many critical context, consumerism is used to describe the tendency of people to identify strongly with products or services they consume, especially those with commercial brand names and perceived status-symbolism appeal, e.g. a luxury automobile, designer clothing, or expensive jewelry. A culture that is permeated by consumerism can be referred to as a consumer culture or a market culture.
Opponents of consumerism argue that many luxuries and unnecessary consumer products may act as social mechanism allowing people to identify like-minded individuals through the display of similar products, again utilizing aspects of status-symbolism to judge socioeconomic status and social stratification. Some people believe relationships with a product or brand name are substitutes for healthy human relationships lacking in societies, and along with consumerism, create a cultural hegemony, and are part of a general process of social control in modern society. Critics of consumerism often point out that consumerist societies are more prone to damage the environment, contribute to global warming and use up resources at a higher rate than other societies.
In 1955, economist Victor Lebow stated (as quoted by Rees, 2009):
“     “Our enormously productive economy demands that we make consumption our way of life, that we convert the buying and use of goods into rituals, that we seek our spiritual satisfaction and our ego satisfaction in consumption. We need things consumed, burned up, worn out, replaced and discarded at an ever-increasing rate”.     ”
Critics of consumerism include Pope Benedict XVI, German historian Oswald Spengler (who said, “Life in America is exclusively economic in structure and lacks depth”]), and French writer Georges Duhamel, who held “American materialism up as a beacon of mediocrity that threatened to eclipse French civilization”.
In an opinion segment of New Scientist magazine published in August 2009, reporter Andy Coghlan cited William Rees of the University of British Columbia and epidemiologist Warren Hern of the University of Colorado at Boulder, saying that human beings, despite considering themselves civilized thinkers, are “subconsciously still driven by an impulse for survival, domination and expansion… an impulse which now finds expression in the idea that inexorable economic growth is the answer to everything, and, given time, will redress all the world’s existing inequalities.” According to figures presented by Rees at the annual meeting of the Ecological Society of America, human society is in a “global overshoot”, consuming 30% more material than is sustainable from the world’s resources. Rees went on to state that at present, 85 countries are exceeding their domestic “bio-capacities”, and compensate for their lack of local material by depleting the stocks of other countries, which have a material surplus due to their lower consumption.
Modern Consumerism in the 21st century
Beginning in the 1990s, the most frequent reason given for attending college had changed to making a lot of money, outranking reasons such as becoming an authority in a field or helping others in difficulty. This statement directly correlates with the rise of materialism, specifically the technological aspect. At this time compact disc players, digital media, personal computers, and cellular telephones all began to integrate into the affluent American’s everyday lifestyle. Madeline Levine criticized what she saw as a large change in American culture – “a shift away from values of community, spirituality, and integrity, and toward competition, materialism and disconnection.”
Businesses have realized that wealthy consumers are the most attractive targets for marketing their products. The upper class’ tastes, lifestyles, and preferences trickle down to become the standard which all consumers seek to emulate. The not so wealthy consumers can “purchase something new that will speak of their place in the tradition of affluence” . A consumer can have the instant gratification of purchasing an expensive item that will help improve their social status.
Emulation is also a core component of 21st century consumerism. As a general trend, regular consumers seek to emulate those who are above them in the social hierarchy. The poor strive to imitate the wealthy and the wealthy imitate celebrities and other icons. The celebrity endorsement of products can be seen as evidence of the desire of modern consumers to purchase products partly or solely to emulate people of higher social status. This purchasing behavior may co-exist in the mind of a consumer with an image of oneself as being an individualist.
Counter arguments
There has always been strong criticism of the anti-consumerist movement. Most of this comes from libertarian thought.
Libertarian criticisms of the anti-consumerist movement are largely based on the perception that it leads to elitism. Namely, libertarians believe that no person should have the right to decide for others what goods are necessary for living and which aren’t, or that luxuries are necessarily wasteful, and thus argue that anti-consumerism is a precursor to central planning or a totalitarian society. Twitchell, in his book Living It Up, sarcastically remarked that the logical outcome of the anti-consumerism movement would be a return to the sumptuary laws that existed in ancient Rome and during the Middle Ages, historical periods prior to the era of Karl Marx in the 19th century.
References
1. ^ Veblen, Thorstein (1899): The Theory of the Leisure Class: an economic study of institutions, Dover Publications, Mineola, N.Y., 1994, ISBN 0-486-28062-4. (also available: Project Gutenberg e-text)
2. ^ “Consumerism”. Britannica Concise Encyclopedia Online. 2008.
3. ^ See for example: Janet Luhrs’s “The Simple Living Guide” (NY: Broadway Books, 1997); Joe Dominquez, Vicki Robin et al., “Your Money or Your Life” (NY: Penguin Group USA, 2008)
4. ^ See for example: Alan Durning, “How Much is Enough: The Consumer Society and the Future of the Earth” (NY: W.W. Norton, 1992)
5. ^ See for example: Paul Roberts, “The End of Food” (NY: Houghton Mifflin, 2008); Michael Shuman, “The Small-mart Revolution” (San Francisco: Berrett-Koehler Publishers, 2007)
6. ^ Calder, Lendol Glen (1999). Financing the American Dream: A Cultural History of Consumer Credit. Princeton, NJ: Princeton University Press. p. 222. ISBN 069105827X.
7. ^ Fool Britannia
8. ^ Global Climate Change and Energy CO2 Production—An International Perspective
9. http://en.wikipedia.org/wiki/Consumerism.
Submitted by Balachandran, MSw, Sep, 2009.

Agriculture Issues in India

AGRICULTURAL ISSUES IN INDIA
INTRODUCTION
Agriculture is the backbone of the Indian Economy”- said Mahatma Gandhi five decades ago. Even today, as we enter the new millennium, the situation is still the same, with almost the entire economy being sustained by Your browser may not support display of this image. agriculture, which is the mainstay of the villages. Not only the economy, but also every one of us looks up to Your browser may not support display of this image. agriculture for our sustenance too.
AGRICULTURAL ISSUES AND    CHALLENGES
The need of the hour is not application of the technology but the adoption of appropriate technology, which would suit the particular level of the global community. Your browser may not support display of this image. In India, the farming practices are too haphazard and non-scientific and hence need some forethought before implementing any new technology.
Applications of Your browser may not support display of this image. agricultural inputs at uniform rates across the field without due regard to in-field variations in soil fertility and crop conditions
does not yield desirable results in terms of crop yield. The management of in-field variability in soil fertility and crop conditions for improving the crop production and minimizing the environmental impact is the crux of precision farming.
Thus, the information on spatial variability in soil fertility status and crop conditions is a pre-requisite for adoption of precision farming. Space technology including
global positioning system (GPS) and GIS holds good promise in deriving information on soil attributes and crop yield, and allows monitoring seasonally- variable soil and crop characteristics, namely soil moisture, crop-phenology, growth, evapotranspiration, nutrient deficiency, crop disease, and weed and insect infestation, which, in turn, help in optimizing inputs and maximizing crop yield and income. Though widely adopted in developed countries, the adoption of precision farming Your browser may not support display of this image. in India is yet to take a firm ground primarily due to its unique pattern of land holdings, poor infrastructure, lack of farmers’ inclination to take risk, socio-economic and demographic conditions.

Factors Contribution to Decline of Your browser may not support display of this image. Agriculture:
Slow Down in Your browser may not support display of this image. Agricultural and Rural Non-Farm Growth: Both the poorest as well as the more prosperous ‘Green Revolution’ states of Punjab, Haryana, Andhra Pradesh and Uttar Pradesh have recently witnessed a slow-down in Your browser may not support display of this image. agricultural growth and it ultimately lead for farmer’s suicide.

Some of the factors hampering the revival of growth are:
Poor composition of public expenditures: Public spending on Your browser may not support display of this image. agricultural subsidies is crowding out productivity-enhancing investments such as Your browser may not support display of this image. agricultural research and extension, as well as investments in rural infrastructure, and the health and education of the rural people. In 1999/2000, Your browser may not support display of this image. agricultural subsidies amounted to 3 percent of GDP and were over 7 times the public investments in the sector.
Over-regulation of domestic Your browser may not support display of this image. agricultural trade: While economic and trade reforms in the 1990s helped to improve the incentive framework, over-regulation of domestic trade has increased costs, price risks and uncertainty, undermining the sector’s competitiveness.
• Government interventions in labor, land, and credit markets: More rapid growth of the rural non-farm sector is constrained by government interventions in factor markets — labor, land, and credit — and in output markets, such as the small-scale reservation of enterprises.
Inadequate infrastructure and services in Your browser may not support display of this image. rural areas: Infrastructure is also a significant factor in the process of development but country like our rural Bharat has not posses the infrastructure such as roads, electricity, fertilizer and pesticides availability which caused the vulnerable damage to the growth of Your browser may not support display of this image. agriculture.

Weak Framework for Sustainable Water Management and Irrigation:
Inequitable
allocation of water: Many states lack the incentives, policy, regulatory, and institutional framework for the efficient, sustainable, and equitable allocation of water.
Deteriorating irrigation infrastructure: Public spending in
Ø irrigation is spread over many uncompleted projects. In addition, existing infrastructure has rapidly deteriorated as operations and maintenance is given lower priority.
Inadequate Access to Land and Finance:
Stringent land
Ø regulations discourage rural investments: While land distribution has become less skewed, land policy and regulations to increase security of tenure (including restrictions or bans on renting land or converting it to other uses) have had the unintended effect of reducing access by the landless and discouraging rural investments.
Computerization of land records has brought to light institutional weaknesses: State government initiatives to computerize land records have reduced transaction costs and increased transparency, but also brought to light institutional weaknesses.
Rural poor have little access to credit: While India has a wide network of rural finance institutions, many of the rural poor remain excluded, due to inefficiencies in the formal finance institutions, the weak regulatory framework, high transaction costs, and risks associated with lending to Your browser may not support display of this image. agriculture.

Weak Natural Resources Management: One quarter of India’s population depends on forests for at least part of their livelihoods.
A purely conservation approach to forests is ineffective: Experience Your browser may not support display of this image. in India shows that a purely conservation approach to natural resources management Your browser may not support display of this image. does not work effectively and does little to reduce poverty.
Weak resource rights for forest communities: The forest sector is also faced with weak resource rights and economic incentives for communities, an inefficient legal framework and participatory management, and poor access to markets.
Weak delivery of basic services in Your browser may not support display of this image. rural areas:
Low bureaucratic accountability and inefficient use of public funds: Despite large expenditures in
rural development, a highly centralized bureaucracy with low accountability and inefficient use of public funds limit their impact on poverty. In 1992, India amended its Constitution to create three tiers of democratically elected rural local governments bringing governance down to Your browser may not support display of this image. the villages. However, the transfer of authority, funds, and functionaries to these local bodies is progressing slowly, in part due to Your browser may not support display of this image. political vested interests. The poor are not empowered to contribute to shaping public programs or to hold local governments accountable.
Measures Needed Areas:

    1. Enhancing agricultural productivity, competitiveness, and rural growth Enhancing productivity: Creating a more productive, internationally competitive and diversified agricultural sector would require a shift in public expenditures away from subsidies towards productivity enhancing investments. Second it will require removing the restrictions on domestic private trade to improve the investment climate and meet expanding market opportunities. Third, the agricultural research and extension systems need to be strengthened to improve access to productivity enhancing technologies. The diverse conditions across India suggest the importance of regionally differentiated strategies, with a strong focus on the lagging states. Improving Water Resource and Irrigation/Drainage Management: Increase in multi-sectoral competition for water highlights the need to formulate water policies and unbundle water resources management from irrigation service delivery. Other key priorities include: (i) modernizing Irrigation and Drainage Departments to integrate the participation of farmers and other agencies in irrigation management; (ii) improving cost recovery; (iii) rationalizing public expenditures, with priority to completing schemes with the highest returns; and (iv) allocating sufficient resources for operations and maintenance for the sustainability of investments. Strengthening rural non-farm sector growth: Rising incomes are fueling demand for higher-value fresh and processed agricultural products in domestic markets and globally, which open new opportunities for agricultural diversification to higher value products (e.g. horticulture, livestock), agro-processing and related services. The government needs to shift its role from direct intervention and overregulation to creating the enabling environment for private sector participation and competition for agribusiness and more broadly, the rural non-farm sector growth. Improving the rural investment climate includes removing trade controls, rationalizing labor regulations and the tax regime (i.e. adoption of the value added tax system), and improving access to credit and key infrastructure (e.g. roads, electricity, ports, markets). 2. Improving access to assets and sustainable natural resource use balancing poverty reduction and conservation priorities: Finding win-win combinations for conservation and poverty reduction will be critical to sustainable natural resource management. This will involve addressing legal, policy and institutional constraints to devolving resource rights, and transferring responsibilities to local communities.
    Improving access to land: States can build on the growing consensus to reform land policy, particularly land tenancy policy and land administration system. States that do not have tenancy restrictions can provide useful lessons in this regard. Over the longer term, a more holistic approach to land administration policies, regulations and institutions is necessary to ensure tenure security, reduce costs, and ensure fairness and sustainability of the system.
Improving access to rural finance: It would require improving the performance of regional rural banks and rural credit cooperatives by enhancing regulatory oversight, removing government control and ownership, and strengthening the legal framework for loan recovery and the use of land as collateral. It would also involve creating an enabling environment for the development of micro-finance institutions in rural areas.

  3. Strengthening institutions for the poor and promoting rural livelihood Promoting Community-Based Rural Development: State Government efforts in scaling up livelihood and community-driven development approaches will be critical to build social capital in the poorest areas as well as to expand savings mobilization, promote productive investments, income generating opportunities and sustainable natural resource management. Direct support to self-help groups, village committees, user’s associations, savings and loans groups and others can provide the initial ’push’ to move organizations to higher level and access to new economic opportunities. Moreover, social mobilization and particularly the empowerment of women’s groups, through increased capacity for collective action will provide communities with greater “voice” and bargaining power in dealing with the private sector, markets and financial services.
Local governments’ capacity to identify local priorities through participatory budgeting and planning needs to be strengthened. This, in turn, would improve the rural investment climate, facilitating the involvement of the private sector, creating employment opportunities and linkages between farm and non-form sectors.

SUBMITTED BY: R. SRI HARINI, (08MSW025), August, 2009

JNNURM

JAWAHARLAL NEHRU NATIONAL URBAN
RENEWAL MISSION

Overview
Contents
I. Need for Development of the Urban Sector 3
1. Background 3
2. Need for Reform Initiatives 3
3. Rationale for the JNNURM 4
II. Jawaharlal Nehru National Urban Renewal Mission 5
1. The Mission 5
2. Objectives of the Mission 5
3. Scope of the Mission 5
4. Strategy of the Mission 6
5. Duration of the Mission 6
6. Expected Outcome of the Mission 6
III. Assistance under JNNURM 8
1. Financial Assistance under JNNURM 8
2. Areas of Assistance under JNNURM 8
IV. Eligible Cities, Sectors and Projects 10
1. Cities Eligible for Assistance under the JNNURM 10
2. Sectors and Projects Eligible for Assistance under the
Sub-Mission Directorate for Urban Infrastructure and Governance 10
3. Sectors and Projects Eligible for Assistance under the
Sub- Mission Directorate for Basic Services to the Urban Poor 11
4. Sectors Ineligible for JNNURM Assistance 11
V. Agenda of Reforms 12
1. Mandatory Reforms 12
2. Optional Reforms 13
Annex : List of Eligible Cities 14
2
I. Need for Development of the Urban Sector
1. Background
(1) Need for Urban Sector Development: According to the 2001 census, India has a population of 1027 million with approximately 28per cent or 285 million people living in urban areas.
As a result of the liberalization policies adopted by the Government of India is expected to
increase the share of the urban population may increase to about 40 per cent of total population by the year 2021. It is estimated that by the year 2011, urban areas would contribute about 65 per cent of gross domestic product (GDP). However, this higher productivity is contingent upon the availability and quality of infrastructure services. Urban economic activities are ependent on infrastructure, such as power, telecom, roads, water supply and mass ransportation, coupled with civic infrastructure, such as sanitation and solid waste
management.
(2) Investment Requirements in the Urban Sector: It is estimated that over a seven-year
period, the Urban Local Bodies (ULBs)1 would require a total investments of Rs. 1,20,536 crores.
This includes investment in basic infrastructure and services, that is, annual funding requirement of Rs. 17,219 crores. It is well recognised that in order to fructify these investments, a national evel initiative is required that would bring together the State Governments and enable ULBs catalyse investment flows in the urban infrastructure sector.
2. Need for Reform Initiatives
(1) Harnessing the Potential of Reforms in Urban Infrastructure: While several reform
initiatives have being taken e.g. the 74th Constitutional Amendment Act and model municipallaw, there is potential for further reform-oriented steps in order to meet the development
objectives. Reform initiatives also need to be taken further and articulated by the State
Governments in order to create an investor-friendly environment.
URBAN SECTOR INVESTMENT REQUIREMENT
(Rs. crore)
Category Number of Investment Annual Funds
Cities Requirement Requirement
(over 7 years
starting 2005-06)
Cities with over 4 million population 7 57,143 8163.3
Cities with 1-4 million population 28 57,143 8613.3
Selected Cities with less than 1
million population 28 6,250 892.9
Total 63 1,20,536 17219.5
1 In 63 identified cities
3
(2) Need for National-Level Reform-Linked Investments: There is a need to integrate the
reform initiatives and scale up the effort to catalyse investment in urban infrastructure acrossStates in the country. There is a felt need to set up an initiative that will provide reformlinked assistance to State Governments and ULBs in the country.
(3) Need for Sustainable Infrastructure Development: Another crucial aspect requiring
immediate attention is that physical infrastructure assets created in urban areas have generally been languishing due to inadequate attention and/or improper O&M. The fiscal flows to the sector have laid emphasis only on the creation of physical assets. Not much effort has been made either to manage these assets efficiently or to achieve self-sustainability. It is therefore necessary that a link be established between asset creation and management, as both are important components for ensuring sustained service delivery. This is proposed to be secured through an agenda of reforms.
(4) Need for Efficiency Enhancement: Concurrent with statutory reforms, such as the enactment of a model municipal law, reduction in stamp duty, repeal of the Urban Land (Ceiling and Regulation) Act, 1976 (ULCRA) etc, there is an urgent need to take measures to enhanceefficiencies in urban service deliveries.
3. Rationale for the JNNURM
(1) National Common Minimum Programme of the Government of India: The National
Common Minimum Programme attaches the highest priority to the development and
expansion of physical infrastructure. Accordingly, it is proposed to take up a comprehensive
programme of urban renewal and expansion of social housing in towns and cities, paying
attention to the needs of slum dwellers.
(2) Commitment to Achieving the Millennium Development Goals: The Millennium
Development Goals commit the international community, including India, to an expanded
vision of development as a key to sustaining social and economic progress. As a part of its
commitment to meet the Millennium Development Goals, the Government of India proposes
to: (i) facilitate investments in the urban sector; and (ii) strengthen the existing policies in
order to achieve these goals.
(3) Need for a Mission-led Initiative: Since cities and towns in India constitute the second
largest urban system in the world, and contribute over 50 per cent of the country’s GDP,theyare central to economic growth. For the cities to realise their full potential and become effective engines of growth, it is necessary that focused attention be given to theimprovement of infrastructure.
4
II. Jawaharlal Nehru National Urban
Renewal Mission

1. The Mission
Mission Statement: The aim is to encourage reforms and fast track planned development of identified cities. Focus is to be on efficiency in urban infrastructure and service delivery mechanisms, communityparticipation, and accountability of ULBs/ Parastatal agencies towards citizens.
2. Objectives of the Mission
(1) The objectives of the JNNURM are to ensure that the following are achieved in the urban sector;.
(a) Focussed attention to integrated development of infrastructure services in citiescovered under the Mission;.
(b) Establishment of linkages between asset-creation and asset-management through a slew of reforms for long-term project sustainability;.
(c) Ensuring adequate funds to meet the deficiencies in urban infrastructural services;.
(d) Planned development of identified cities including peri-urban areas, outgrowths and urban corridors leading to dispersed urbanisation;.
(e) Scale-up delivery of civic amenities and provision of utilities with emphasis onuniversal
access to the urban poor;.
(f ) Special focus on urban renewal programme for the old city areas to reduce congestion;and
(g) Provision of basic services to the urban poor including security of tenure at affordable prices,improved housing, water supply and sanitation, and ensuring delivery of other existing universal services of the government for education, health and social security.
3. Scope of the Mission
The Mission shall comprise two Sub- Missions, namely:
(1) Sub-Mission for Urban Infrastructure and Governance: This will be administered by the Ministry of Urban Development through the Sub- Mission Directorate for Urban
Infrastructure and Governance. The main thrust of the Sub-Mission will be on infrastructureprojects relating to water supply and sanitation, sewerage, solid waste management, road network, urban transport and redevelopment of old city areas with a view to upgradinginfrastructure therein, shifting industrial and commercial establishments to conforming areas, etc.
5
(2) Sub-Mission for Basic Services to the Urban Poor: This will be administered by the
Ministry
of Urban Employment and Poverty Alleviation through the Sub-Mission Directorate for
Basic Services to the Urban Poor. The main thrust of the Sub-Mission will be on integrated development of slums through projects for providing shelter, basic services and other related civic amenities with a view to providing utilities to the urban poor.
4. Strategy of the Mission
The objectives of the Mission shall be met through the adoption of the following strategy:
(1) Preparing City Development Plan: Every city will be expected to formulate a City
Development Plan (CDP) indicating policies, programmes and strategies, and financing plans.
(2) Preparing Projects: The CDP would facilitate identification of projects. The Urban Local
Bodies (ULBs) / parastatal agencies will be required to prepare Detailed Project Reports
(DPRs) for undertaking projects in the identified spheres. It is essential that projects are
planned in a manner that optimises the life-cycle cost of projects. The life-cycle cost of a
project would cover the capital outlays and the attendant O&M costs to ensure that assets are in good working condition. A revolving fund would be created to meet the O&M requirements of assets created, over the planning horizon. In order to seek JNNURM assistance, projects would need to be developed in a manner that would ensure and demonstrate optimisation of the life-cycle costs over the planning horizon of the project.
(3) Release and Leveraging of Funds: It is expected that the JNNURM assistance would serve to catalyse the flow of investment into the urban infrastructure sector across the country.
Funds from the Central and State Government will flow directly to the nodal agency designated by the State, as grants-in-aid. The funds for identified projects across cities would be disbursedto the ULB/Parastatal agency through the designated State Level Nodal Agency (SLNA) assoft loan or grant-cum-loan or grant. The SLNA / ULBs in turn would leverage additionalresources from other sources.
(4) Incorporating Private Sector Efficiencies: In order to optimise the life-cycle costsover theplanning horizon, private sector efficiencies can be inducted in development, management, implementation and financing of projects, through Public Private Partnership (PPP)arrangements.
5. Duration of the Mission
The duration of the Mission would be seven years beginning from the year 2005-06. Evaluation
of the experience of implementation of the Mission would be undertaken before the
commencement of Eleventh Five Year Plan and if necessary, the program calibrated suitably.
6. Expected Outcomes of the JNNURM
On completion of the Mission period, it is expected that ULBs and parastatal agencies will have achieved the following:
6
(1) Modern and transparent budgeting, accounting, financial management systems, designedand adopted for all urban service and governance functions
(2) City-wide framework for planning and governance will be established and become operational
(3) All urban residents will be able to obtain access to a basic level of urban services
(4) Financially self-sustaining agencies for urban governance and service delivery will beestablished, through reforms to major revenue instruments
(5) Local services and governance will be conducted in a manner that is transparent and accountable to citizens
(6) E-governance applications will be introduced in core functions of ULBs/Parastatal resultingin reduced cost and time of service delivery processes.
III. Assistance under JNNURM
1. Financial Assistance under JNNURM
The Government of India has proposed substantial assistance through the JNNURM over the seven-year period. During this period, funds shall be provided for proposals that would meet theMission’s requirements2.
Under JNNURM financial assistance will be available to the ULBs and parastatal agencies whichcould deploy these funds for implementing the projects themselves or through the special purpose vehicles (SPVs) that may be expected to be set up.
Assistance under JNNURM is additional central assistance, which would be provided as grant (100 per cent central grant) to the implementing agencies.
Further, assistance from JNNURM is expected to facilitate further investment in the urban sector. To this end, the implementing agencies are expected to leverage the sanctioned funds under JNNURM to attract greater private sector investments through PPP that enables sharing of risks between the private and public sector.
2. Areas of Assistance under JNNURM
(1) Assistance for Capacity Building, City Development Plan (CDP), Detailed Project Reports
(DPRs), Community Participation, Information, Education and Communication (IEC)
The JNNURM will provide assistance for the above-stated components with a provision of
5 per cent of the total central assistance or the actual requirement, which ever is less. In
addition, not more than 5 percent of the Central grant or the actual requirement, whichever is less may be used for Administrative and Other Expenses (A&OE) by the States For capacity building, ULBs and parastatal agencies could engage consultants, in consultation with the SLNA, and seek reimbursement from the Ministry of Urban Development (MoUD) of the Mnistry of Urban Employment and Poverty Alleviation (MoUEPA).
(2) Investment Support Component
Investment support will be provided to implementing agencies on a project-specific basis for eligible sectors and projects proposed to be undertaken in eligible cities subject to approval of the Central Sanctioning and Monitoring Committee (CSMC) of MoUD/ MoUEPA.
As part of the process for seeking investment support, each ULB seeking assistance from the JNNURM would be required to prepare a CDP that shall inter alia include strategy to
2 Refer Section IV: Eligible Cities, Sectors and Projects
8
implement reforms, city-level improvements and an investment plan to address the infrastructure needs in a sustainable manner.
Assistance under investment support can be deployed in the following forms:
(a) Enhancing Resource Availability: The JNNURM assistance can be used to leverage additional resources available with the ULBs in addition to their existing resources and transfers from the State. These resources could be utilised for capital investment and O&M investments in a project.
(b) Enhancing Commercial Viability of Projects: In respect of projects, which are not
commercially viable on a stand-alone basis, assistance under the JNNURM may be sought
for enhancing project viability. This assistance could be in the nature of viability gap support to projects.
(c) Ensuring Bankability of Projects: Cash flows of infrastructure projects having long gestation periods are susceptible to variations in cash flows, rendering a project non-bankable. To enhance predictability of underlying cash-flows, credit enhancement mechanisms such as establishing liquidity support mechanisms, up-front debt-service reserve facility, deep discount bonds, contingent liability support and equity support are required in order to make the projects bankable. The JNNURM assistance could therefore be used for funding such support mechanisms.
9
IV. Eligible Cities, Sectors and Projects
1. Cities Eligible for Assistance under the JNNURM
(1) Eligible Cities: The JNNURM shall give assistance for infrastructure development in the eligible cities/ Urban Agglomerations (UAs) (refer Annex) across States in the country.
These cities/ UAs have been selected based as per the following criteria:
The cities should have elected bodies in position.
2. Sectors and Projects Eligible for Assistance under the Sub-Mission
Directorate for Urban Infrastructure and Governance
The sectors and projects eligible for JNNURM assistance would be as follows:
(1)Urban renewal, that is, redevelopment of inner (old) city areas [including widening of narrow streets, shifting of industrial and commercial establishments from non-conforming (inner city) areas to conforming (outer city) areas to reduce congestion, replacement of old and worn out pipes by new and higher capacity ones, renewal of the sewerage, drainage, and solid waste disposal system etc.] ;
(2) Water supply (including desalination plants) and sanitation.
(3) Sewerage and solid waste management.
(4) Construction and improvement of drains and storm water drains.
(5) Urban transportation including roads, highways, expressways, MRTS, and metro projects.
(6) Parking lots and spaces on PPP basis.
(7) Development of heritage areas
(8) Prevention and rehabilitation of soil erosion and landslides only in cases of special category States where such problems are common; and
(9) Preservation of water bodies.
A Cities/ UAs with 4 million plus population as per 2001 census 07
B Cities/ UAs with 1 million plus but less than 4 million population as per 2001 census 28
C Selected Cities/ UAs (State Capitals and other cities/ UA of religious/
historic and tourist importance) 28
10
NOTE: Land cost will not be financed except for acquisition of private land for schemes and projects in the North Eastern States and hilly States, namely Himachal Pradesh, Uttaranchal and Jammu and Kashmir
3. Sectors and Projects Eligible for Assistance under the Sub-Mission
Directorate for Basic Services to the Urban Poor.
The sectors and projects eligible for JNNURM assistance in eligible cities would be asfollows:
(1) Integrated development of slums, housing and development of infrastructure projects in slums in the identified cities;.
(2) Projects involving development, improvement, and maintenance of basic services to the urban poor.
(3) Slum improvement and rehabilitation of projects.
(4) Projects on water supply, sewerage, drainage, community toilets, and baths etc.
(5) Projects for providing houses at affordable cost for slum dwellers, urban poor,
economically
weaker sections (EWS) and lower income group (LIG) categories.
(6) Construction and improvement of drains and storm water drains.
(7) Environmental improvement of slums and solid waste management.
(8) Street lighting.
(9) Civic amenities like community halls, child care centres etc.
(10) Operation and Maintenance of assets created under this component.
(11) Convergence of health, education and social security schemes for the urban poor
NOTE: Land cost will not be financed except for acquisition of private land for schemes and projects in the North Eastern States and hilly States, namely Himachal Pradesh, Uttaranchal and Jammu and Kashmir.
4. Inadmissible Components for JNNURM Assistance
Projects pertaining to the following are not eligible for JNNURM assistance:
(1) Power
(2) Telecom
(3) Health
(4) Education
(5) Wage employment programme and staff components.
(6) Creation of fresh employment opportunities
11
V. Agenda of Reforms
The thrust of the JNNURM is to ensure improvement in urban governance and service delivery so that ULBs become financially sound and sustainable for undertaking new programmes. It is also envisaged that, with the charter of reforms that are followed by the State governments and ULBs, a stage will be set for PPPs.
The agenda of reforms is given in the section below. The National Steering Group (NSG) may add additional reforms to identified reforms. A Memorandum of Agreement (MoA) between States/ULBs/Parastatal agencies and the Government of India, a prerequisite for accessing the Central assistance, would spell out specific milestones to be achieved for each item of reform.
All mandatory and optional reforms shall be completed within the Mission period.
1. Mandatory Reforms
(1) Mandatory Reforms at the Level of ULBs, and Parastatal Agencies
(a) Adoption of modern accrual-based double entry system of accounting in ULBs and
parastatal agencies.
(b) Introduction of a system of e-governance using IT applications, such GIS and MIS for
various services provided by ULBs and parastatal agencies.
(c) Reform of property tax with GIS. It becomes a major source of revenue for ULBs and
arrangements for its effective implementation so that collection efficiency reaches at least
85 per cent within next seven years.
(d) Levy of reasonable user charges by ULBs and Parastatals with the objective that the full cost of O&M or recurring cost is collected within the next seven years. However, cities
and towns in the North East and other special category States may recover only 50 per
cent of O&M charges initially. These cities and towns should graduate to full O&M cost
recovery in a phased manner.
(e) Internal earmarking, within local bodies, budgets for basic services to the urban poor.
(f ) Provision of basic services to the urban poor including security of tenure ataffordable
prices, improved housing, water supply and sanitation. Delivery of other existing universal
services of the government for education, health and social security is ensured.
2) Mandatory Reforms at the Level of States
(a) Implementation of decentralisation measures as envisaged in 74th Constitutional
Amendment Act. The State should ensure meaningful association and engagement of
ULBs in planning the function of parastatal agencies as well as the delivery of services to
the citizens.
(b) *Repeal of ULCRA.
12
(c) *Reform of Rent Control Laws balancing the interests of landlords and tenants.
(d) Rationalisation of Stamp Duty to bring it down to no more than 5 per cent within next
seven years.
(e) Enactment of the Public Disclosure Law to ensure preparation of medium-term fiscal
plan of ULBs and parastatal agencies and release of quarterly performance information to
all stakeholders.
(f ) Enactment of the Community Participation Law to institutionalise citizen’sparticipation
and introduce the concept of the Area Sabha in urban areas.(g) Assigning or associating elected ULBs with “city planning function”. Over a period of
seven years, transferring all special agencies that deliver civic services in urban areas to
ULBs and creating accountability platforms for all urban civic service providers in
transition.
* Note: In respect of people oriented schemes relating to water supply and sanitation, theunder-mentioned State level
mandatory reforms may be taken as optional reforms:
b) Repeal of Urban Land Ceiling and Regulation Act
c) Reform of Rent Control Act
2. Optional Reforms (common to States, ULBs and Parastatal Agencies)
The following optional reforms are expected to be undertaken by ULBs, parastatal agencies and State governments:
(a) Revision of bye-laws to streamline the approval process for construction of buildings,
development of site etc.
(b) Simplification of legal and procedural frameworks for conversion of land from agricultural to non-agricultural purposes.
(c) Introduction of Property Title Certification System in ULBs.
(d) Earmarking at least 20-25 per cent of developed land in all housing projects (both public andprivate agencies) for EWS and LIG category with a system of cross subsidisation.
(e) Introduction of computerised process of registration of land and property.
(f ) Revision of byelaws to make rain-water harvesting mandatory in all buildings and  adoption of water conservation measures.
(g) Byelaws for reuse of recycled water.
(h) Administrative reforms i.e. reduction in establishment costs by adopting the Voluntary
Retirement Scheme (VRS), not filling posts falling vacant due to retirement etc., and achieving specified milestones in this regard.
(i) Structural reforms.
(j) Encouraging PPP.
Note: Cities under the JNNURM will have the freedom to opt for any two reforms from the optional category in each year of implementation.
13
Category C*
Cities/ UAs with less than one
million population

(1) Guwahati
(2) Itanagar
(3) Jammu
(4) Raipur
(5) Panaji
(6) Shimla
(7) Ranchi
(8) Thiruvananthapuram
(9) Imphal
(10) Shillong
(11) Aizawl12) Kohima
(13) Bhubaneshwar
(14) Gangtok
(15) Agartala
(16) Dehradun
(17) Bodhgaya
(18) Ujjain
(19) Puri
(20) Ajmer-Pushkar
(21) Nainital
(22) Mysore
(23) Pondicherry
(24) Chandigarh
(25) Srinagar
(26) Mathura
(27) Haridwar
(28) Nanded
Category A
Mega Cities/ UAs
(1) Delhi
(2) Greater Mumbai
(3) Ahmedabad
(4) Bangalore
(5) Chennai
(6) Kolkata
(7) Hyderabad
Annex
List of Identified Cities Eligible for JNNURM
* The National Steering Group (NSG) may consider addition or deletion of cities/ UAs/towns under Category C (other than State capitals) based on the suggestions received from State Governments. The total number of cities under the Mission shall, however, remain around 60.
Category B
Million plus Cities/ UAas
(1) Patna
(2) Faridabad
(3) Bhopal
(4) Ludhiana
(5) Jaipur
(6) Lucknow
(7) Madurai
(8) Nashik
(9) Pune
(10) Cochin
(11) Varanasi
(12) Agra
(13) Amritsar
(14) Vishakhapatnam
(15) Vadodara
(16) Surat
(17) Kanpur
(18) Nagpur
(19) Coimbatore
(20) Meerut
(21) Jabalpur
(22) Jamshedpur
(23) Asansol
(24) Allahabad
(25) Vijayawada
(26) Rajkot
(27) Dhanbad
(28) Indore
Submitted by Suresh Kumar, MSw, Aug 2009.

NREGA

NATIONAL RURAL EMPLOYMENT GUARANTEE ACT (NREGA)
SUBMITTED BY:
SWETHA SHANKAR, 08MPS013,  II MSC PSYCHOLOGY, PSGCAS, August 2009.
Preamble
The Act aims to provide the enhancement of livelihood security of the households in rural areas of the country by providing at least one hundred days of guaranteed wage employment in every financial year to every household whose adult members volunteer to do unskilled manual work.

The National Rural Employment Guarantee Act is based on the following articles of the Indian Constitution:

The “right to life” is a fundamental right of all citizens under Article 21 of the Indian Constitution.
“Right to life… includes the right to live with human dignity; it would include all these aspects which would make life meaningful, complete and living.” (Supreme Court)
“The State shall… direct its policy towards securing that the citizen, men and women equally, have the right to an adequate means of livelihood…” (Article 39A)
“The State shall … make effective provision for securing the right to work…” (Article 41)
The National Rural Employment Guarantee Act (NREGA, also known as National Rural Employment Guarantee Scheme, NREGS) is a legislation enacted by the Indian Government (UPA led coalition) on  HYPERLINK “http://en.wikipedia.org/wiki/August_25″ \o “August 25″ August 25,  HYPERLINK “http://en.wikipedia.org/wiki/2005″ \o “2005″ 2005. The NREGA provides a legal guarantee for one hundred days of employment in every financial year to adult members of any rural household willing to do  HYPERLINK “http://en.wikipedia.org/wiki/Public_work” \o “Public work” public work-related unskilled manual work at the statutory  HYPERLINK “http://en.wikipedia.org/wiki/Minimum_wage” \o “Minimum wage” minimum wage.
This act was introduced with an aim of improving the purchasing power of the rural people, primarily semi or un-skilled work to people living below  HYPERLINK “http://en.wikipedia.org/wiki/Poverty_line” \o “Poverty line” poverty line in rural India. It attempts to bridge the gap between the rich and poor in the country. Roughly one-third of the stipulated work force must be women.
The salient features of the act are as follows:
For the first time in the history of India, every rural household will have right to livelihood through guaranteed 100 days of employment in a financial year at their own place.
Every household will have right to demand 100 days employment from the government.
If State Government failed to provide 100 days employment on demand to any household then compensation will be paid by the State Government to the eligible applicants subject to household entitlement in terms of un-employment allowance as per rates prescribed.
Villagers themselves, not officials, will decide through Gram / Ward Sabha, the priority works to be taken up to develop their village from amongst the permissible works.
In their order of priority the following works are permitted:-
Water conservation and water harvesting.
Drought proofing, including afforestation and tree plantation.
Irrigation canals including micro and minor irrigation works.
Irrigation facilities for land owners by household belonging to SC/ST or to land of beneficiaries of land reforms or that of the beneficiaries under the Indira Awas Yojana.
Renovation of traditional water bodies, including de-silting of tanks.
Land development.
Flood control and protection of works, including drainage in water logged areas.
Rural connectivity to provide all-weather roads.
Any other work, which may be notified by the Central Government in consultation with State Governments.
Under the NREG Act the Central Government is legally committed to provide 90% of funds for implementation of the Scheme and the remaining 10% funds will be contributed by the state governments
A total 60% of funds will be utilized for meeting the cost of unskilled wages and 40% for materials component of the works including the cost of wages of semi-skilled and skilled labourers under the scheme.
A National Employment Guarantee Fund will be created at the Central Government level. The States may also create State Employment Guarantee funds.
Monitoring of all projects under the jurisdiction of Gram Panchayat will be done by the Gram Sabha along with Social Audit. Monitoring will also be done by the Employment Guarantee Councils at the Central and State levels.
Women will have priority in the scheme for allocation of employment and 1/3rd of the employment will be provided to them.
There will be complete transparency in the scheme and wages will be paid in full public view. For example, muster rolls will no longer be secret and budget and works will be in public knowledge. (Right to Information Act)
Under the scheme, a number of facilities will be provided at work-site. Besides, there are provisions for free medical treatment in case of injury at worksite and compensation in case of death or permanent disability of labourers
Every household in rural areas whose adult members are willing to do unskilled manual work is eligible for employment
The adult members of every household are to submit their names, age and address for registration to the Gram Panchayat, who are duty bound to register them after making such inquiry as it deems fit. This registration will be valid for five years.
After registration, every household will be issued a job card.
The registration / job card means only the entitlement for employment. But to get employment, the registered adult should request for it through an application in writing to Gram Panchayat or Programme Officer and ask dated receipt of application. The application is to be submitted for at least 14 days of continuous work.
In case an applicant is already employed he/she should submit advance application stating the date from which he/she wants work.
Within 15 days of submitting the application or the date from which employment is sought, whichever is later, employment will be provided. If in any case that is not provided, then the applicant becomes eligible for un-employment allowance.
Only the household as a whole will get 100 days employment, These days can be split among adult members
Same wages shall be given to women and men. There is no discrimination against women labourers.
Shades shall be provided at work site for the children below the age of six years accompanying the women labourers.
If there are five or more such children accompanying the women labourers at work site, one women labourer shall be deputed to look after the children and she shall be paid full wages.
Minimum wages fixed for agricultural labours by the respective state governments will be paid as wages under the Schemes till such time that the Central Govt. specifies wage rate which will not be less than rupees 60 per day per person.
Wages will be paid fully in cash or partly in cash and partly in kind. However, minimum 25% of wages shall be paid in cash.
Wages are to be paid on weekly basis and in any case not later than 15 days. There is a provision for paying a portion of the cash wages on daily basis.

IMPLEMENTATION OF NREGA

The Act came into force on February 2, 2006 and was implemented in a phased manner. In Phase one it was introduced in 200 of the most backward districts of the country. It was implemented in an additional 130 districts in Phase two 2007-2008. As per the initial target, NREGA was to be expanded countrywide in five years. However, in order to bring the whole nation under its safety net and keeping in view the demand, the Scheme was extended to the remaining 274 rural districts of India from April 1, 2008 in Phase III.
NREGA is the first program to have been implemented with full IT support. TATA Consultancy Services, India’s largest IT/ITES sector company has designed the software solution for the state of Andhra Pradesh. NIC, a government of India undertaking, developed solution has been implemented in other areas.
It is the first ever law internationally, that guarantees wage employment at an unprecedented scale. The primary objective of the Act is augmenting wage employment. Its auxiliary objective is strengthening natural resource management through works that address causes of chronic poverty like drought, deforestation and soil erosion and so encourage sustainable development. The process outcomes include strengthening grassroots processes of democracy and infusing transparency and accountability in governance.
In 2007-08, 3.39 crore households were provided employment and 143.5 crore person days were generated in 330 districts. In 2008-2009, upto July, 253 crore households have been provided employment and 85.29 crore person days have been generated.
Self targeting in nature, the Program has high works participation of marginalized groups like SC/ST (57%), women (43%) in 2007-2008, In 2008-2009, upto July, the participation is SC/ST (54%) and women (49%) strengthening Natural Resource Base of Rural India: In 2007-08, 17.88 lakh works have been undertaken, of which 49% were related to water conservation. In 2008-2009, upto July, 16.88 lakh works have been undertaken, of which 49% are related to water conservation.
Initial evidence through independent studies indicates enhancement of agricultural productivity (through water harvesting, check dams, ground water recharging, improve moisture content, check in soil erosion and micro-irrigation), stemming of distress migration, increased access to markets and services through rural connectivity works, supplementing household incomes, Increase in women workforce participation ratios and the regeneration of natural resources. The Rozgar Jagrookta Puruskar award has been introduced to recognize outstanding Contributions by Civil society Organizations at State, District, Block and Gram Panchayat levels to generate awareness about provisions and entitlements and ensuring compliance with implementing processes.
NREGA Statistics

State : TAMIL NADU
Employment provided to households:
18.39485 Lakhs
Persondays [in Lakh]:
Total:
532.37
SCs:
311.46 [58.5%]
STs:
10.61 [1.99%]
Women:
420.89  [79.06%]
Others:
210.3 [39.5%]
Total fund:
990.18   Crore.
Expenditure:
439.7 Crore.
Total works taken up:
29463
Works completed:
3052
Works in progress:
26411
PROS AND CONS
The National Rural Employment Guarantee Act (NREGA) is seen as a piece of legislation that can potentially transform the picture of rural poverty. But even as NREGA, the United Progressive Alliance’s (UPA’s) flagship rural development programme, has been applauded for its relative deficit of corruption and its efficient transfer of payments to poor families, doubts have begun to emerge about the quality of the assets being created. “There are major question marks about whether these assets are long term, or if they will die out,” says Laveesh Bhandari, an economist at research firm Indicus Analytics. “On the documents, one sees ponds and tanks and so on, and that is fine, but these need to be maintained systematically, for instance. I haven’t seen any studies that have looked at this aspect at all.”
At the heart of this debate is, in a sense, the character of NREGA itself: whether it is intended purely to be an employment generator, or whether it is simultaneously intended to manufacture assets of practical and lasting value. Apart from the fact that these water management projects have tended to be hyper-local rather than part of a larger plan, quality control is also a major problem, in NREGA projects across the country.
The question of quality has attracted the attention of the Institute of Development Studies, Jaipur (IDSJ), and one of its associate professors, Purnendu Kavoori, will soon participate in an 11-month study to assess water harvesting structures built under NREGA in eight or nine panchayats in different parts of Rajasthan.
“You do have people with initiatives who think systematically, and some non-governmental organizations (NGOs) advising, but in some cases, there’s no thinking through—whatever is most bureaucratically feasible is getting done,” Kavoori says. “So some tanks are dug too deep, for instance—the whole idea seems to be mechanical. Partly it’s a lack of technical supervision, but also a lack of imagination and genuine concern.”
In its research, IDSJ works with the Foundation for Ecological Security (FES), the only NGO involved in implementing NREGA projects in Rajasthan. This year, FES is working with Rs80 lakh of NREGA money in 225 villages in the district of Bhilwara, on projects that are ecologically sensible. Sanjay Joshi, FES’ regional team leader in Bhilwara, says: “To be frank, the government-planned projects don’t really have much of an ecological perspective Joshi and his team has, over the last couple of years, seen numerous NREGA structures that are merely “okay”, as Joshi puts it. One of his deputies, S.S. Singh, describes complex soil-water-nutrient dynamics that the NREGA planners are overlooking. Another member of the FES team, Shantanu Sinha Ray, has seen cases where one structure defeats the purpose of another just some distance away. “I think,” Ray says, “that the pressure to provide gainful employment is just too great.”
Simultaneously, however, Bhandari and others do not dispute the utility of the programme, and the rural development ministry’s recent proposal to expand NREGA beyond the limitations of unskilled manual labour into the realm of social and economic infrastructure may require a new found focus on quality. “You do want interventions that are financially sound as well as socially beneficial,” Kavoori says. “But somehow, that has not yet entered the NREGA vocabulary.”
With assured work for parents, the pressure on children to skip school and find work will be reduced substantially. India is a demographically young nation and the potential that can be realized from educating the poor rural child is enormous. The money that will be pumped into rural economies has the potential of reinvigorating the Indian economy from the bottom up and realizing the dream of inclusive growth. Perhaps the most important benefit will be the incentive it provides for India’s rural poor to stay in their villages and take of their respective lands. Poverty is forcing millions of Indians to leave their villages and head to overcrowded cities. Not only does it tax the infrastructure in cities but it leads to neglect of the country’s cultivable land. Food security in the future will depend on how well India looks after its farmers.
However, data for the three years during which NREGA has been in operation, 2006-07, 2007-08 and 2008-09 shows that on average only 50% of the households that registered under the scheme actually got employment. Further, the average number of days each household got employment was only 45 against the promised 100. In short, at best a quarter of what was promised has been delivered. It’s a beginning but a long way from meeting the objective. 

The reality is that there is a wide variation of performance across states. In terms of the percentage of registered households provided work, Maharashtra has averaged an abysmal 13% over the three years while Rajasthan at the other end of the spectrum has averaged 73%. 

In terms of the average number of person-days of employment per household too, the variation is quite wide — from 22 in West Bengal to 79 in Rajasthan. If we take both parameters together, states like Rajasthan, Chhattisgarh and Assam are above the national average, others like Gujarat, West Bengal, Bihar, Karnataka and Kerala are below the average on both counts and most others have performed well on one of the two counts but not so well on the other. 

The average wage rate paid is now a touch over Rs 85, but again that varies from around Rs 70 per person per day in states like Gujarat and Meghalaya to double that amount in Haryana. For many states including Uttar Pradesh, therefore, the promise of Rs 100 per day will not add anything to what is available. Nevertheless, the fact that the government is willing to stipulate a minimum floor across the country rather than leaving it to minimum wage criteria in the states is a welcome development. 

However, NREGA should not be seen as just another of the plethora of poverty alleviation schemes that India has had since Independence. What the disaggregated picture shows, thus, is that there is considerable scope for improving the implementation of the scheme, more so in some states.
The rural poverty line, which is now in the region of Rs 400 per capita per day, means that an average household that is below the poverty line (BPL) will have an income of something in the range of Rs 24,000 per annum or less, assuming a five-member household. In other words, if a BPL family were to get the full promised benefit of NREGA they could earn the equivalent of more than 40% of their annual income from this one scheme alone. Thus, if NREGA realizes its full potential, it could prove to be the most definitive piece of legislation in the sphere of rural upliftment and development.
REFERENCES
HYPERLINK “http://en.wikipedia.org/wiki/National_Rural_Employment_Guarantee_Act” http://en.wikipedia.org/wiki/National_Rural_Employment_Guarantee_Act
HYPERLINK “http://india.gov.in/sectors/rural/national_rural.php” http://india.gov.in/sectors/rural/national_rural.php
HYPERLINK “http://nrega.nic.in/” http://nrega.nic.in/
HYPERLINK “http://www.congress.org.in/home-layout.php?id=55″ www.congress.org.in/home-layout.php?id=55
http://www.livemint.com/2009/06/30234413/NREGA-grapples-with-quality-co.html?pg=2
HYPERLINK “http://desicritics.org/2009/03/27/151221.php” http://desicritics.org/2009/03/27/151221.php
HYPERLINK “http://nrega.nic.in/nrega_dist.htm” http://nrega.nic.in/nrega_dist.htm
HYPERLINK “http://www.business-standard.com/india/news/govt-ropes-in-iims-iits-for-proper-implementationnrega/67671/on” http://www.business-standard.com/india/news/govt-ropes-in-iims-iits-for-proper-implementationnrega/67671/on
HYPERLINK “http://timesofindia.indiatimes.com/NEWS-Sunday-TOI-Special-Report-NREGA-is-a-promise-half-kept/articleshow/4767608.cms” http://timesofindia.indiatimes.com/NEWS-Sunday-TOI-Special-Report-NREGA-is-a-promise-half-kept/articleshow/4767608.cms
HYPERLINK “http://timesofindia.indiatimes.com/NEWS-City-Nagpur-NREGS-The-truth-is-in-the-lies/articleshow/4777994.cms” http://timesofindia.indiatimes.com/NEWS-City-Nagpur-NREGS-The-truth-is-in-the-lies/articleshow/4777994.cms
HYPERLINK “http://timesofindia.indiatimes.com/NEWS-City-Nagpur-There-is-a-flip-side-to-NREGS-hike-too/articleshow/4777998.cms” http://timesofindia.indiatimes.com/NEWS-City-Nagpur-There-is-a-flip-side-to-NREGS-hike-too/articleshow/4777998.cms
HYPERLINK “http://www.righttofoodindia.org/data/kheradreze05nregaslides.ppt” http://www.righttofoodindia.org/data/kheradreze05nregaslides.ppt

Sensex scream

An eye opener on the SENSEX SCREAM in Indian Media.
Read it and be cautious.
Edit Page article from The Hindu Business Line (06-11-07)
Stock market: Disconnected from national savings S. Gurumurthy
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The Sensex story blinds the nation; distracts it from more serious economic issues. Nothing could be sillier than measuring the wealth of a nation through an equity market index, says S.Gurumurthy, arguing that the tail cannot wag the dog.
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The Sensex surge…Sedating the nation into complacency. ‘The first 10000 took over 20 years; the next came in just 20 months. At $1.58 trillion market cap, India is No 9 in the world. Superpower 2020?’ This is how a leading financial daily editorialised its news on the Sensex touching 20K on October 29. This Sensex hyping is not the isolated endeavour of one newspaper. This is fast becoming a media, even national, obsession. It seems a collective effort is on to define the Indian economy through the Bombay Stock Exchange’s Sensitive Index.
A day’s setback in the index drives the Finance Minister to the TV screen to say things so that it goes up again. The Sensex makes money on paper for all stock market clients. Those who properly time their entry and exit into and from the market even encash it, of course with some luck. But how will the Sensex surge make India a superpower by 2020? The media claims that the Sensex has driven the nation’s wealth to over $1.5 trillion! These banner headlines do not feature just in financial dailies whose readership and the customers of Dalal Street overlap.
Even the media that normally reserves its front pages for politics, for Dr Manmohan Singh and Ms Sonia Gandhi, for Messrs L. K. Advani and Karunanidhi, Lalu Prasad and Mulayam, have now turned Sensex-sensitive. The result: The rise of the index is more attractive as media news today than the news of Shilpa Shetty’s adventures or Sanjay Dutt’s bail or jail news and the like that dominated headlines some time back.
But the shift to the Sensex as the new icon does not make the newspapers any more serious, nor the economic debate any more profound. On the contrary, the stock market index trivialises national economic debate as much as, if not more than, the other icons trivialised most national concerns of that time. Nor is the trust in Sensex as the index of India emerging as a superpower by 2020 any more credible than Shilpa’s supporters’ trust that the public kiss would promote AIDS awareness! Is this verdict too strong?

Blinds the Nation

This takes us to the role of the Sensex and that of the stock market and BSE-listed companies in the national economy. Yes, the Sensex story blinds the nation; distracts it from more serious economic issues. Worse. Nothing could be sillier than measuring the wealth of a nation through an equity market index. The market cap of the listed stocks on the BSE is today estimated by some at Rs 1.58 trillion, or over Rs 63 lakh crore. This is over 150 per cent of the national GDP at current prices!
Does this indicate national prosperity? At any rate, is it sustainable, even for a few months? Some rate hike somewhere, and it is all gone, back to square one. Just a couple of facts will demolish the myth that the Sensex or market-cap captures India’s economic prowess or prosperity.
First, only less than 3 per cent of national household savings get into the stock market. So, Dalal Street must have far less a percentage of households as clients for the stocks it offers. In contrast, more than half of the households in the US are connected to stock market. Thus, the role of New York stock exchange in the US is incomparably different from that of Dalal Street.
Most Indian savers — and they are among the top savers in the world — do not like the flavour of stocks. They were no fools because they did not oblige their Finance Minister who kept advising them for almost a year to buy stocks and not get bogged down in banks deposits.
The critical fact is that Indians seek ‘safety-first’ investment avenues. They have to protect their savings as they have to take care of their social security themselves. They cannot leave that job to Dr Manmohan Singh, nor can Dr Singh assume that responsibility. They have to provide for their old age, for their parents, for their ill health, for their children and, sometimes, even for near and dear relatives.
The US Picture
See the contrast. The US government relieves its citizens from such excruciating obligations. It has nationalised family functions into public works and thus encouraged the savers to take risks. So, they go to the New York Stock Exchange. If the Indian government too assures Indians that it will take care of their social security, as the US government does, then more Indians will perhaps indulge in the ‘intelligent gambling’ that happens on Dalal Street.
Second, it is not just that less than a 10th of the Indian families access the stock market as compared to the percentage in the US that is hooked to stocks. The role of the Sensex and the BSE-500 companies in India’s macro-economics is minimal, if not relatively negligent. The Sensex companies contribute to less than 1 per cent of the nation’s GDP and the share of the entire BSE/NSE listed companies is perhaps less than 4 per cent. Actually, the entire corporate sector, listed on the bourses and unlisted, accounts for just 14 per cent of GDP, or thereabouts.
Buoyed by foreign money
The Indian savings-to-GDP ratio has topped 32 per cent last year and is expected to go up, year on year. But with these saving largely reserved for safe investments, the risky stock market is open to domination by foreign money. So it is not Indian money that drives or sustains the BSE and the NSE. The Indian stock market is more identified with the Indian geography than with Indian savings or Indian money. When foreign money rushes in, the Sensex goes up and national wealth surges. And, when it leaves, the story is the other way round. Thus, the turbo charge for the Sensex surge today comes from nomadic global money in search of investment arbitrage all over the world.
As India is perceived as charging forward, the global surplus capital is rushing to India. Look at the anatomy of this nomadic money, part of which has no address. The investment from foreign institutional investors in the BSE stocks is put at $193 billion in June 2007. Out of this, the investment through the faceless offshore money, through the much discussed P-Notes (Participatory Notes), is about $70 billion.
The Citi group has estimated the foreign ownership of the top 500 BSE stocks at 22 per cent, up from 12 per cent six years ago. The other owners of the BSE stocks are: promoters and government 54 per cent, domestic mutual funds and insurance companies 10 per cent, and the public 10 per cent. These top 500 BSE companies account for 90 per cent of the entire Indian bourses.
If the market cap of the Indian stock market is $1.53 trillion, the top 500 of BSE-listed corporates account for over $1.35 trillion. Does that mean that the repatriable foreign ownership of the top BSE 500 is $297 billion? The cash in dollars that came in to get the right to this kind of return was perhaps less than a third of this amount. This single item can dynamite not only the stock market, but the economy itself.
Bubble in making?
In this hype, few would dare suggest that the present Sensex surge is a bubble in the offing. Yet, some have openly questioned the surge as a rally for good. One has even editorially warned of a bubble in the making. Such saner voices are the only hope against the mass Sensex hysteria.
The Finance Minister is obviously on Cloud Nine. The Sensex seems to have mesmerised even the trained economist in the Prime Minister. Persuaded by the index reaching 20K, even he has said: “Everything seems to be positive.”
The Sensex seems to have mesmerised even the trained economist in the Prime Minister. Persuaded by the index reaching 20K, even he has said: “Everything seems to be positive.”
It needs no seer to say that the Sensex surge is globally driven. No one can say how long it will last and how soon it will end. It is de-linked from national savings and investment models. It has all the characteristics of a bubble and a global one. It can be pricked at any time by a small turn in global financial flows, such as a rate hike by the US Fed.
The sooner the Indian economic debate moves away from the anchor of the Sensitive Index and the benchmark of the BSE-500, the better it is for the nation. It is sedating the nation into complacency. This is a Small India which is delegitimising the Greater India. India Inc is less than a sixth of the Indian economy. And India Inc listed on BSE is less than 4 per cent of India as an economy. Of which the Sensex accounts for just 1 per cent of India’s GDP. Sensex is just the tail and should be kept within its limits as the tail. It can wag. But it should not wag the dog. But that is precisely what is happening today, thanks to some of the best minds in the country and the media equating the rise of the Sensex with India’s ascent.
(The author is a corporate advisor. His e-mail is guru@gurumurthy.net)

Mumbai beats Manhattan

Mumbai towers over Manhattan
Rentals Have Risen Over 30% In Last Quarter
Maulik Pathak AHMEDABAD
WHEN UK-based realty consultants Knight Frank recently took on lease a huge office space in Manhattan, it contemplated a celebration. At $55 per sq ft per annum (pa) for the plush Park Lane area, the deal was not pricey at all. And no, the company was not comparing prices ruling in other areas of Manhattan, but with those in Mumbai.
The crunch for office space in prime locations of Mumbai and the hardening rupee have pushed the average rentals in the commercial business district (CBD) areas farther than those prevailing in New York. As it stands today, the average per sq ft cost in areas like Nariman Point and Bandra Kurla Complex (BKC) is about 1.5 times higher than Manhattan. There is more to it. However, when the rates for plush offices are taken into account, India’s financial city is still lagging. For Knight Frank, the leased 1 lakh sq ft of office space for $55 per sq ft per annum was much cheaper than Mumbai’s $90.
“It is much less than the prices in BKC and Nariman Point that command anywhere around $90 which is about 1.5 times higher than Manhattan,” said Knight Frank India chairman Pranay Vakil.
The weighted average rental in Manhattan is between $58 and $60, says its latest report. It all started about a year ago when Lehman
Brothers leased a property in BKC in the range of Rs 350-400 per sq ft per month (pm) ($102-117 per sq ft pa), Mr Vakil said. About 18 months ago, the cost per sq ft per annum in Mumbai’s CBD areas was not more than $30, he added. Now, there’s a three-fold increase.
Manhattan-based consultancy firm Cushman & Wakefield in its quarterly report in April said the overall average asking rents for Manhattan was $53.43 per square foot, the highest ever recorded.
Class-A offices’ asking rents increased 29% in Manhattan, also setting a record at $64.54 per square foot, it said. C&W’s research report on Mumbai office rentals said lack of Grade ‘A’ supply and increase in demand has caused the appreciation in rentals in Mumbai by 20-30% over the last quarter.
The Net Effective Occupancy Cost (NEOC -calculated on carpet area basis) for prime space in CBD ranges between Rs 420 and 460/sq ft pm ($117-128/sq ft pa).
“For top-tier buildings in NY, the rentals range between $200-250 per square foot per annum. In Mumbai, we have recently witnessed commercial leasing transactions as high as $150-160 per square foot per annum,” said Colliers International national director Kunal Kakad.
Ahmedabad, on the other hand, ranks lowest among the eight key cities of India including Pune and Bangalore when it comes to office space rentals at about $8-10 per sq ft per annum in CBD areas.
Source: The Economic Times, 14-09-07

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