MUMBAI: A turf war has broken out between the Securities and Exchange Board of India (Sebi) and the Insurance Regulatory and Development Authority (IRDA) over the regulation of unit-linked investment plans (ULIPs), which have emerged as one of the hottest investment products in recent years.
ULIPs are insurance plans that are similar to mutual funds and have been around for a decade now. The latest salvo from Sebi, the capital market watchdog, is a show-cause notice to all life insurance companies, including the biggest player Life Insurance Corporation (LIC), that sell this product. The insurers have been asked to explain why they have not taken Sebi’s approval before selling ULIPs.
Sebi’s display of authority has not gone down well with IRDA. When contacted, R Kannan, member, IRDA, said: “ULIPs are internationally sold by insurance companies and not by any other segment of financial services. They are a composite insurance product, but the investment is shown separately because the investment risk is borne by the policyholder.”
“This product is structured as per international practice and is well within Section 2(11) of the Insurance Act. We have asked for a copy of the show-cause notice and will take up the issue with the government,” he told ET. While the particular section in the Act recognises life insurers’ right to sell such products, Sebi probably feels the schemes that generate a return on investment are similar to collective investment schemes which come under its jurisdiction.
ULIP is a generic term used to describe insurance plans where the choice of asset lies with the investor. The structure is similar to that of a mutual fund. Just like in a mutual fund, ULIP money is allocated to either an equity or income or balanced fund and any gain in the value of these assets is reflected in the appreciation of the net asset value of the units. Charges towards insurance and asset management are recovered from policyholders -- a practice that mutual funds also follow.
More than 80% of new premium collected by insurance companies from policyholders is in ULIPs. The product is responsible for insurance firms emerging as dominant players in the stock market. Under the circumstances, a curb on ULIP may also impact the stock market.
The move comes less than a month after the insurance regulator wrote to Sebi explaining that apart from providing a maturity benefit, ULIPs also incorporate mortality and morbidity benefits, and, therefore, come under the purview of the insurance regulator.
It is unclear what provoked Sebi a decade after ULIPs hit the Indian market.
However, with ULIP sales picking up, there have been shrill complaints from the mutual fund industry that life insurers were selling mutual funds under the garb of protection plans. Fund houses argue that insurance companies sell ULIPs by paying hefty commissions to distributors, while they are bound by the maximum fee that can be given to brokers. Also, ULIP fund managers were turning into significant players in the equity markets with equity assets under management of the life insurance industry running into several billions.
Worldwide, there are not many instances of such regulatory dispute. One reason is that internationally most insurance companies, which mobilise funds under ULIPs, farm out the management of these funds into asset management companies that come under the purview of the markets regulator. In India, life insurers are barred from using the services of mutual fund managers, even though almost every life insurance promoter has a mutual fund within the group.
Reviving lapsed insurance policy How to go for householder's insurance Thumb rules of buying an insurance Check the price before buying an insurance Choosing right insurance (Source: 23 Jan, 2010, IST,ET Bureau )
Sunday, February 27, 2011
Saturday, February 26, 2011
CSE-2011/GENERAL STUDIES(PRELIMS)/HAND OUT #10
Pension Reforms in India:
On August 23, 2003, Government decided to introduce a new restructured defined contribution pension system for new entrants to Central Government service, except to Armed Forces, in the first stage, replacing the existing defined benefit system. Subsequently, the New Pension System (NPS) was operationalised from January 1, 2004 through a notification dated December 22, 2003. The main features of the NPS are:
It is based on defined contribution. New entrants to Central Government service contribute 10 per cent of their salary and dearness allowance (DA), which is matched by the Central Government (Tier-I).
Once the NPS architecture is fully in place, employees will have the option of a voluntary (Tier-II) withdrawable account in the absence of the facility of General Provident Fund (GPF). Government will make no contribution to this account.
Employees will normally exit the system at or after the age of 60 years. At the time of exit, it is mandatory for them to invest 40 per cent of the pension wealth to purchase an annuity to provide for lifetime pension of the employee and his dependent parents and spouse. Remaining 60 per cent of pension wealth will be paid to the employee in lump sum at the time of exit. Individuals would have the flexibility to leave the pension system prior to age 60. However, in this case, mandatory annuitisation would be 80 per cent of the pension wealth.
The new system will have a central record keeping and accounting infrastructure and several fund managers to offer investment options with varying proportions of investment in fixed-income instruments and equity.
The new system will also have a market mechanism (without any contingent liability) through which certain investment protection guarantees would be offered for the different schemes.
An interim regulator, the Pension Fund Regulatory and Development Authority (PFRDA) was constituted through a Government resolution dated October 10, 2003 as a precursor to a statutory regulator and became operational from January 1, 2004.
Empowered Committee of State Finance Ministers on Value Added Tax (VAT):
Introduction of State Level VAT is the most significant tax reform measure at State level. The State level VAT implemented has replaced the existing State Sales Tax. The decision to implement State level VAT was
taken in the meeting of the Empowered Committee (EC) of State Finance Ministers held on June 18, 2004, where a broad consensus was arrived at to introduce VAT from April 1, 2005. Accordingly, VAT has been introduced by 30 States/UTs so far. Tamil Nadu has implemented VAT from January 1, 2007. The union territory of Puducherry has communicated its decision to implement VAT from April 1, 2007. Uttar Pradesh has not yet taken any decision in this regard. Since Sales Tax/VAT is a State subject, the Central Government has played the role of a facilitator. A compensation formula has also been finalised in consultation with the States, for providing compensation, during 2005-06, 2006-07 and 2007-08, for any losses on account of introduction of VAT and compensation is being released according to this formula. Technical and financial support has also been provided to the States for VAT computerization, publicity and awareness and other related aspects.
The Empowered Committee, through its deliberations over the years, finalized a design of VAT to be adopted by the States, which seeks to retain the essential features of VAT, while at the same time, providing a measure of flexibility to the States, to enable them to meet their local requirements. Some salient features of the VAT design finalized by the Empowered Committee are as follows:
(a) The rates of VAT on various commodities shall be uniform for all the States/UTs. There are 2 basic rates of 4 per cent and 12.5 per cent, besides an exempt category and a special rate of 1 per cent for a few selected items. The items of basic necessities have been put in the zero rate bracket or the exempted schedule. Gold, silver and precious stones have been put in the 1 per cent schedule. There is also a category with 20 per cent floor rate of tax, but the commodities listed in this schedule are not eligible for input tax rebate/set off. This category covers items like motor spirit (petrol), diesel, aviation turbine fuel, and liquor.
(b) There is provision for eliminating the multiplicity of taxes. In fact, all the State taxes on purchase or sale of goods (excluding Entry Tax in lieu of Octroi) are required to be subsumed in VAT or made VATable.
(c) Provision has been made for allowing “Input Tax Credit (ITC)”, which is the basic feature of VAT. However, since the VAT being implemented is intra-State VAT only and does not cover inter-State sale transactions, ITC will not be available on inter-State purchases.
(d) Exports will be zero-rated, with credit given for all taxes on inputs/purchases related to such exports.
(e) There are provisions to make the system more business-friendly. For instance, there is provision for self-assessment by the dealers. Similarly, there is provision of a threshold limit for registration of dealers in terms of annual turnover of Rs. 5 lakh. Dealers with turnover lower than this threshold limit are not required to obtain registration under VAT and are exempt from payment of VAT. There is also provision for composition of tax liability up to annual turnover limit of Rs. 50 lakh.
(f) Regarding the industrial incentives, the States have been allowed to continue with the existing incentives, without breaking the VAT chain. However, no fresh sales tax/VAT based incentives are permitted.
VAT implementation–experience so far:
The experience of implementing VAT has been very encouraging. The new system has been received well by all the stakeholders, and the transition has been quite smooth with the Empowered Committee constantly reviewing the progress of implementation. The revenue performance of VAT-implementing States/UTs has been
very encouraging. During 2005-06, the tax revenue of the 25 VAT implementing States/ UTs registered year-on-year increase in VAT revenues of 13.8 per cent, higher than the average annual rate of growth in the last five years. In the first seven months of 2006-07 (April-October), the 30 VAT State/UTs have collectively registered revenue growth rate of 26.1 per cent over the corresponding period of the previous year. The Central Government had announced a compensation package under which the States are compensated for any revenue loss on account of VAT introduction at the rate of 100 per cent of revenue loss during 2005-06; 75 per cent during 2006-07, and 50 per cent during 2007-08. The initial Budget provision for the year 2005-06 was Rs. 5,000 crore, which was reduced to Rs. 2,500 crore at the RE stage. For the year 2006-07, a provision of Rs. 2,990 crore (BE) was initially made, and an additional provision of Rs. 1,000 crore has been made through First Supplementary. In all, 8 States requested for VAT compensation for a total amount of Rs 6,765.6 crore in 2005-06. In 2006-07 so far, claims for a total of Rs. 514.3 crore have been received from 5 States.
Recommendations of Committee on Fuller Capital Account Convertibility (Tarapore Committee II) — Development of Indian debt market
Government Bond Market:
(i) Over time, it would be preferable to progressively increase the share of mark-to-market category.
(ii) Promoting a two-way market movement would require permitting participants to freely undertake shortselling. Currently, only intra-day short-selling is permitted. This would need to be extended to shortselling across settlement cycles; this would, however, require adequate regulatory/supervisory safeguards.
(iii) To stimulate retail investments in gilts, either directly or through gilt mutual funds, the gilt funds should be exempted from the dividend distribution tax, and income up to a limit from direct investment in gilts could be exempted from tax.
(iv) In line with advanced financial markets, the introduction of Separate Trading of Registered Interest and Principal of Securities (STRIPS) in G-secs should be expedited.
(v) Expanding investor base would be strengthened by allowing, inter alia, entry to non-resident investors, especially longer term investors like foreign central banks, endowment funds, retirement funds, etc.
(vi) To impart liquidity to government stocks, the class of holders of G-secs needs to be widened and repo facility allowed to all market players without any restrictions on the minimum duration of the repo; this would, however, necessitate adequate regulatory/supervisory safeguards. This will improve the incentive for a wide range of economic agents to hold G-secs for managing their liquidity needs through repos.
(vii) A rapid debt consolidation process that is tax neutral, by exempting the gains arising from exchange of securities from all taxes, may be taken up. If necessary, a condition may be stipulated that gains arising from such an operation cannot be distributed to the shareholders.
(viii) The limit for FII investment in G-secs could be fixed at 6 per cent of total gross issuances by the Centre and States during 2006-07 and gradually raised to 8 per cent of gross issuance between 2007-08 and 2008-09, and to 10 per cent between 2009-10 and 2010-11. The limits could be linked to the gross issuance in the previous year to which the limit relates. The allocation by SEBI of the limits between 100 per cent debt funds and other FIIs should be discontinued.
Corporate Bond and Securitised Debt Market:
(i) GOI, RBI and SEBI should be able to evolve a concerted approach to deal with the complex issues identified by the High Level Committee on Corporate Bond Market.
(ii) Institutional trading and settlement arrangements need to be put in place and investors should have the freedom to join any of the trading and settlement platforms they find to be convenient.
(iii) The issuance guidelines have to be changed so as to recognize the institutional character of the market.
Since issuers may like to tap the bond market more frequently than the equity market and since subscribers are mainly institutional investors, issuance and listing mechanisms in respect of instruments being placed with institutional investors should be simplified by relying more on the assessment of a recognized rating agency rather than on voluminous and tedious disclosures as required by the public issues of equities.
(iv) Until transparent trading platforms become more popular, reliable trade reporting systems should be made mandatory. Clearing and settlement arrangements like those offered by CCIL in the case of Gsecs should be in place to ensure guaranteed settlement.
(v) Stamp duty at the time of bond issues as also on securitised debt should be abolished by all the state governments.
(vi) The FII ceiling for investments in corporate bonds of US$1.50 billion should in future be linked to fresh discontinued.
(vii) Corporate bonds may be permitted as eligible securities for repo transactions subject to strengthening of regulatory and supervisory policies.
(viii) In the case of the securitised debt market, the tax treatment of special vehicles that float the securitized debt has to be materially different. Government should provide an explicit tax pass-through treatment to securitisation Special Purpose Vehicles (SPVs) on par with tax pass-through treatment granted to SEBI registered
venture capital funds.
(ix) Securitised debt should be recognised under the Securities Contract and Regulation Act (SCRA), 1956 as tradable debt. The limitations on FIIs to invest in securities issued by Asset Reconstruction Companies should be on par with their investments in listed debt securities.
WTO negotiations and India
After the suspension in negotiations during July 2006 due to the wide gaps in the positions of WTO Members, especially on agricultural domestic support and market access, there was a soft resumption of negotiations on November 16, 2006. Subsequently there was full-scale resumption of negotiations on February 7, 2007, on the principles that it preserves the architecture of the negotiations, inclusiveness, and the progress made so far, and leads to an outcome that is balanced, ambitious and pro-development.
While safeguarding the interests of India’s low income and resource poor agricultural producers (which cannot be traded off against any gains elsewhere in the negotiations) remains paramount for India, making real gains in services negotiations where it is a demander is no less important. In the case of industrial tariffs, India’s growth and development concerns need to be addressed where India has taken a stand along with NAMA-11 coalition. These concerns are reflected in India’s position on different WTO issues for negotiations.
On August 23, 2003, Government decided to introduce a new restructured defined contribution pension system for new entrants to Central Government service, except to Armed Forces, in the first stage, replacing the existing defined benefit system. Subsequently, the New Pension System (NPS) was operationalised from January 1, 2004 through a notification dated December 22, 2003. The main features of the NPS are:
It is based on defined contribution. New entrants to Central Government service contribute 10 per cent of their salary and dearness allowance (DA), which is matched by the Central Government (Tier-I).
Once the NPS architecture is fully in place, employees will have the option of a voluntary (Tier-II) withdrawable account in the absence of the facility of General Provident Fund (GPF). Government will make no contribution to this account.
Employees will normally exit the system at or after the age of 60 years. At the time of exit, it is mandatory for them to invest 40 per cent of the pension wealth to purchase an annuity to provide for lifetime pension of the employee and his dependent parents and spouse. Remaining 60 per cent of pension wealth will be paid to the employee in lump sum at the time of exit. Individuals would have the flexibility to leave the pension system prior to age 60. However, in this case, mandatory annuitisation would be 80 per cent of the pension wealth.
The new system will have a central record keeping and accounting infrastructure and several fund managers to offer investment options with varying proportions of investment in fixed-income instruments and equity.
The new system will also have a market mechanism (without any contingent liability) through which certain investment protection guarantees would be offered for the different schemes.
An interim regulator, the Pension Fund Regulatory and Development Authority (PFRDA) was constituted through a Government resolution dated October 10, 2003 as a precursor to a statutory regulator and became operational from January 1, 2004.
Empowered Committee of State Finance Ministers on Value Added Tax (VAT):
Introduction of State Level VAT is the most significant tax reform measure at State level. The State level VAT implemented has replaced the existing State Sales Tax. The decision to implement State level VAT was
taken in the meeting of the Empowered Committee (EC) of State Finance Ministers held on June 18, 2004, where a broad consensus was arrived at to introduce VAT from April 1, 2005. Accordingly, VAT has been introduced by 30 States/UTs so far. Tamil Nadu has implemented VAT from January 1, 2007. The union territory of Puducherry has communicated its decision to implement VAT from April 1, 2007. Uttar Pradesh has not yet taken any decision in this regard. Since Sales Tax/VAT is a State subject, the Central Government has played the role of a facilitator. A compensation formula has also been finalised in consultation with the States, for providing compensation, during 2005-06, 2006-07 and 2007-08, for any losses on account of introduction of VAT and compensation is being released according to this formula. Technical and financial support has also been provided to the States for VAT computerization, publicity and awareness and other related aspects.
The Empowered Committee, through its deliberations over the years, finalized a design of VAT to be adopted by the States, which seeks to retain the essential features of VAT, while at the same time, providing a measure of flexibility to the States, to enable them to meet their local requirements. Some salient features of the VAT design finalized by the Empowered Committee are as follows:
(a) The rates of VAT on various commodities shall be uniform for all the States/UTs. There are 2 basic rates of 4 per cent and 12.5 per cent, besides an exempt category and a special rate of 1 per cent for a few selected items. The items of basic necessities have been put in the zero rate bracket or the exempted schedule. Gold, silver and precious stones have been put in the 1 per cent schedule. There is also a category with 20 per cent floor rate of tax, but the commodities listed in this schedule are not eligible for input tax rebate/set off. This category covers items like motor spirit (petrol), diesel, aviation turbine fuel, and liquor.
(b) There is provision for eliminating the multiplicity of taxes. In fact, all the State taxes on purchase or sale of goods (excluding Entry Tax in lieu of Octroi) are required to be subsumed in VAT or made VATable.
(c) Provision has been made for allowing “Input Tax Credit (ITC)”, which is the basic feature of VAT. However, since the VAT being implemented is intra-State VAT only and does not cover inter-State sale transactions, ITC will not be available on inter-State purchases.
(d) Exports will be zero-rated, with credit given for all taxes on inputs/purchases related to such exports.
(e) There are provisions to make the system more business-friendly. For instance, there is provision for self-assessment by the dealers. Similarly, there is provision of a threshold limit for registration of dealers in terms of annual turnover of Rs. 5 lakh. Dealers with turnover lower than this threshold limit are not required to obtain registration under VAT and are exempt from payment of VAT. There is also provision for composition of tax liability up to annual turnover limit of Rs. 50 lakh.
(f) Regarding the industrial incentives, the States have been allowed to continue with the existing incentives, without breaking the VAT chain. However, no fresh sales tax/VAT based incentives are permitted.
VAT implementation–experience so far:
The experience of implementing VAT has been very encouraging. The new system has been received well by all the stakeholders, and the transition has been quite smooth with the Empowered Committee constantly reviewing the progress of implementation. The revenue performance of VAT-implementing States/UTs has been
very encouraging. During 2005-06, the tax revenue of the 25 VAT implementing States/ UTs registered year-on-year increase in VAT revenues of 13.8 per cent, higher than the average annual rate of growth in the last five years. In the first seven months of 2006-07 (April-October), the 30 VAT State/UTs have collectively registered revenue growth rate of 26.1 per cent over the corresponding period of the previous year. The Central Government had announced a compensation package under which the States are compensated for any revenue loss on account of VAT introduction at the rate of 100 per cent of revenue loss during 2005-06; 75 per cent during 2006-07, and 50 per cent during 2007-08. The initial Budget provision for the year 2005-06 was Rs. 5,000 crore, which was reduced to Rs. 2,500 crore at the RE stage. For the year 2006-07, a provision of Rs. 2,990 crore (BE) was initially made, and an additional provision of Rs. 1,000 crore has been made through First Supplementary. In all, 8 States requested for VAT compensation for a total amount of Rs 6,765.6 crore in 2005-06. In 2006-07 so far, claims for a total of Rs. 514.3 crore have been received from 5 States.
Recommendations of Committee on Fuller Capital Account Convertibility (Tarapore Committee II) — Development of Indian debt market
Government Bond Market:
(i) Over time, it would be preferable to progressively increase the share of mark-to-market category.
(ii) Promoting a two-way market movement would require permitting participants to freely undertake shortselling. Currently, only intra-day short-selling is permitted. This would need to be extended to shortselling across settlement cycles; this would, however, require adequate regulatory/supervisory safeguards.
(iii) To stimulate retail investments in gilts, either directly or through gilt mutual funds, the gilt funds should be exempted from the dividend distribution tax, and income up to a limit from direct investment in gilts could be exempted from tax.
(iv) In line with advanced financial markets, the introduction of Separate Trading of Registered Interest and Principal of Securities (STRIPS) in G-secs should be expedited.
(v) Expanding investor base would be strengthened by allowing, inter alia, entry to non-resident investors, especially longer term investors like foreign central banks, endowment funds, retirement funds, etc.
(vi) To impart liquidity to government stocks, the class of holders of G-secs needs to be widened and repo facility allowed to all market players without any restrictions on the minimum duration of the repo; this would, however, necessitate adequate regulatory/supervisory safeguards. This will improve the incentive for a wide range of economic agents to hold G-secs for managing their liquidity needs through repos.
(vii) A rapid debt consolidation process that is tax neutral, by exempting the gains arising from exchange of securities from all taxes, may be taken up. If necessary, a condition may be stipulated that gains arising from such an operation cannot be distributed to the shareholders.
(viii) The limit for FII investment in G-secs could be fixed at 6 per cent of total gross issuances by the Centre and States during 2006-07 and gradually raised to 8 per cent of gross issuance between 2007-08 and 2008-09, and to 10 per cent between 2009-10 and 2010-11. The limits could be linked to the gross issuance in the previous year to which the limit relates. The allocation by SEBI of the limits between 100 per cent debt funds and other FIIs should be discontinued.
Corporate Bond and Securitised Debt Market:
(i) GOI, RBI and SEBI should be able to evolve a concerted approach to deal with the complex issues identified by the High Level Committee on Corporate Bond Market.
(ii) Institutional trading and settlement arrangements need to be put in place and investors should have the freedom to join any of the trading and settlement platforms they find to be convenient.
(iii) The issuance guidelines have to be changed so as to recognize the institutional character of the market.
Since issuers may like to tap the bond market more frequently than the equity market and since subscribers are mainly institutional investors, issuance and listing mechanisms in respect of instruments being placed with institutional investors should be simplified by relying more on the assessment of a recognized rating agency rather than on voluminous and tedious disclosures as required by the public issues of equities.
(iv) Until transparent trading platforms become more popular, reliable trade reporting systems should be made mandatory. Clearing and settlement arrangements like those offered by CCIL in the case of Gsecs should be in place to ensure guaranteed settlement.
(v) Stamp duty at the time of bond issues as also on securitised debt should be abolished by all the state governments.
(vi) The FII ceiling for investments in corporate bonds of US$1.50 billion should in future be linked to fresh discontinued.
(vii) Corporate bonds may be permitted as eligible securities for repo transactions subject to strengthening of regulatory and supervisory policies.
(viii) In the case of the securitised debt market, the tax treatment of special vehicles that float the securitized debt has to be materially different. Government should provide an explicit tax pass-through treatment to securitisation Special Purpose Vehicles (SPVs) on par with tax pass-through treatment granted to SEBI registered
venture capital funds.
(ix) Securitised debt should be recognised under the Securities Contract and Regulation Act (SCRA), 1956 as tradable debt. The limitations on FIIs to invest in securities issued by Asset Reconstruction Companies should be on par with their investments in listed debt securities.
WTO negotiations and India
After the suspension in negotiations during July 2006 due to the wide gaps in the positions of WTO Members, especially on agricultural domestic support and market access, there was a soft resumption of negotiations on November 16, 2006. Subsequently there was full-scale resumption of negotiations on February 7, 2007, on the principles that it preserves the architecture of the negotiations, inclusiveness, and the progress made so far, and leads to an outcome that is balanced, ambitious and pro-development.
While safeguarding the interests of India’s low income and resource poor agricultural producers (which cannot be traded off against any gains elsewhere in the negotiations) remains paramount for India, making real gains in services negotiations where it is a demander is no less important. In the case of industrial tariffs, India’s growth and development concerns need to be addressed where India has taken a stand along with NAMA-11 coalition. These concerns are reflected in India’s position on different WTO issues for negotiations.
Thursday, February 24, 2011
Government Acts, Schemes, Projects and Missions
ESSENTIAL COMMODITIES ACT, 1955
The Essential Commodities Act, 1955 was enacted to ensure the easy availability of essential commodities to consumers and to protect them from exploitation by unscrupulous traders. The Act provides for the regulation and control of production, distribution and pricing of commodities which are declared as essential for maintaining or increasing supplies or for securing their equitable distribution and availability at fair prices.
As per the decisions of the Conference of Chief Ministers held on 21 May 2001, a Group of Ministers and Chief Ministers had been constituted which recommended that the regulatory mechanism under the Essential Commodities Act, 1955 should be phased out. Accordingly, the restrictions like licensing requirement, stock limits and movement restrictions have been removed from almost all agricultural commodities. Wheat, pulses and edible oils, edible oilseeds and rice being exceptions, where States have been permitted to impose some temporary restrictions in order to contain price increase of these commodities.
The number of essential commodities which stood at 70 in the year 1989 has been brought down to 7 at present.
The Prevention of Black-marketing and Maintenance of Supplies of Essential Commodities Act, 1980 is being implemented by the State Governments/UT Administrations for the prevention of unethical trade practices like hoarding and black-marketing.
The Act empowers the Central and State Governments to detain persons whose activities are found to be prejudicial to the maintenance of supplies of commodities essential to the community.
CONSUMER CO-OPERATIVES
The consumer co-operative structure in the country has four tiers, with the National Co-operative Consumers Federation of India Ltd. (NCCF) at the national level.
Thirty State Co-operative Consumers Organisations are affiliated to the NCCF. At the Central/ Wholesale level, there are 800 Consumer Co-operative Stores. At the primary level, there are 21,903 primary stores. In the rural areas, there are about 44,418 village level Primary Agricultural Credit Societies and Marketing Societies undertaking the distribution of consumer goods along with their normal business. In the urban and semi-urban areas, the consumer co-operative societies are operating about 37,226 retail outlets to meet the requirements of the consumers.
The NCCF, besides undertaking distribution of consumer articles, also has a Consultancy and Promotional Cell for strengthening consumer co-operative societies engaged in the retailing activities.
The NCCF with its Head Office at New Delhi, has 34 branches/sub-branches located in various parts of the country.
FORWARD TRADING AND FORWARD MARKETS COMMISSION
Forward Markets Commission (FMC) is a statutory body set up under Forward Contracts (Regulation) Act, 1952 and functions under the administrative control of the Ministry of Consumer Affairs, Food and Public Distribution. The FMC regulates forward markets in commodities through the recognised associations, recommends to the
Government the grant / withdrawal of recognition to the associations organizing forward trading in commodities and makes recommendations for general improvement of the functioning of forward markets in the country.
At present, there are 24 exchanges including three ‘national level’ exchanges which have been recognised for conducting futures/forward trading in India and all the commodities have been permitted for trading. During the current year "Thermal Coal "and "Carbon Credit" have also been allowed to be traded on recognized Commodity Exchanges.
In order to amend Forward Contracts (Regulation) Act, 1952 (FCR Act), Forward Contracts (Regulation) Amendment Bill 2008 was introduced in Lok Sabha on 13.03.2008.
The trading volume and value have increased by manifold after the three national Exchanges were setup. National Multi-Commodity Exchange of India, Ahmedabad (NMCE), Exchange of India Ltd., Mumbai (MCX) and National Commodity and Derivative Exchange Ltd., Mumbai (NCDEX) started trading in November 2003.
'Jago grahak jago' — an Initiative towards consumer Education and Awareness
Realising the importance of consumer awareness, the Government has accorded top priority to Consumer Education, Consumer Protection and Consumer Awarenesss. The most important milestone in Consumer Movement in the country has been the enactment of the Consumer Protection Act, 1986. The Act applies to all goods and services unless specially exempted by the Central Government, in all sectors whether Private, Public or Co-operative.
Consumer Protection Act, 1986
The Act enshrines all the consumers rights which are internationally accepted. As per the Act, the consumer protection councils have been established at Central, State and District levels to promote and protect the consumer rights. They are:
Right to Safety: To be protected against the sale of goods and services which are spurious/hazardous for the life.
Right to Information: To know the quality, quantity, weight and the price of goods/services being paid for, so that one is not cheated by unfair trade practices.
Right to Choose: To be assured, wherever possible, access to a variety of goods and services at competitive prices.
Right to be Heard: To be heard and to be assured that the interest would
receive due consideration at appropriate fora.
Right to Seek Redressal: To seek legal redressal against unfair or restrictive
trade practices or exploitation.
Right to Consumer Education: To have access to consumer education.
BUREAU OF INDIAN STANDARDS
Bureau of Indian Standards (BIS) is a national standards body engaged in the preparation and implementation of standards, operation of certification schemes both for products and systems, organisation and management of testing laboratories, creating consumer awareness and maintaining close liaison with international standards bodies.
General
Bureau of Indian Standards (BIS) came into existence, through an Act of Parliament on 1 April 1987. BIS is involved in multifarious activities like Standards Formulation, Certification, Product/Schemes. Laboratory Services, International Activities, Consumer –related Activities, Promotional Activities, Training Services, Information services, Sale of Standards & Publications.
Standards formulation
As on 31 March 2008, 18424 Standards formulated by BIS, are in force. These cover important segments of economy, which help the industry in upgrading the quality of their goods and services.
Product Certification Scheme
As on 31 March 2008, 20025 certification marks licences are in operation under the Scheme, covering about 1000 different items ranging from food products to electronics.
Hallmarking
Hallmarking of Gold Jewellery started in April 2000 on voluntary basis under BIS Act 1986. It is aimed at to protect the consumer's interest and providing third party assurance to consumers on the purity of gold. Till 31 Mar 2008, 91 hallmarking centers have been recognized. Since the launch of the scheme, over 5403 gold jewelers have taken licence from BIS, a figure which stood at 186 in the year 2001-02. So far, over 381 lakh jewellery articles have been hallmarked.
Rajiv Gandhi National Quality Award
With a view to encourage manufacturers and service organizations to strive for excellence, Rajiv Gandhi National Quality Award was instituted by the Bureau in 1991. This annual award compares well with similar international awards, such as, Malcolm Baldrige National Quality Award of USA and European Quality Award.
National Institute of Training for Standardization (NITS)
To impart training to technical and management personnel BIS has established, the National Institute of Training for Standardization (NITS) at NOIDA (U.P.)
WELFARE SCHEMES
MID-DAY MEAL SCHEME
The Mid-Day Meal Scheme was launched by the Ministry of Human Resource Development (Department of Education) with effect from 15th August 1995 for the benefit of students in primary schools under Employment Assurance Scheme (EAS)/earlier Revamped Public Distribution System (RPDS) blocks (2368). The Scheme covers students (Class I-V) in the Government Primary Schools/Primary Schools aided by Government and in the Primary Schools run by local bodies. Foodgrains (wheat and rice) are supplied free of cost @ 100 gram per child per school day where cooked/processed hot meal is being served with a minimum content of 300 calories and 8-12 gm of protein each day of school for a minimum of 200 days and 3 kg per student per month for 9-11 months in a year, where foodgrains are distributed in raw form. In drought-affected areas, the mid day meal is distributed in summer vacations also.
WHEAT-BASED NUTRITION PROGRAMME
The Scheme is implemented by the Department of Women and Child Development, The foodgrains allotted under this Scheme are utilised by the States/UTs under Integrated Child Development Scheme (ICDS) for providing nutritious/energy food to children below 6 years of age and expectant/lactating women.
ANNAPURNA SCHEME
Ministry of Rural Development launched this scheme in 2000-2001. Indigent senior citizens of 65 years of age or above who though eligible for old age pension under the National Old Age Pension Scheme (NOAPS) but are not getting the pension are covered under the Scheme. 10 kg of foodgrains per person per month are supplied free of cost under the scheme. From 2002-2003, the scheme has been transferred to State Plan along with the National Social Assistance Programme comprising the National Old Age Pension Scheme and the National Family Benefit Scheme.
SAMPOORNA GRAMIN ROZGAR YOJANA (SGRY)
The Ministry of Rural Development, which is the nodal Central Ministry for the programme, launched the scheme on 25.9.2001 for all the States/UTs for organizing various employment generation programmes. Under the Scheme, 50 lakh tonnes of foodgrains are to be allotted to the States/UTs free of cost by Ministry of Rural Development.
SPECIAL COMPONENT OF SAMPOORNA GRAMIN ROZGAR YOJANA
Special Component of Sampoorna Gramin Rozgar Yojana aims at extending support to the people affected by natural calamities in States/UTs. Foodgrains are released under the special component of SGRY by the Ministry of Rural Development, being the nodal Ministry for the Scheme, after the approval of Department of Food and Public Distribution.
NUTRITIONAL PROGRAMME FOR ADOLESCENT GIRLS (NPAG)
A Pilot Project – ‘‘Nutritional Programme for Adolescent Girls" (NPAG) was launched by the Planning Commission initially for a period of two years, i.e. 2002-03 and 2003-04 in 51 identified districts. This scheme was restarted in 2005-06. Ministry of Women and Child Development administers the scheme.As per the revised guidelines of the programme, adolescent girls (age group 11-19 years) as identified by weight would be covered irrespective of financial status of the family to which they belong. Free foodgrains @ 6 kg. per beneficiary per month is provided to the adolescent girls (weight < 35 kg.) initially for a period of three months. Those beneficiaries, who cross the cut off point for weight, would not receive foodgrains any further.
EMERGENCY FEEDING PROGRAMME (EFP)
Emergency Feeding Programme is a food-based intervention targeted for old, infirm and destitute persons belonging to BPL households to provide them food security in their distress conditions. This was introduced in May 2001. The Scheme is being implemented by Government of Orissa in eight KBK (Kalahandi Bolangir Koraput) Districts covering two lakh beneficiaries. Under the scheme, foodgrains (rice) at BPL rates is being allocated to State Government by Department of Food and Public Distribution.
VILLAGE GRAIN BANKS SCHEME (VCB SCHEME)
A Centrally Sponsored Scheme of Grains Banks in Tribal villages was launched during 1996-97 by Ministry of Tribal Affairs in 11 States. Now the scheme has been transferred to Ministry of Food & Public Distribution.
The revised Village Grain Bank Scheme for establishment of Grain Banks in chronically food scarce areas was approved by Ministry of Finance on 15.2.2006. The main objective of the scheme is to provide safeguard against starvation during the period of natural calamity or during lean season.
NATIONAL FOOD FOR WORK PROGRAMME (NFFWP)
The scheme for National Food for Work Programme was launched with effect from 13.10.2004. This programme is being implemented in 150 most backward districts of the country so that the generation of supplementary wage employment and providing of food security through creation of need-based economic, social and community assets in these districts is further intensified. Most of the backward districts, which would benefit from the scheme are in the tribal belts. The scheme will provide 100 days of employment at minimum wages for at least one able-bodied person from each household in the country.
TARGETTED PUBLIC DISTRIBUTION SYSTEM (TPDS)
In order to ensure availability of minimum quantity of foodgrains to the families living below the poverty line, the Government launched the TPDS in June 1997. It was intended to benefit about six crore poor families in the country for whom a quantum of 72 lakh tonnes of foodgrains was earmarked annually at the rate of 10 kg per family per month. The allocation was increased from 10 kg to 20 kg from 1 April 2000. This was increased from 20 to 25 kg per family per month from July 2001. From 1 April 2002, 462 India 2010 this allocation was further increased from 25 to 35 kg per family per month. The Central Issue Price (CIP) for BPL families is Rs 4.15 per kg for wheat and Rs 5.65 per kg for rice.
ANTYODAYA ANNA YOJANA (AAY)
In order to make TPDS more focused and targeted towards the poorest section of population, the "Antyodaya Anna Yojana" (AAY) was launched in December, 2000 for one crore poor families. Initially AAY contemplated identification of one crore poorest of the poor families from amongst the BPL families covered under TPDS within the States and providing them foodgrains at a highly subsidised rate of Rs. 2/- per kg for wheat and Rs. 3/- per kg for rice. The States/UTs are required to bear the distribution cost, including margin to dealers and retailers as well as the transportation cost. Thus the entire food subsidy is being passed on to the consumers under the scheme. The scale of issue that was initially 25 kg per family per month has been increased to 35 kg per family per month with effect from 1st April, 2002. The AAY Scheme has been expanded in subsequent years and presently it is covering 2.5 crore households.
MANAGEMENT OF FOODGRAINS
SAVE GRAIN CAMPAIGN (SGC)
The scheme is implemented through a network of 12 SGC offices in close collaboration with the State Governments and NGOs. The main objective of the scheme is to transfer the technical know-how developed by Indian Grain Storage Management and Research Institute (IGMRI) to the farmers for minimising the post-harvest losses in foodgrains.
INDIAN GRAIN STORAGE MANAGEMENT AND RESEARCH INSTITUTE (IGMRI)
Indian Grain Storage Management and Research Institute (IGMRI), Hapur, is engaged in the training and R&D work relating to grain storage management. The Institute has three field stations at Hyderabad, Jorhat and Ludhiana.
SUGAR POLICY:
The country had achieved an all time high-level of sugar production of 281.99 lakh tones (Provisional) during the sugar season 2006-07. There were 615 installed sugar factories in the country as on 31st March 2008.
Partial control : Sugar & sugarcane are essential commodities under the Essential Commandities Act, 1955. Government has been following a policy of partial control and dual pricing for sugar. Under this policy a certain percentage of sugar produced by sugar factories is requisitioned by the Government as compulsory levy at a price
fixed by Government in every sugar season. The levy sugar so requisitioned is distributed under the Public Distribution System (PDS) The non-levy (free-sale) sugar is allowed to be sold as per the quota/quantity released by the Government under the regulated release mechanism.
Phased Decontrol of the Sugar Industry: The Government has taken steps for decontrol of the sugar industry which include reduction in the compulsory levy obligation of the sugar factories. Accordingly the levy obligation now stands reduced gradually from 40% (Prior to 01.01.2000) to 10% from 01.03.2002.
SUGARCANE PRICING POLICY
The Central Government fixes the Statutory Minimum Price (SMP) of sugarcane for each sugar season. The SMP is fixed on the basis of the recommendations of the Commission for Agricultural Costs and Prices (CACP) and after consulting the State Governments and associations of sugar industry and cane growers.
FOOD PROCESSING
Role and Objectives
The Ministry of Food Processing Industries (MFPI) was set up in July 1988 to give an impetus to development of food processing sector in the country. The Ministry is concerned with formulation and implementation of the policies & plans for the food processing industries within the overall national priorities and objectives.
Major Policy initiatives
• Food processing has been identified as industry with employment potential.
• Most of the processed food items have been exempted from the purview of licensing, except items reserved for small-scale sector and alcoholic beverages.
• To ensure easy availability of credit, Government has included food processing industries in the list of priority sector for bank lending. NABARD has created a refinancing window with a corpus of Rs. 1000 crore, especially for agroprocessing infrastructure and market development.
• Rs. 150 crore earmarked for (National Horticulture Mission) NHM for terminal markets.
• Food processing industries were included in the list of priority sector for bank lending in 1999.
• Automatic approval for foreign equity upto 100% is available for most of the processed food items except alcohol and beer and those reserved for small scale sector subject to certain conditions. 468 India 2010
Integrated Food Law
An Integrated Food Law, i.e. Food Safety and Standards Act, 2006 was notified on 24.8.200implementation of the Act.
National Institute of Food Technology Entrepreneurship & Management (NIFTEM)
The Ministry has set up a National Institute of Food technology Entrepreneurship & Management (NIFTEM) at Kundli (Haryana). The Institute will function as a knowledge centre in food processing.
Steps taken by the Government
The Government has been taking effective steps to moderate the prices and increase domestic availability of essential commodities. It has taken a number of step as listed below:-
To augment availability of wheat, Public Sector Agencies STC, MMTC, PEC imported about 18.0 lakh tonnes of wheat during 2007-08.
In order to maximize procurement of wheat and paddy, the Government has been increasing MSPs and announcing bonus in the last 5 years. The Government fixed the MSP of wheat for Crop Year 2007-08 at Rs. 1000 per quintal. The Minimum Support Price (MSP) of 'common' and 'Grade A' varieties of paddy was increased by Rs 105 per quintal, to Rs. 850 per quintal and Rs 880 a quintal respectively during the Kharif marketing Season 2008-09.
Export of non-basmati rice was banned in April 2008. Import duty on rice was cut to zero upto 31.3.2009. Government also directed that the order regarding removal of restrictions on licensing, stock limits and movement of rice be kept in abeyance for a period of one year.
Government has perotected vunerable section of society through Targeted Public Distribution System (TPDS) and Antodaya Anna Yajana (AAY). Under the TPDS, wheat, rice, sugar and kerosene oils are allocated to State Governments for distribution through the Fair Price Shops.
Customs duty on import of pulses was reduced to zero on June 8, 2006. Also withdrawn the 4% additional countervailing duty on all edible oils.
When the onion prices started flaring up, NAFED increased the MEP from USD 250 PMT in March/April 2007 to US$ 495 PMT in October 2007 to increase the domestic availability of onion. The export of onion was also put under license through designated canalizing agencies. Further more, Government also organized sale of onion through mobile centres operated by Delhi Government, NAFED), Kendriya Bhandar as well as Mother Dairy. These outlets numbering around 375, sold onion at Rs 17-18 per kg when the outside price was Rs 22-24 per kg.
Subsequently, with the domestic prices of onion showing a declining trend, MEP was successively reduced. The export restriction was also lifted w.e.f. 16.11.07 in view of the increased availability of kharif onion.
As a measure of abundant precaution, Forward Markets commission (FMC) on 23.01.07, directed the three National Exchanges, namely (a) Multi Commodity Exchange of India Ltd., (b) National Commodity & Derivatives Exchange Ltd., (c) National Multi Commodity Exchange of Inda Ltd., to delist all contracts of tur and urad and to close out all outstanding positions in all Tur and Urad contracts at the closing price on 23.01.07.
The Essential Commodities Act, 1955 was enacted to ensure the easy availability of essential commodities to consumers and to protect them from exploitation by unscrupulous traders. The Act provides for the regulation and control of production, distribution and pricing of commodities which are declared as essential for maintaining or increasing supplies or for securing their equitable distribution and availability at fair prices.
As per the decisions of the Conference of Chief Ministers held on 21 May 2001, a Group of Ministers and Chief Ministers had been constituted which recommended that the regulatory mechanism under the Essential Commodities Act, 1955 should be phased out. Accordingly, the restrictions like licensing requirement, stock limits and movement restrictions have been removed from almost all agricultural commodities. Wheat, pulses and edible oils, edible oilseeds and rice being exceptions, where States have been permitted to impose some temporary restrictions in order to contain price increase of these commodities.
The number of essential commodities which stood at 70 in the year 1989 has been brought down to 7 at present.
The Prevention of Black-marketing and Maintenance of Supplies of Essential Commodities Act, 1980 is being implemented by the State Governments/UT Administrations for the prevention of unethical trade practices like hoarding and black-marketing.
The Act empowers the Central and State Governments to detain persons whose activities are found to be prejudicial to the maintenance of supplies of commodities essential to the community.
CONSUMER CO-OPERATIVES
The consumer co-operative structure in the country has four tiers, with the National Co-operative Consumers Federation of India Ltd. (NCCF) at the national level.
Thirty State Co-operative Consumers Organisations are affiliated to the NCCF. At the Central/ Wholesale level, there are 800 Consumer Co-operative Stores. At the primary level, there are 21,903 primary stores. In the rural areas, there are about 44,418 village level Primary Agricultural Credit Societies and Marketing Societies undertaking the distribution of consumer goods along with their normal business. In the urban and semi-urban areas, the consumer co-operative societies are operating about 37,226 retail outlets to meet the requirements of the consumers.
The NCCF, besides undertaking distribution of consumer articles, also has a Consultancy and Promotional Cell for strengthening consumer co-operative societies engaged in the retailing activities.
The NCCF with its Head Office at New Delhi, has 34 branches/sub-branches located in various parts of the country.
FORWARD TRADING AND FORWARD MARKETS COMMISSION
Forward Markets Commission (FMC) is a statutory body set up under Forward Contracts (Regulation) Act, 1952 and functions under the administrative control of the Ministry of Consumer Affairs, Food and Public Distribution. The FMC regulates forward markets in commodities through the recognised associations, recommends to the
Government the grant / withdrawal of recognition to the associations organizing forward trading in commodities and makes recommendations for general improvement of the functioning of forward markets in the country.
At present, there are 24 exchanges including three ‘national level’ exchanges which have been recognised for conducting futures/forward trading in India and all the commodities have been permitted for trading. During the current year "Thermal Coal "and "Carbon Credit" have also been allowed to be traded on recognized Commodity Exchanges.
In order to amend Forward Contracts (Regulation) Act, 1952 (FCR Act), Forward Contracts (Regulation) Amendment Bill 2008 was introduced in Lok Sabha on 13.03.2008.
The trading volume and value have increased by manifold after the three national Exchanges were setup. National Multi-Commodity Exchange of India, Ahmedabad (NMCE), Exchange of India Ltd., Mumbai (MCX) and National Commodity and Derivative Exchange Ltd., Mumbai (NCDEX) started trading in November 2003.
'Jago grahak jago' — an Initiative towards consumer Education and Awareness
Realising the importance of consumer awareness, the Government has accorded top priority to Consumer Education, Consumer Protection and Consumer Awarenesss. The most important milestone in Consumer Movement in the country has been the enactment of the Consumer Protection Act, 1986. The Act applies to all goods and services unless specially exempted by the Central Government, in all sectors whether Private, Public or Co-operative.
Consumer Protection Act, 1986
The Act enshrines all the consumers rights which are internationally accepted. As per the Act, the consumer protection councils have been established at Central, State and District levels to promote and protect the consumer rights. They are:
Right to Safety: To be protected against the sale of goods and services which are spurious/hazardous for the life.
Right to Information: To know the quality, quantity, weight and the price of goods/services being paid for, so that one is not cheated by unfair trade practices.
Right to Choose: To be assured, wherever possible, access to a variety of goods and services at competitive prices.
Right to be Heard: To be heard and to be assured that the interest would
receive due consideration at appropriate fora.
Right to Seek Redressal: To seek legal redressal against unfair or restrictive
trade practices or exploitation.
Right to Consumer Education: To have access to consumer education.
BUREAU OF INDIAN STANDARDS
Bureau of Indian Standards (BIS) is a national standards body engaged in the preparation and implementation of standards, operation of certification schemes both for products and systems, organisation and management of testing laboratories, creating consumer awareness and maintaining close liaison with international standards bodies.
General
Bureau of Indian Standards (BIS) came into existence, through an Act of Parliament on 1 April 1987. BIS is involved in multifarious activities like Standards Formulation, Certification, Product/Schemes. Laboratory Services, International Activities, Consumer –related Activities, Promotional Activities, Training Services, Information services, Sale of Standards & Publications.
Standards formulation
As on 31 March 2008, 18424 Standards formulated by BIS, are in force. These cover important segments of economy, which help the industry in upgrading the quality of their goods and services.
Product Certification Scheme
As on 31 March 2008, 20025 certification marks licences are in operation under the Scheme, covering about 1000 different items ranging from food products to electronics.
Hallmarking
Hallmarking of Gold Jewellery started in April 2000 on voluntary basis under BIS Act 1986. It is aimed at to protect the consumer's interest and providing third party assurance to consumers on the purity of gold. Till 31 Mar 2008, 91 hallmarking centers have been recognized. Since the launch of the scheme, over 5403 gold jewelers have taken licence from BIS, a figure which stood at 186 in the year 2001-02. So far, over 381 lakh jewellery articles have been hallmarked.
Rajiv Gandhi National Quality Award
With a view to encourage manufacturers and service organizations to strive for excellence, Rajiv Gandhi National Quality Award was instituted by the Bureau in 1991. This annual award compares well with similar international awards, such as, Malcolm Baldrige National Quality Award of USA and European Quality Award.
National Institute of Training for Standardization (NITS)
To impart training to technical and management personnel BIS has established, the National Institute of Training for Standardization (NITS) at NOIDA (U.P.)
WELFARE SCHEMES
MID-DAY MEAL SCHEME
The Mid-Day Meal Scheme was launched by the Ministry of Human Resource Development (Department of Education) with effect from 15th August 1995 for the benefit of students in primary schools under Employment Assurance Scheme (EAS)/earlier Revamped Public Distribution System (RPDS) blocks (2368). The Scheme covers students (Class I-V) in the Government Primary Schools/Primary Schools aided by Government and in the Primary Schools run by local bodies. Foodgrains (wheat and rice) are supplied free of cost @ 100 gram per child per school day where cooked/processed hot meal is being served with a minimum content of 300 calories and 8-12 gm of protein each day of school for a minimum of 200 days and 3 kg per student per month for 9-11 months in a year, where foodgrains are distributed in raw form. In drought-affected areas, the mid day meal is distributed in summer vacations also.
WHEAT-BASED NUTRITION PROGRAMME
The Scheme is implemented by the Department of Women and Child Development, The foodgrains allotted under this Scheme are utilised by the States/UTs under Integrated Child Development Scheme (ICDS) for providing nutritious/energy food to children below 6 years of age and expectant/lactating women.
ANNAPURNA SCHEME
Ministry of Rural Development launched this scheme in 2000-2001. Indigent senior citizens of 65 years of age or above who though eligible for old age pension under the National Old Age Pension Scheme (NOAPS) but are not getting the pension are covered under the Scheme. 10 kg of foodgrains per person per month are supplied free of cost under the scheme. From 2002-2003, the scheme has been transferred to State Plan along with the National Social Assistance Programme comprising the National Old Age Pension Scheme and the National Family Benefit Scheme.
SAMPOORNA GRAMIN ROZGAR YOJANA (SGRY)
The Ministry of Rural Development, which is the nodal Central Ministry for the programme, launched the scheme on 25.9.2001 for all the States/UTs for organizing various employment generation programmes. Under the Scheme, 50 lakh tonnes of foodgrains are to be allotted to the States/UTs free of cost by Ministry of Rural Development.
SPECIAL COMPONENT OF SAMPOORNA GRAMIN ROZGAR YOJANA
Special Component of Sampoorna Gramin Rozgar Yojana aims at extending support to the people affected by natural calamities in States/UTs. Foodgrains are released under the special component of SGRY by the Ministry of Rural Development, being the nodal Ministry for the Scheme, after the approval of Department of Food and Public Distribution.
NUTRITIONAL PROGRAMME FOR ADOLESCENT GIRLS (NPAG)
A Pilot Project – ‘‘Nutritional Programme for Adolescent Girls" (NPAG) was launched by the Planning Commission initially for a period of two years, i.e. 2002-03 and 2003-04 in 51 identified districts. This scheme was restarted in 2005-06. Ministry of Women and Child Development administers the scheme.As per the revised guidelines of the programme, adolescent girls (age group 11-19 years) as identified by weight would be covered irrespective of financial status of the family to which they belong. Free foodgrains @ 6 kg. per beneficiary per month is provided to the adolescent girls (weight < 35 kg.) initially for a period of three months. Those beneficiaries, who cross the cut off point for weight, would not receive foodgrains any further.
EMERGENCY FEEDING PROGRAMME (EFP)
Emergency Feeding Programme is a food-based intervention targeted for old, infirm and destitute persons belonging to BPL households to provide them food security in their distress conditions. This was introduced in May 2001. The Scheme is being implemented by Government of Orissa in eight KBK (Kalahandi Bolangir Koraput) Districts covering two lakh beneficiaries. Under the scheme, foodgrains (rice) at BPL rates is being allocated to State Government by Department of Food and Public Distribution.
VILLAGE GRAIN BANKS SCHEME (VCB SCHEME)
A Centrally Sponsored Scheme of Grains Banks in Tribal villages was launched during 1996-97 by Ministry of Tribal Affairs in 11 States. Now the scheme has been transferred to Ministry of Food & Public Distribution.
The revised Village Grain Bank Scheme for establishment of Grain Banks in chronically food scarce areas was approved by Ministry of Finance on 15.2.2006. The main objective of the scheme is to provide safeguard against starvation during the period of natural calamity or during lean season.
NATIONAL FOOD FOR WORK PROGRAMME (NFFWP)
The scheme for National Food for Work Programme was launched with effect from 13.10.2004. This programme is being implemented in 150 most backward districts of the country so that the generation of supplementary wage employment and providing of food security through creation of need-based economic, social and community assets in these districts is further intensified. Most of the backward districts, which would benefit from the scheme are in the tribal belts. The scheme will provide 100 days of employment at minimum wages for at least one able-bodied person from each household in the country.
TARGETTED PUBLIC DISTRIBUTION SYSTEM (TPDS)
In order to ensure availability of minimum quantity of foodgrains to the families living below the poverty line, the Government launched the TPDS in June 1997. It was intended to benefit about six crore poor families in the country for whom a quantum of 72 lakh tonnes of foodgrains was earmarked annually at the rate of 10 kg per family per month. The allocation was increased from 10 kg to 20 kg from 1 April 2000. This was increased from 20 to 25 kg per family per month from July 2001. From 1 April 2002, 462 India 2010 this allocation was further increased from 25 to 35 kg per family per month. The Central Issue Price (CIP) for BPL families is Rs 4.15 per kg for wheat and Rs 5.65 per kg for rice.
ANTYODAYA ANNA YOJANA (AAY)
In order to make TPDS more focused and targeted towards the poorest section of population, the "Antyodaya Anna Yojana" (AAY) was launched in December, 2000 for one crore poor families. Initially AAY contemplated identification of one crore poorest of the poor families from amongst the BPL families covered under TPDS within the States and providing them foodgrains at a highly subsidised rate of Rs. 2/- per kg for wheat and Rs. 3/- per kg for rice. The States/UTs are required to bear the distribution cost, including margin to dealers and retailers as well as the transportation cost. Thus the entire food subsidy is being passed on to the consumers under the scheme. The scale of issue that was initially 25 kg per family per month has been increased to 35 kg per family per month with effect from 1st April, 2002. The AAY Scheme has been expanded in subsequent years and presently it is covering 2.5 crore households.
MANAGEMENT OF FOODGRAINS
SAVE GRAIN CAMPAIGN (SGC)
The scheme is implemented through a network of 12 SGC offices in close collaboration with the State Governments and NGOs. The main objective of the scheme is to transfer the technical know-how developed by Indian Grain Storage Management and Research Institute (IGMRI) to the farmers for minimising the post-harvest losses in foodgrains.
INDIAN GRAIN STORAGE MANAGEMENT AND RESEARCH INSTITUTE (IGMRI)
Indian Grain Storage Management and Research Institute (IGMRI), Hapur, is engaged in the training and R&D work relating to grain storage management. The Institute has three field stations at Hyderabad, Jorhat and Ludhiana.
SUGAR POLICY:
The country had achieved an all time high-level of sugar production of 281.99 lakh tones (Provisional) during the sugar season 2006-07. There were 615 installed sugar factories in the country as on 31st March 2008.
Partial control : Sugar & sugarcane are essential commodities under the Essential Commandities Act, 1955. Government has been following a policy of partial control and dual pricing for sugar. Under this policy a certain percentage of sugar produced by sugar factories is requisitioned by the Government as compulsory levy at a price
fixed by Government in every sugar season. The levy sugar so requisitioned is distributed under the Public Distribution System (PDS) The non-levy (free-sale) sugar is allowed to be sold as per the quota/quantity released by the Government under the regulated release mechanism.
Phased Decontrol of the Sugar Industry: The Government has taken steps for decontrol of the sugar industry which include reduction in the compulsory levy obligation of the sugar factories. Accordingly the levy obligation now stands reduced gradually from 40% (Prior to 01.01.2000) to 10% from 01.03.2002.
SUGARCANE PRICING POLICY
The Central Government fixes the Statutory Minimum Price (SMP) of sugarcane for each sugar season. The SMP is fixed on the basis of the recommendations of the Commission for Agricultural Costs and Prices (CACP) and after consulting the State Governments and associations of sugar industry and cane growers.
FOOD PROCESSING
Role and Objectives
The Ministry of Food Processing Industries (MFPI) was set up in July 1988 to give an impetus to development of food processing sector in the country. The Ministry is concerned with formulation and implementation of the policies & plans for the food processing industries within the overall national priorities and objectives.
Major Policy initiatives
• Food processing has been identified as industry with employment potential.
• Most of the processed food items have been exempted from the purview of licensing, except items reserved for small-scale sector and alcoholic beverages.
• To ensure easy availability of credit, Government has included food processing industries in the list of priority sector for bank lending. NABARD has created a refinancing window with a corpus of Rs. 1000 crore, especially for agroprocessing infrastructure and market development.
• Rs. 150 crore earmarked for (National Horticulture Mission) NHM for terminal markets.
• Food processing industries were included in the list of priority sector for bank lending in 1999.
• Automatic approval for foreign equity upto 100% is available for most of the processed food items except alcohol and beer and those reserved for small scale sector subject to certain conditions. 468 India 2010
Integrated Food Law
An Integrated Food Law, i.e. Food Safety and Standards Act, 2006 was notified on 24.8.200implementation of the Act.
National Institute of Food Technology Entrepreneurship & Management (NIFTEM)
The Ministry has set up a National Institute of Food technology Entrepreneurship & Management (NIFTEM) at Kundli (Haryana). The Institute will function as a knowledge centre in food processing.
Steps taken by the Government
The Government has been taking effective steps to moderate the prices and increase domestic availability of essential commodities. It has taken a number of step as listed below:-
To augment availability of wheat, Public Sector Agencies STC, MMTC, PEC imported about 18.0 lakh tonnes of wheat during 2007-08.
In order to maximize procurement of wheat and paddy, the Government has been increasing MSPs and announcing bonus in the last 5 years. The Government fixed the MSP of wheat for Crop Year 2007-08 at Rs. 1000 per quintal. The Minimum Support Price (MSP) of 'common' and 'Grade A' varieties of paddy was increased by Rs 105 per quintal, to Rs. 850 per quintal and Rs 880 a quintal respectively during the Kharif marketing Season 2008-09.
Export of non-basmati rice was banned in April 2008. Import duty on rice was cut to zero upto 31.3.2009. Government also directed that the order regarding removal of restrictions on licensing, stock limits and movement of rice be kept in abeyance for a period of one year.
Government has perotected vunerable section of society through Targeted Public Distribution System (TPDS) and Antodaya Anna Yajana (AAY). Under the TPDS, wheat, rice, sugar and kerosene oils are allocated to State Governments for distribution through the Fair Price Shops.
Customs duty on import of pulses was reduced to zero on June 8, 2006. Also withdrawn the 4% additional countervailing duty on all edible oils.
When the onion prices started flaring up, NAFED increased the MEP from USD 250 PMT in March/April 2007 to US$ 495 PMT in October 2007 to increase the domestic availability of onion. The export of onion was also put under license through designated canalizing agencies. Further more, Government also organized sale of onion through mobile centres operated by Delhi Government, NAFED), Kendriya Bhandar as well as Mother Dairy. These outlets numbering around 375, sold onion at Rs 17-18 per kg when the outside price was Rs 22-24 per kg.
Subsequently, with the domestic prices of onion showing a declining trend, MEP was successively reduced. The export restriction was also lifted w.e.f. 16.11.07 in view of the increased availability of kharif onion.
As a measure of abundant precaution, Forward Markets commission (FMC) on 23.01.07, directed the three National Exchanges, namely (a) Multi Commodity Exchange of India Ltd., (b) National Commodity & Derivatives Exchange Ltd., (c) National Multi Commodity Exchange of Inda Ltd., to delist all contracts of tur and urad and to close out all outstanding positions in all Tur and Urad contracts at the closing price on 23.01.07.
RBI raises alarm as Bengal goes into severe overdraft crisis
By
Ajanta Chakraborty | Times of India, 23 February, 2011
Kolkata: The Reserve Bank of India has warned the Union finance ministry that West Bengal is facing a “severe overdraft crisis” — in other words, it is going bankrupt. The state’s financial condition is so bad that it may have to dip into central funds for welfare projects if it has to pay its employees the salary for February.
Sources in the RBI say that as on February 21, Bengal has taken more than 1800 crore as loan. It has also been regularly dipping into the ways and means advances (WMAs) to meet its daily expenses. It has come to such a pass that the Buddhadeb Bhattacharjee government has been surviving on overdrafts running into hundreds of crores for the past 10 days.
Overdrafts from the RBI can be availed for a maximum of 14 days and is usually the last resort.
Punjab, which is also facing a fiscal crisis, is also in the WMA stage, but is yet to take recourse to overdrafts.
In November, the Union finance ministry had summoned Bengal chief secretary Samar Ghosh and warned him that the state’s fiscal position was “unsustainable”. This had led Governor M K Narayanan to call finance minister Asim Dasgupta for a discussion.
For around a month now, the government has not been able to clear treasury bills and has gone on negative balance. The finance minister had hiked VAT rates on luxury and nonessential items by 1% and promised to cut down on non-plan expenditure. None of these seemed to have helped.
Government sources confirmed that no payment is being released and funds allocated for areas, such as police modernization, have been stopped. The government’s only hope now are some central funds that it is withholding on the ground that the election code of conduct is about to set in and no welfare project can be launched at this hour. This includes a 600 crore grant released for drought relief. Sources say funds like these may be diverted by Writers’ to meet its daily expenses.
The liquidity crunch has been kept under wraps as the state is approaching assembly elections in about a couple of months from now.
Last year, the government had approached RBI on 12 days for normal WMAs, which help states tide over a temporary mismatch in cash flow. In 2008-09, it knocked on the RBI’s door on 39 days. For special WMAs advances from the RBI against pledged Government of India securities — the state has already approached the central bank 38 times this year. In 2008-09, it sought special WMAs on 165 days.
EMPTY COFFERS
Bengal has already taken more than 1800 crore as loan from RBI
It has also been regularly dipping into the ways and means advances (WMAs) to meet its daily expenses
For 10 days now, the govt has been surviving on overdrafts from the RBI running into hundreds of crores
RBI has raised an alarm because overdrafts can be availed for a maximum of 14 days
Ajanta Chakraborty | Times of India, 23 February, 2011
Kolkata: The Reserve Bank of India has warned the Union finance ministry that West Bengal is facing a “severe overdraft crisis” — in other words, it is going bankrupt. The state’s financial condition is so bad that it may have to dip into central funds for welfare projects if it has to pay its employees the salary for February.
Sources in the RBI say that as on February 21, Bengal has taken more than 1800 crore as loan. It has also been regularly dipping into the ways and means advances (WMAs) to meet its daily expenses. It has come to such a pass that the Buddhadeb Bhattacharjee government has been surviving on overdrafts running into hundreds of crores for the past 10 days.
Overdrafts from the RBI can be availed for a maximum of 14 days and is usually the last resort.
Punjab, which is also facing a fiscal crisis, is also in the WMA stage, but is yet to take recourse to overdrafts.
In November, the Union finance ministry had summoned Bengal chief secretary Samar Ghosh and warned him that the state’s fiscal position was “unsustainable”. This had led Governor M K Narayanan to call finance minister Asim Dasgupta for a discussion.
For around a month now, the government has not been able to clear treasury bills and has gone on negative balance. The finance minister had hiked VAT rates on luxury and nonessential items by 1% and promised to cut down on non-plan expenditure. None of these seemed to have helped.
Government sources confirmed that no payment is being released and funds allocated for areas, such as police modernization, have been stopped. The government’s only hope now are some central funds that it is withholding on the ground that the election code of conduct is about to set in and no welfare project can be launched at this hour. This includes a 600 crore grant released for drought relief. Sources say funds like these may be diverted by Writers’ to meet its daily expenses.
The liquidity crunch has been kept under wraps as the state is approaching assembly elections in about a couple of months from now.
Last year, the government had approached RBI on 12 days for normal WMAs, which help states tide over a temporary mismatch in cash flow. In 2008-09, it knocked on the RBI’s door on 39 days. For special WMAs advances from the RBI against pledged Government of India securities — the state has already approached the central bank 38 times this year. In 2008-09, it sought special WMAs on 165 days.
EMPTY COFFERS
Bengal has already taken more than 1800 crore as loan from RBI
It has also been regularly dipping into the ways and means advances (WMAs) to meet its daily expenses
For 10 days now, the govt has been surviving on overdrafts from the RBI running into hundreds of crores
RBI has raised an alarm because overdrafts can be availed for a maximum of 14 days
Tuesday, February 22, 2011
Listen to Bank: Put food first in 2011
The meeting of G-20 finance ministers in Paris over the weekend had, amid the usual platitudes on “strong sustainability, balanced growth, systemic stability”, three important takeaways — indicators that could measure and tackle the core of the global crisis: trade imbalances and exchange rates (which is at the core of all trade transactions), and finally, the need to control volatility in commodities markets. On exchange rates, while India too, like the West, has objected to China’s tight controls over the yuan, this country is also a victim of potentially destabilising capital flows. Stock markets in emerging economies, particularly India, collapse when capital flows out on negative cues in troubled or uncertain times. The communiqué released at the end of the Paris meeting rightly stresses the need to contain such volatility as it poses a major threat to global food security. It noted the need for long-term investment in agriculture in developing countries, and suggested that containment of oil price volatility should be extended to gas and coal. The need for greater investment in agriculture was echoed even more stridently by World Bank president Robert Zoellick, who warned that the world was reaching a “danger point” and that soaring food prices posed the risk of “further political instability” across the world. Urging the G-20 ministers “to put food first in 2011”, Mr Zoellick cautioned them that these soaring food prices could “lead to the fall of governments ... and societies could go
into turmoil”. If we want an illustration of what he was talking about, just look at real-time developments in Tunisia, Egypt, Bahrain, Yemen and now Libya ... these events are playing out right before our eyes. The fact that these countries are all under one kind of dictatorship or another just made matters worse there. Democracy might provide some immunity or safety valve — so that a government is not overthrown — but it may not prevent political or social turmoil taking place. The UN’s Food and Agriculture Organisation had also raised an alarm over the neglect of agriculture at the World Economic Forum in Davos earlier this year. India is among the countries which has grossly neglected agriculture, and even the money that is spent by the government on this sector mostly benefits the richer farmers with irrigated land. The vast bulk of India’s agriculturists with non-irrigated land, whose fate still depends largely on the rains, get very little.
It is estimated that neglect of agriculture costs India at least two per cent in GDP growth. The real test of whether finance minister Pranab Mukherjee has taken this warning seriously will be evident when he presents the 2011-12 Budget a week from now. (Source: Deccan Chronicle,February 21st, 2011 )
into turmoil”. If we want an illustration of what he was talking about, just look at real-time developments in Tunisia, Egypt, Bahrain, Yemen and now Libya ... these events are playing out right before our eyes. The fact that these countries are all under one kind of dictatorship or another just made matters worse there. Democracy might provide some immunity or safety valve — so that a government is not overthrown — but it may not prevent political or social turmoil taking place. The UN’s Food and Agriculture Organisation had also raised an alarm over the neglect of agriculture at the World Economic Forum in Davos earlier this year. India is among the countries which has grossly neglected agriculture, and even the money that is spent by the government on this sector mostly benefits the richer farmers with irrigated land. The vast bulk of India’s agriculturists with non-irrigated land, whose fate still depends largely on the rains, get very little.
It is estimated that neglect of agriculture costs India at least two per cent in GDP growth. The real test of whether finance minister Pranab Mukherjee has taken this warning seriously will be evident when he presents the 2011-12 Budget a week from now. (Source: Deccan Chronicle,February 21st, 2011 )
Thursday, February 17, 2011
Coping with $100-a-barrel oil
R S Pandey,
Coping with $100-a-barrel oil
Brent crude went past $100 per barrel early this month, triggered by uncertainties in the Arab world. The trend towards $100 became clear as demand rose on surer signs of global economic recovery. Further, with Opec firm on holding output level at the current level, prices are going to stay at $100 or beyond for the next year or so. This will have severe impacts .
The current account deficit will come under more pressure as the country’s oil imports are set to rise from today’s 80% to 92% in 2030 under the current policy framework . Product prices at retail level will spike if they are aligned with the market. Such a measure will be welcomed by oil marketing companies (OMCs) that are suffering due to massive under-recoveries due to price controls. The price hike will, however, hitconsumers, over two-third of whom live on less than $2 a day. Conversely, keeping prices in check through subsidy has implications for the fiscal deficit. How does one grapple with this situation, which is similar to one in 2008-09 when the average price of Indian basket was a little over $83 even though global crude prices flared to $147. The average price may stay at $83 in the current year too.
Some lessons from 2008-09 are relevant. An effort was made then to balance the interests of the stakeholders — namely, the OMCs, the central government and the consumer — though on an adhoc basis: the Centre abolished import duties on crude and cut those on petrol and diesel; ad-valorem excise duties on petrol and diesel were replaced by specific rates; product prices were raised; and the entire under-recovery of the OMCs amounting to . 1,03,000 crore was met by . 71,000-crore subsidies from the Centre (69%) and . 32,000 crore from upstream petroleum companies (31%).
The sales tax rates of state governments continue to be ad valorem. Since then, import duty has been reintroduced, specific excise duty rates on petrol and diesel raised by . 1 a litre and the price of petrol freed. The choice is difficult, but it is time for a rational and transparent formula to provide subsidies and, yet, decontrol prices. Taxes and subsidies distort prices. For instance, in Delhi, petrol price include about 46% tax and diesel about 30%. Also, diesel, kerosene oil and cooking gas are highly subsidised. The under-recovery of OMCs is estimated at . 75,000 crore in 2010-11.
Both subsidy and lifting retail prices are unsustainable. Duties on ad-valorem basis at high prices result in windfall profit for the government , while the consumer bears the brunt. Therefore, once again, import duties must be scrapped, as was done in 2008, ad-valorem sales tax replaced with specific rates corresponding to a particular level of crude price, say, $60 a barrel . State revenues will rise in line with rise in consumption , currently around 10% for petrol and 8% for diesel. Secondly, a transparent and reasonable mechanism of burden-sharing by upstream companies is required. (Source: The Economic Times, 7 Feb, 2011)
Coping with $100-a-barrel oil
Brent crude went past $100 per barrel early this month, triggered by uncertainties in the Arab world. The trend towards $100 became clear as demand rose on surer signs of global economic recovery. Further, with Opec firm on holding output level at the current level, prices are going to stay at $100 or beyond for the next year or so. This will have severe impacts .
The current account deficit will come under more pressure as the country’s oil imports are set to rise from today’s 80% to 92% in 2030 under the current policy framework . Product prices at retail level will spike if they are aligned with the market. Such a measure will be welcomed by oil marketing companies (OMCs) that are suffering due to massive under-recoveries due to price controls. The price hike will, however, hitconsumers, over two-third of whom live on less than $2 a day. Conversely, keeping prices in check through subsidy has implications for the fiscal deficit. How does one grapple with this situation, which is similar to one in 2008-09 when the average price of Indian basket was a little over $83 even though global crude prices flared to $147. The average price may stay at $83 in the current year too.
Some lessons from 2008-09 are relevant. An effort was made then to balance the interests of the stakeholders — namely, the OMCs, the central government and the consumer — though on an adhoc basis: the Centre abolished import duties on crude and cut those on petrol and diesel; ad-valorem excise duties on petrol and diesel were replaced by specific rates; product prices were raised; and the entire under-recovery of the OMCs amounting to . 1,03,000 crore was met by . 71,000-crore subsidies from the Centre (69%) and . 32,000 crore from upstream petroleum companies (31%).
The sales tax rates of state governments continue to be ad valorem. Since then, import duty has been reintroduced, specific excise duty rates on petrol and diesel raised by . 1 a litre and the price of petrol freed. The choice is difficult, but it is time for a rational and transparent formula to provide subsidies and, yet, decontrol prices. Taxes and subsidies distort prices. For instance, in Delhi, petrol price include about 46% tax and diesel about 30%. Also, diesel, kerosene oil and cooking gas are highly subsidised. The under-recovery of OMCs is estimated at . 75,000 crore in 2010-11.
Both subsidy and lifting retail prices are unsustainable. Duties on ad-valorem basis at high prices result in windfall profit for the government , while the consumer bears the brunt. Therefore, once again, import duties must be scrapped, as was done in 2008, ad-valorem sales tax replaced with specific rates corresponding to a particular level of crude price, say, $60 a barrel . State revenues will rise in line with rise in consumption , currently around 10% for petrol and 8% for diesel. Secondly, a transparent and reasonable mechanism of burden-sharing by upstream companies is required. (Source: The Economic Times, 7 Feb, 2011)
FE Editorial : Anti-poverty vs anti-poor
The Financial Express, Feb 16, 2011
The report that the government plans to provide kerosene, cooking gas and fertiliser subsidy to the poor, through direct cash transfers on a pilot basis using the expertise of the Unique Identification Authority, before the end of the current year is good news. Not only does the move signal the acceptance of the fact that the existing subsidy regime has failed but it also opens the doors to extending the cash transfer scheme to other anti-poverty programmes, including food subsidies. Success of the pilot programme will substantially increase the size of direct cash transfers to around Rs 90,000 crore, as the fertiliser subsidy in the last Budget alone was around Rs 50,000 crore while the kerosene and LPG subsides will add up another Rs 30,000 to Rs 40,000 crore. And the potential is much larger, as experts Devesh Kapur, Partha Mukhopadhyay and Arvind Subramanian have estimated that the direct transfer of total food, fertiliser and fuel subsidies, and central sector schemes—amounting to Rs 1,80,000 crore in 2007-08—to the 310 million BPL population spread across 70 million households will ensure that each family gets a monthly transfer of Rs 2,140, which is more than the poverty line income for rural households in that year. In fact, the study even noted that direct cash transfer of the food subsidies incurred on the PDS alone will ensure a monthly income of more than Rs 500 per poor household and will allow them to buy 35 kg of rice or wheat even at the then prevailing high market prices. So, a direct cash transfer scheme will finally put an end to the tragedy of the current anti-poverty schemes, where the expenditure incurred in the name of the poor alone is enough to remove income poverty.
While direct cash transfers are certainly superior to the current subsidy regime, which has far outlived its usefulness by many decades, it should be remembered that such cash transfers are no silver bullets for eradicating poverty. Experts have time and again pointed out that the success of direct cash transfers will primarily depend on the ability to push through transparent targeting criteria, building a robust delivery mechanism, and ensuring transparency about people’s entitlements. Hopefully, the UID expertise will take care of such issues. Given how the anti-poverty expenditure is far greater than what India needs to eliminate poverty, a well-designed UID-driven cash transfer scheme can be a real game-changer. Since it will affect voting patterns in a big way, it is obvious the government will put its best into it.
The report that the government plans to provide kerosene, cooking gas and fertiliser subsidy to the poor, through direct cash transfers on a pilot basis using the expertise of the Unique Identification Authority, before the end of the current year is good news. Not only does the move signal the acceptance of the fact that the existing subsidy regime has failed but it also opens the doors to extending the cash transfer scheme to other anti-poverty programmes, including food subsidies. Success of the pilot programme will substantially increase the size of direct cash transfers to around Rs 90,000 crore, as the fertiliser subsidy in the last Budget alone was around Rs 50,000 crore while the kerosene and LPG subsides will add up another Rs 30,000 to Rs 40,000 crore. And the potential is much larger, as experts Devesh Kapur, Partha Mukhopadhyay and Arvind Subramanian have estimated that the direct transfer of total food, fertiliser and fuel subsidies, and central sector schemes—amounting to Rs 1,80,000 crore in 2007-08—to the 310 million BPL population spread across 70 million households will ensure that each family gets a monthly transfer of Rs 2,140, which is more than the poverty line income for rural households in that year. In fact, the study even noted that direct cash transfer of the food subsidies incurred on the PDS alone will ensure a monthly income of more than Rs 500 per poor household and will allow them to buy 35 kg of rice or wheat even at the then prevailing high market prices. So, a direct cash transfer scheme will finally put an end to the tragedy of the current anti-poverty schemes, where the expenditure incurred in the name of the poor alone is enough to remove income poverty.
While direct cash transfers are certainly superior to the current subsidy regime, which has far outlived its usefulness by many decades, it should be remembered that such cash transfers are no silver bullets for eradicating poverty. Experts have time and again pointed out that the success of direct cash transfers will primarily depend on the ability to push through transparent targeting criteria, building a robust delivery mechanism, and ensuring transparency about people’s entitlements. Hopefully, the UID expertise will take care of such issues. Given how the anti-poverty expenditure is far greater than what India needs to eliminate poverty, a well-designed UID-driven cash transfer scheme can be a real game-changer. Since it will affect voting patterns in a big way, it is obvious the government will put its best into it.
The Tragedy of Mubarak
By Christopher Dickey, Newsweek
The night before he finally stepped down as Egypt’s president, the protesters in Tahrir Square heard Hosni Mubarak deliver his final address as their head of state. “A speech from a father to his sons and daughters,” he called it, and like many of his orations in the past, it was filled with lies, although he may have believed some of these himself. He would stay as president until September, he promised, because the country needed him for a transition to democracy. This, after three decades of autocracy. The hundreds of thousands gathered in the square wanted to hear him say only one word: “Goodbye.” Amid their screams of fury, one woman could be heard shouting into a phone, “People are sick of the soap opera!”
The protesters had reason to be weary of the president’s final, delusional public performance. But there was another long drama coming to an end that night, mostly out of public view—a personal story that helps to explain the president whose stubborn incomprehension of his “sons and daughters” dragged Egypt so close to ruin. Former U.S. ambassador to Egypt Daniel Kurtzer has called it the “tragedy” of the Mubaraks. As Kurtzer says of the Egyptian president, “He really did feel he was the only one holding the dike”—as if beyond Mubarak lay the deluge.
Mubarak’s fall is not a story like the one that unfolded in Tunisia, of a dictator and his kin trying to take their country for all it was worth. Although there have been widely reported but poorly substantiated allegations of a $40 billion to $70 billion fortune amassed by the Mubarak family, few diplomats in Egypt find those tales even remotely credible. “Compared to other kleptocracies, I don’t think the Mubaraks rank all that high,” says one Western envoy in Cairo, asking not to be named on a subject that remains highly sensitive. “There has been corruption, [but] as far as I know it’s never been personally attached to the president and Mrs. Mubarak. They don’t live an elaborate lifestyle.”
On the contrary, vanity more than venality was the problem at the top in Egypt. Despite the uprising of millions of people in Egypt’s streets, despite their ringing condemnations of secret-police tactics and torture, the Mubarak family remained convinced that everything the president had done was for the country’s own good. “We’re gone. We’re leaving,” the deeply depressed first lady, Suzanne Mubarak, told one of her confidantes as the crisis worsened last week. “We’ve done our best.”
The man at the heart of the story, the patriarch, had never imagined he would hold the presidency—and when that came true, he couldn’t imagine it ending. As commander of the Egyptian Air Force, he had been a hero of the 1973 war against Israel, so when President Anwar Sadat summoned him to the palace in 1975, he thought maybe he was going to be rewarded with a diplomatic post, but no more than that. (Friends say Suzanne told him to try to get a nice one in Europe.) Instead, Sadat named him vice president. And on Oct. 6, 1981, as Sadat and Mubarak sat side by side watching a military parade, radical Islamists opened fire, killing Sadat and making Mubarak the most powerful man in the land. Egypt was a different country in those days, one where the government’s lies to the people went unquestioned and the police routinely intimidated the public into submission. The only television was state television, and the primary contact with the outside world was via sketchy phone lines. Some international calls had to be booked days in advance. As Mubarak’s reaction to the protests made clear, he failed to understand how the country had changed in 30 years.
His partner in the family tragedy was Suzanne Mubarak, the daughter of a Welsh nurse and an Egyptian doctor, who married Hosni when he was a young Air Force flight instructor and she was only 17. By the time she was in her late 30s, when her boys were teenagers and her husband was vice president, she set about reinventing herself as a social activist in Egypt and on the international stage. “Suzanne is 10 times smarter than her husband,” says Barbara Ibrahim of the Civic Engagement Center at the American University of Cairo. “She’s got nuance, she’s got sophistication.” As Egypt’s first lady she helped to bring dozens of non governmental organizations to the country to try to improve Egyptian life. More than her husband and more than his inner circle of intelligence officers and military men, Suzanne had a sense of the world outside the palace.
But she also had ambitions within it. None too secretly, Suzanne guided the fortunes of her children and grandchildren, looking to establish a political dynasty that might endure for generations. The older son, Alaa, is a businessman who prefers soccer to the game of politics—a fact that has brought him occasional surges of popularity over the years as a big-name, big-mouthed fan of Egypt’s national team. The younger son, the handsome, aloof Gamal, was for years the apparently anointed but undeclared heir to the presidential palace. When writing about his rise, British tabloids never failed to mention the pharaohs’ ancient dynasties. Gamal himself, half-joking with friends and acquaintances even as he ritualistically denied presidential aspirations, preferred to speak of the Kennedys, the Bushes, and the Clintons.
But in the spring of 2009, the family’s plans and strategies unraveled. The turning point came with the death of a child.
As the year opened, the 80-year-old Mubarak appeared firmly in control. America had a new president, Barack Obama, but Mubarak knew about U.S. presidents. He had seen four of them come and go, every one convinced that Mubarak was the only man in Egypt who could keep the biggest population in the Arab world quiet, extremists at bay, and his Army at peace with Israel. Even after the Bush administration’s brief push to democratize the Arab world, Egypt’s seemingly eternal president looked as solid as the Sphinx.
The old man’s great joy in life—what put a smile on that stony face and kept him going—was his 12-year-old grandson, Mohamed, the first-born son of Alaa. A dark-haired, dark-eyed charmer, Mohamed often appeared with the president in official palace photographs. The cover of Hosni Mubarak’s official biography showed him seated with toddling Mohamed, about 2, standing in front of him. Another palace picture showed the well-groomed little Mohamed a few years later talking on the phone as if playing president. At soccer matches he sat at his grandfather’s side. In mid-May of 2009, the boy spent the weekend with gidu Hosni (grandfather Hosni) and grandmama Suzanne, as he had done many times before. But when Mohamed went home to his parents the next day, he started to complain of a pain in his head. And then he slipped into a coma.
Mohamed died a few days later in a Paris hospital, reportedly from a cerebral hemorrhage. The devastated Egyptian president canceled a planned trip to visit Obama in Washington and could not even bring himself to attend Mohamed’s funeral. When Obama flew to Cairo a few days later to deliver a landmark speech to the Arab and Muslim world, Mubarak did not attend. And the Egyptian people, as sentimental as any on earth, regarded their president’s heartbreak with deep sympathy. Israeli journalist Smadar Peri remembers people in Egypt’s streets clamoring to speak with reporters, wishing only to express their condolences. “We are one family, and Mubarak is everyone’s father,” they told her.
“That was a moment of glory,” a close friend of the Mubarak family recalls. “If the president had stepped down, people would have begged him to stay.” But Mubarak did not step down. Amid speculation that he was losing his grip, that he was literally dying of a broken heart, he stayed. Peri, who interviewed Mubarak a few weeks later, told me afterward that he had lost none of his mental capacity, but that the spark behind his eyes was gone. He no longer enjoyed his work or his position or his future, but he held on anyway. It was then, as much as last week, that he first failed to see a way out. He had come to believe that no one could replace him, not even Gamal.
The president’s younger son had spent nearly a decade studying the art of politics in his father’s ruling National Democratic Party ever since returning from London, where he had worked for Bank of America and then run his own company, Medinvest. He imported organizational ideas and administrative techniques from abroad, especially from Britain’s Labour Party. (“Tony Blair has taken more vacations in Egypt than God,” a friend of the family notes in passing.)
The scheme might have worked except for one thing: Gamal was not a politician. “Gamal is a nerd,” says Ziad Aly, a mobile-communications entrepreneur and an old schoolmate of the Mubarak boys from the American University in Cairo. “He was a very clever type of 4.0 student. And he continued to be clever all his life. He reads a lot. He learns a lot. And Gamal was a good investment banker. He was always at it.”
For all his technocratic brilliance, however, Gamal desperately lacks any hint of a common touch. “I think he’s sometimes misconstrued as arrogant, and I don’t think he is,” says Aly, who joined the protests against the regime in recent weeks. “But Gamal has a huge problem, which is communication. He is not charismatic; he doesn’t come across as a person who is good with people. So he was looked at as maybe well educated, maybe young, maybe a nice picture for the country—but he’s not close to us. He’s very alienated. So he cannot actually rule or lead.”
Even so, many of Egypt’s best and brightest businessmen gathered around Gamal’s standard. Some profited mightily from the association, while others set out to modernize an economy still weighed down by policies dating back to the “Arab socialism” of Gamal Abdel Nasser. Some did both, and several were brought into the government. Liberalization, privatization, and modern telecommunications began to transform the business landscape. Sales of what had been government land and the construction of hotel and condo developments created a vast and lucrative Riviera on the Red Sea that, in turn, created enormous fortunes. Foreign direct investment increased dramatically at first, and until last year the economy was growing by 6 to 7 percent. But the new money also created a new class of super-rich Egyptians. It stoked resentment among tens of millions of people living on the edge of survival, among the young and educated who still could find no jobs—and among the military and secret-police establishment that was, for all the government’s new business-friendly technocratic veneer, the real foundation of Mubarak’s regime.
Resentment grew against Gamal and his new ways of doing things. A longtime member of the younger Mubarak’s circle likens the situation to a factory run by an old man who knows how everything works and wants to keep things that way, no matter how badly the operation needs updating. The old man’s son comes home from college full of bright ideas about newfangled machines and processes, but they’re expensive and delicate and hard to maintain, and start breaking down. “That is the way the old guard around the president saw Gamal’s people,” says the businessman. “I think that’s the way the president saw them.”
A tight group of advisers around President Mubarak worked hard to limit his vision of the world. The most notorious was the longtime minister of information (of course), Safwat Sharif. The story always told about him sotto voce, whether true or not, was that he worked his way up through the security services filming people in love nests. Certainly he was known in government circles as the man who made it his business to keep dossiers full of damaging material about anyone and everyone who might be a threat to Mubarak or, indeed, to himself. “He was like J. Edgar Hoover in that way,” says one close friend of the Mubarak family, referring to the political extortions of the man who once headed the FBI. “He had the files.” Supposed crimes were prosecuted not when they occurred, or when they were discovered, but when the prosecutions would be useful to neutralize opponents or undermine critics.
Nobody wanted to go up against that inner circle, and few in the government dared. But Suzanne Mubarak sometimes tried. Moved by her conscience and an awareness of global attention, for instance, the first lady campaigned forcefully against female genital mutilation, a practice extremely common and widely accepted in Egypt. It’s not the kind of issue the men around Mubarak liked to see raised, but Suzanne “had the courage to speak out publicly and to get this criminalized,” says Barbara Ibrahim. “She chose her battles with the security regime.”
One of the most difficult battles involved Ibrahim’s own husband, academic Saad Eddin Ibrahim, who had been Suzanne Mubarak’s thesis supervisor at American University in Cairo when she went for her master’s degree in 1980. Later, when she was first lady, he wrote speeches for her at her staff’s request. But by 2000, Saad Eddin was becoming a problem for the government. Gamal had come back from London, and Saad Eddin wrote a critical piece accusing the first family of planning a dynasty—a gomlukia, as he called it, combining the Arabic words for republic and monarchy. With funding from the European Union he had also trained election observers, a move the Mubarak government decided to interpret as foreign interference in Egypt’s affairs. And then Saad Eddin, sitting with friends at the Greek Club in Cairo, told some off-color jokes about the president. Someone taped them and took them to Mubarak, apparently telling him, “This is the way your wife’s friend talks about you.” Saad Eddin spent the next three years in jail, emerging disabled because of inadequate medical care for a nerve inflammation. He now lives in exile. “I know [Suzanne Mubarak] tried at one point to intercede on Saad’s behalf,” says Barbara, “and she was told it was none of her business.”
By the spring of 2010, as the Egyptians began to look ahead to year-end parliamentary elections and a presidential election in 2011, Gamal’s star was on the wane, even among many of his business associates. One evening some of the country’s wealthier businessmen spoke of the country’s future as we sat together at a bar in Cairo’s Four Seasons Hotel. The president had just undergone gallbladder surgery at the time, and their expectation—their hope, even—was that Mubarak would be healthy enough to run again. If not, they envisioned him allowing intelligence chief Omar Suleiman to run in his place. They had no plan C. Mubarak and his family had created a power elite as lacking in imagination as they themselves had become.
Millions of other Egyptians suffer from no such handicap, and they want a country that works differently. When steel tycoon and ruling-party boss Ahmed Ezz eliminated almost all opposition candidates in the wildly fraudulent parliamentary elections at the end of last year, the public’s anger mounted. And in mid-January, when Tunisians brought down their country’s dictator, Egyptians began their own unprecedented push to do likewise.
As a weakened Mubarak leaned more on his Army to save him, the generals’ first targets were the “businessmen” in the cabinet. Gamal’s allies were forced out. Several were threatened with prosecution. The old guard had won its first victory. Then the president himself stood down. The old guard was in charge again. The fact will register on ordinary Egyptians soon enough. Another soap opera—or another tragedy—may begin. But this one won’t be called The Mubaraks.
(Source: The NEWSWEEK Magazine)
Christopher Dickey is also the author most recently of Securing the City: Inside America's Best Counterterror Force—The NYPD, chosen by The New York Times as a notable book of 2009.
The night before he finally stepped down as Egypt’s president, the protesters in Tahrir Square heard Hosni Mubarak deliver his final address as their head of state. “A speech from a father to his sons and daughters,” he called it, and like many of his orations in the past, it was filled with lies, although he may have believed some of these himself. He would stay as president until September, he promised, because the country needed him for a transition to democracy. This, after three decades of autocracy. The hundreds of thousands gathered in the square wanted to hear him say only one word: “Goodbye.” Amid their screams of fury, one woman could be heard shouting into a phone, “People are sick of the soap opera!”
The protesters had reason to be weary of the president’s final, delusional public performance. But there was another long drama coming to an end that night, mostly out of public view—a personal story that helps to explain the president whose stubborn incomprehension of his “sons and daughters” dragged Egypt so close to ruin. Former U.S. ambassador to Egypt Daniel Kurtzer has called it the “tragedy” of the Mubaraks. As Kurtzer says of the Egyptian president, “He really did feel he was the only one holding the dike”—as if beyond Mubarak lay the deluge.
Mubarak’s fall is not a story like the one that unfolded in Tunisia, of a dictator and his kin trying to take their country for all it was worth. Although there have been widely reported but poorly substantiated allegations of a $40 billion to $70 billion fortune amassed by the Mubarak family, few diplomats in Egypt find those tales even remotely credible. “Compared to other kleptocracies, I don’t think the Mubaraks rank all that high,” says one Western envoy in Cairo, asking not to be named on a subject that remains highly sensitive. “There has been corruption, [but] as far as I know it’s never been personally attached to the president and Mrs. Mubarak. They don’t live an elaborate lifestyle.”
On the contrary, vanity more than venality was the problem at the top in Egypt. Despite the uprising of millions of people in Egypt’s streets, despite their ringing condemnations of secret-police tactics and torture, the Mubarak family remained convinced that everything the president had done was for the country’s own good. “We’re gone. We’re leaving,” the deeply depressed first lady, Suzanne Mubarak, told one of her confidantes as the crisis worsened last week. “We’ve done our best.”
The man at the heart of the story, the patriarch, had never imagined he would hold the presidency—and when that came true, he couldn’t imagine it ending. As commander of the Egyptian Air Force, he had been a hero of the 1973 war against Israel, so when President Anwar Sadat summoned him to the palace in 1975, he thought maybe he was going to be rewarded with a diplomatic post, but no more than that. (Friends say Suzanne told him to try to get a nice one in Europe.) Instead, Sadat named him vice president. And on Oct. 6, 1981, as Sadat and Mubarak sat side by side watching a military parade, radical Islamists opened fire, killing Sadat and making Mubarak the most powerful man in the land. Egypt was a different country in those days, one where the government’s lies to the people went unquestioned and the police routinely intimidated the public into submission. The only television was state television, and the primary contact with the outside world was via sketchy phone lines. Some international calls had to be booked days in advance. As Mubarak’s reaction to the protests made clear, he failed to understand how the country had changed in 30 years.
His partner in the family tragedy was Suzanne Mubarak, the daughter of a Welsh nurse and an Egyptian doctor, who married Hosni when he was a young Air Force flight instructor and she was only 17. By the time she was in her late 30s, when her boys were teenagers and her husband was vice president, she set about reinventing herself as a social activist in Egypt and on the international stage. “Suzanne is 10 times smarter than her husband,” says Barbara Ibrahim of the Civic Engagement Center at the American University of Cairo. “She’s got nuance, she’s got sophistication.” As Egypt’s first lady she helped to bring dozens of non governmental organizations to the country to try to improve Egyptian life. More than her husband and more than his inner circle of intelligence officers and military men, Suzanne had a sense of the world outside the palace.
But she also had ambitions within it. None too secretly, Suzanne guided the fortunes of her children and grandchildren, looking to establish a political dynasty that might endure for generations. The older son, Alaa, is a businessman who prefers soccer to the game of politics—a fact that has brought him occasional surges of popularity over the years as a big-name, big-mouthed fan of Egypt’s national team. The younger son, the handsome, aloof Gamal, was for years the apparently anointed but undeclared heir to the presidential palace. When writing about his rise, British tabloids never failed to mention the pharaohs’ ancient dynasties. Gamal himself, half-joking with friends and acquaintances even as he ritualistically denied presidential aspirations, preferred to speak of the Kennedys, the Bushes, and the Clintons.
But in the spring of 2009, the family’s plans and strategies unraveled. The turning point came with the death of a child.
As the year opened, the 80-year-old Mubarak appeared firmly in control. America had a new president, Barack Obama, but Mubarak knew about U.S. presidents. He had seen four of them come and go, every one convinced that Mubarak was the only man in Egypt who could keep the biggest population in the Arab world quiet, extremists at bay, and his Army at peace with Israel. Even after the Bush administration’s brief push to democratize the Arab world, Egypt’s seemingly eternal president looked as solid as the Sphinx.
The old man’s great joy in life—what put a smile on that stony face and kept him going—was his 12-year-old grandson, Mohamed, the first-born son of Alaa. A dark-haired, dark-eyed charmer, Mohamed often appeared with the president in official palace photographs. The cover of Hosni Mubarak’s official biography showed him seated with toddling Mohamed, about 2, standing in front of him. Another palace picture showed the well-groomed little Mohamed a few years later talking on the phone as if playing president. At soccer matches he sat at his grandfather’s side. In mid-May of 2009, the boy spent the weekend with gidu Hosni (grandfather Hosni) and grandmama Suzanne, as he had done many times before. But when Mohamed went home to his parents the next day, he started to complain of a pain in his head. And then he slipped into a coma.
Mohamed died a few days later in a Paris hospital, reportedly from a cerebral hemorrhage. The devastated Egyptian president canceled a planned trip to visit Obama in Washington and could not even bring himself to attend Mohamed’s funeral. When Obama flew to Cairo a few days later to deliver a landmark speech to the Arab and Muslim world, Mubarak did not attend. And the Egyptian people, as sentimental as any on earth, regarded their president’s heartbreak with deep sympathy. Israeli journalist Smadar Peri remembers people in Egypt’s streets clamoring to speak with reporters, wishing only to express their condolences. “We are one family, and Mubarak is everyone’s father,” they told her.
“That was a moment of glory,” a close friend of the Mubarak family recalls. “If the president had stepped down, people would have begged him to stay.” But Mubarak did not step down. Amid speculation that he was losing his grip, that he was literally dying of a broken heart, he stayed. Peri, who interviewed Mubarak a few weeks later, told me afterward that he had lost none of his mental capacity, but that the spark behind his eyes was gone. He no longer enjoyed his work or his position or his future, but he held on anyway. It was then, as much as last week, that he first failed to see a way out. He had come to believe that no one could replace him, not even Gamal.
The president’s younger son had spent nearly a decade studying the art of politics in his father’s ruling National Democratic Party ever since returning from London, where he had worked for Bank of America and then run his own company, Medinvest. He imported organizational ideas and administrative techniques from abroad, especially from Britain’s Labour Party. (“Tony Blair has taken more vacations in Egypt than God,” a friend of the family notes in passing.)
The scheme might have worked except for one thing: Gamal was not a politician. “Gamal is a nerd,” says Ziad Aly, a mobile-communications entrepreneur and an old schoolmate of the Mubarak boys from the American University in Cairo. “He was a very clever type of 4.0 student. And he continued to be clever all his life. He reads a lot. He learns a lot. And Gamal was a good investment banker. He was always at it.”
For all his technocratic brilliance, however, Gamal desperately lacks any hint of a common touch. “I think he’s sometimes misconstrued as arrogant, and I don’t think he is,” says Aly, who joined the protests against the regime in recent weeks. “But Gamal has a huge problem, which is communication. He is not charismatic; he doesn’t come across as a person who is good with people. So he was looked at as maybe well educated, maybe young, maybe a nice picture for the country—but he’s not close to us. He’s very alienated. So he cannot actually rule or lead.”
Even so, many of Egypt’s best and brightest businessmen gathered around Gamal’s standard. Some profited mightily from the association, while others set out to modernize an economy still weighed down by policies dating back to the “Arab socialism” of Gamal Abdel Nasser. Some did both, and several were brought into the government. Liberalization, privatization, and modern telecommunications began to transform the business landscape. Sales of what had been government land and the construction of hotel and condo developments created a vast and lucrative Riviera on the Red Sea that, in turn, created enormous fortunes. Foreign direct investment increased dramatically at first, and until last year the economy was growing by 6 to 7 percent. But the new money also created a new class of super-rich Egyptians. It stoked resentment among tens of millions of people living on the edge of survival, among the young and educated who still could find no jobs—and among the military and secret-police establishment that was, for all the government’s new business-friendly technocratic veneer, the real foundation of Mubarak’s regime.
Resentment grew against Gamal and his new ways of doing things. A longtime member of the younger Mubarak’s circle likens the situation to a factory run by an old man who knows how everything works and wants to keep things that way, no matter how badly the operation needs updating. The old man’s son comes home from college full of bright ideas about newfangled machines and processes, but they’re expensive and delicate and hard to maintain, and start breaking down. “That is the way the old guard around the president saw Gamal’s people,” says the businessman. “I think that’s the way the president saw them.”
A tight group of advisers around President Mubarak worked hard to limit his vision of the world. The most notorious was the longtime minister of information (of course), Safwat Sharif. The story always told about him sotto voce, whether true or not, was that he worked his way up through the security services filming people in love nests. Certainly he was known in government circles as the man who made it his business to keep dossiers full of damaging material about anyone and everyone who might be a threat to Mubarak or, indeed, to himself. “He was like J. Edgar Hoover in that way,” says one close friend of the Mubarak family, referring to the political extortions of the man who once headed the FBI. “He had the files.” Supposed crimes were prosecuted not when they occurred, or when they were discovered, but when the prosecutions would be useful to neutralize opponents or undermine critics.
Nobody wanted to go up against that inner circle, and few in the government dared. But Suzanne Mubarak sometimes tried. Moved by her conscience and an awareness of global attention, for instance, the first lady campaigned forcefully against female genital mutilation, a practice extremely common and widely accepted in Egypt. It’s not the kind of issue the men around Mubarak liked to see raised, but Suzanne “had the courage to speak out publicly and to get this criminalized,” says Barbara Ibrahim. “She chose her battles with the security regime.”
One of the most difficult battles involved Ibrahim’s own husband, academic Saad Eddin Ibrahim, who had been Suzanne Mubarak’s thesis supervisor at American University in Cairo when she went for her master’s degree in 1980. Later, when she was first lady, he wrote speeches for her at her staff’s request. But by 2000, Saad Eddin was becoming a problem for the government. Gamal had come back from London, and Saad Eddin wrote a critical piece accusing the first family of planning a dynasty—a gomlukia, as he called it, combining the Arabic words for republic and monarchy. With funding from the European Union he had also trained election observers, a move the Mubarak government decided to interpret as foreign interference in Egypt’s affairs. And then Saad Eddin, sitting with friends at the Greek Club in Cairo, told some off-color jokes about the president. Someone taped them and took them to Mubarak, apparently telling him, “This is the way your wife’s friend talks about you.” Saad Eddin spent the next three years in jail, emerging disabled because of inadequate medical care for a nerve inflammation. He now lives in exile. “I know [Suzanne Mubarak] tried at one point to intercede on Saad’s behalf,” says Barbara, “and she was told it was none of her business.”
By the spring of 2010, as the Egyptians began to look ahead to year-end parliamentary elections and a presidential election in 2011, Gamal’s star was on the wane, even among many of his business associates. One evening some of the country’s wealthier businessmen spoke of the country’s future as we sat together at a bar in Cairo’s Four Seasons Hotel. The president had just undergone gallbladder surgery at the time, and their expectation—their hope, even—was that Mubarak would be healthy enough to run again. If not, they envisioned him allowing intelligence chief Omar Suleiman to run in his place. They had no plan C. Mubarak and his family had created a power elite as lacking in imagination as they themselves had become.
Millions of other Egyptians suffer from no such handicap, and they want a country that works differently. When steel tycoon and ruling-party boss Ahmed Ezz eliminated almost all opposition candidates in the wildly fraudulent parliamentary elections at the end of last year, the public’s anger mounted. And in mid-January, when Tunisians brought down their country’s dictator, Egyptians began their own unprecedented push to do likewise.
As a weakened Mubarak leaned more on his Army to save him, the generals’ first targets were the “businessmen” in the cabinet. Gamal’s allies were forced out. Several were threatened with prosecution. The old guard had won its first victory. Then the president himself stood down. The old guard was in charge again. The fact will register on ordinary Egyptians soon enough. Another soap opera—or another tragedy—may begin. But this one won’t be called The Mubaraks.
(Source: The NEWSWEEK Magazine)
Christopher Dickey is also the author most recently of Securing the City: Inside America's Best Counterterror Force—The NYPD, chosen by The New York Times as a notable book of 2009.
Two Lectures delivered today at CII-Suresh Neotia Centre of Excellence for Leadership, Saltlake
First on Health and Family Welfare in India (Handout No.7), 11AM-12.30PM
Second on Public Enterprises in India (Handout No.8), 12.30 PM-2PM
Contact the Institute for your copy.
Second on Public Enterprises in India (Handout No.8), 12.30 PM-2PM
Contact the Institute for your copy.
PUBLIC SECTOR ENTERPRISES IN INDIA
PUBLIC SECTOR ENTERPRISES IN INDIA (Handout No.8)
Prior to Independence, there were few ‘Public Sector’ Enterprises in the country. These included the Railways, the Posts and Telegraphs, the Port Trusts, the Ordinance Factories, All India Radio, few enterprises like the Government Salt Factories, Quinine Factories, etc. which were departmentally managed.
Independent India adopted planned economic development policies and drew up a roadmap for the development of Public Sector as an instrument for self-reliant economic growth. The 1948 Industrial Policy Resolution envisaged development of core sectors through the public enterprises. Public Sector would correct the regional imbalances and create employment.
Industrial policy of 1991 has seen a sea change with most Central Government industrial controls being liquidated.
The Central Public Sector Enterprises (CPSEs) were classified into ‘strategic’ and ‘non-strategic’. Strategic CPSEs were identified in the area of (a) Arms & Ammunition and the allied items of defence equipments, Defence air-crafts and warships; (b) Atomic Energy (except in the areas related to the operation of nuclear power and applications of radiation and radio-isotopes to agriculture, medicine and non-strategic industries); and (c) Railway transport.
All other CPSEs were considered as non-strategic. Further, Industrial licensing by the Central Government has been almost abolished except for a few hazardous and environmentally sensitive industries.
There were 242 Central Public Sector Enterprises (CPSEs) under the administrative control of various Ministries/ Departments as on 31.3.2008.
The cumulative investment (paid-up capital plus long terms loans) in all the CPSEs stood at Rs. 4,55,409 crore as on 31.3.2008.
The largest share in this investment belonged to the service sector (40.40 per cent) followed by electricity (27.95 per cent), manufacturing (22.23 per cent), mining sector (8.83 per cent) and agriculture (0.04 per cent). The remaining 0.55 per cent belonged to CPSEs under construction.
While ‘investment’ in all the CPSEs grew by 8.31per cent in 2007-08 over 2006-07, “capital employed” in all the CPSEs went up by 15.63 per cent during the same period. A great deal of investment in CPSEs is being made through internal resources rather than through investment from outside.
The net profit of profit making CPSEs (160) stood at Rs. 91,083 crore in 2007-08.
The net loss of loss making enterprises (53) on the other hand, stood at Rs. 11,274 crore ; this includes accounting losses of closed units like the Fertilizers Corporation of India (Rs.1,504 crore) and Hindustan Fertilizers Corporation (Rs.1,102 crore).
The Food Corporation of India (FCI) and Artificial Limbs Manufacturing Corporation of India (ALIMCO) etc. are CPSEs that have been laying greater emphasis on non-financial /social objectives.
The CPSEs earned foreign exchange amounting to Rs. 74,283 crore during 2007-08. The total foreign exchange outgo (Rs. 3,68,196 crore) clearly exceeded the foreign exchange earnings.
The total number of employees in all CPSEs came down to 15.35 lakh (excluding casual and contract labour) as on March 31, 2009 compared to 15.66 lakh as on March 31, 2008.
The average per capita emolumentsin CPSEs stood at about Rs 5,45,500 per annum.
As many as 44 CPSEs are listed on the stock exchanges of India. Market capitalization of all listed CPSEs as a percentage of market capitalization of BSE was 18.35 per cent as on March 31, 2007.
The concept of Navratna and Mini-Ratna was introduced with greater delegated authority, both financial and managerial. Government has realized that ‘Navratnas’, ‘Mini-ratnas’ and other CPSEs are required to grow and deliver on the promises they have made to their stakeholders. Other reforms have also been announced, such as professionalisation of the Boards of Directors of public sector enterprises and evaluation of performance of CPSEs through Memorandum of Understanding (MOU).
In July 1997, the Government had identified 9 Central Public Sector Enterprises as Navratnas. These enterprises had comparative advantage and potential to emerge as global giants. The Navratna PSEs at present are BHEL, BPCL, GAIL, HPCL, IOC, MTNL, NTPC, ONGC and SAIL.
These PSEs have been given enhanced autonomy and delegation of powers to incur capital expenditure, to enter into technology joint ventures/strategic alliances, to effect organisational restructuring, to create and wind up below Board level posts, to raise capital from domestic and international market, to establish financial joint ventures and to wholly owned subsidiaries, etc.
In October 1997, the Government had also decided to grant enhanced autonomy and delegation of financial powers to some other profit making companies subject to certain eligibility conditions and guidelines to make them efficient and competitive.
These companies, called Miniratnas, are in two categories, namely, Category-I and Category-II. The criteria for conferring the Miniratna status are : (i) PSE should be profit making for the last 3 years continuously and should have positive net worth, (ii) it should not have defaulted in repayment of loans/interest payment on loans due to Government, (iii) it should not depend upon budgetary support or Government guarantee (Government guarantee required under the standard stipulations of external donor agencies will not affect the Miniratna status); and (iv) restructuring of the Board of Directors by inducting non-official Directors. PSEs which have made pre-tax profit of Rs. 30 crore or more in at least one of the 3 years are given Category I status while others are given Category II status. The administrative Ministries are empowered to declare a PSE as a Miniratna if it fulfils the eligibility conditions.
The Government has been delegating enhanced financial and operational powers to the Navratna, Miniratna and other profit-making CPSEs. There are 18 Navratna enterprises. Six more CPSEs, namely the Airport Authority of India Limited, Ennore Port Ltd, Tehri Hydro Development Corporation, Security Printing and Minting Corporation Ltd, Satluj Jal Vidut Nigam Ltd and Indian Railway Catering and Tourism Corporation Ltd. were granted Miniratna status during the year, raising the total number of Miniratna CPSEs to 62.
The enhanced powers delegated to the Boards of Miniratna PSEs included power to incur capital expenditure, to establish joint ventures and subsidiaries in India, to enter into technology joint ventures/strategic alliances and obtain technology and know-how by purchase or other arrangements. The exercise of these powers is subject to various conditions and guidelines laid down for this purpose including restructuring of the Board of Directors by inducting non-official Directors.
Besides endeavouring to professionalize the Boards of Directors of these enterprises, the Government has issued guidelines on corporate governance of CPSEs. The Board for Reconstruction of Public Sector Enterprises (BRPSE), established to advise the Government, inter alia, on revival/restructuring of sick and loss-making CPSEs, made recommendations on 58 cases until December 31, 2009. The Government has approved proposals for the revival of 37 CPSEs and closure of two. The total assistance approved in this regard up to March 31, 2009 was Rs 15,275 crore, which comprised Rs 2,935 crore as cash assistance and Rs 12,340 crore as non-cash assistance.
The following observations are made regarding the performance of CPSEs during the last 10 years:-
The capital employed has increased from Rs. 2,49,855 Crores in 1997-98 to Rs.6,65,124 Crores in 2006-07 recording a growth of 266%.
Number of loss incurring CPSEs, it has come down from 100 in 1997-98 to 59 in 2006-07.
Turnover increased to Rs.9,64,410 Crores in 2006-07, from Rs. 2,76,002 Crores in 1997-98 recording a net worth growth of 349% increased from Rs. 1,34,443 Crores to Rs.4,52,995 Crores in 2006-07 recording a growth of 337%.
The turnover is equal to Rs.9,64,410 Crores in 2006-07, which is an increase of 349% in comparison to 1997-98 (Rs. 2,76,002 Crores ). As regards Net worth, it has increased by 337% in 2006-07 in comparison to 1997-98 (Rs. 1,34,443 Crores), and is presently at Rs.4,52,995 Crores.
Net profit has increased by 599% in 2006-07 in comparison to 1997-98 (Rs. 13582 Crores), and is currently to the tune of Rs. 81550 Crores.
Performance of CPSEs during 2007-08 (Rs. in crore)
Particulars 2007-08 2006-07 Change %
Investment (long term loan + equity) 455409 420476 8.3
Capital employed (net fixed assets + working capital ) 763127 659959 15.6
Total turnover 1081925 964896 12.1
Profit of Profit Making CPSEs 91083 89578 1.7
Loss of Loss Making CPSEs 11274 8457 33.3
Net worth 518417 452753 14.5
Dividend declared 28081 26819 4.7
Contribution to Central Exchequer 165994 148789 11.6
Foreign Exchange Earnings 74283 70906 4.8
a) Oil companies 47203 43777 7.8
b) Other companies 27080 27129 0.2
Foreign Exchange Outgo 368196 316161 16.5
a) Oil companies 278992 241736 15.4
b) Other companies 89204 74425 19.9
List of Navratna and Miniratna CPSEs
Navratna CPSEs (as on November, 2009)
1. Bharat Electronics Limited
2. Bharat Heavy Electricals Limited
3. Bharat Petroleum Corporation Limited
4. Coal India Limited
5. GAIL (India) Limited
6. Hindustan Aeronautics Limited
7. Hindustan Petroleum Corporation Limited
8. Indian Oil Corporation Limited
9. Mahanagar Telephone Nigam Limited
10. National Aluminium Company Limited
11. NMDC Limited
12. NTPC Limited
13. Oil & Natural Gas Corporation Limited
14. Power Finance Corporation Limited
15. Power Grid Corporation of India Limited
16. Rural Electrification Corporation Limited
17. Shipping Corporation of India Limited
18. Steel Authority of India Limited
Miniratna Category - I CPSEs
1. Airports Authority of India
2. Balmer Lawrie & Co. Limited
3. Bharat Dynamics Limited
4. BEML Limited
5. Bharat Sanchar Nigam Limited
6. Bongaigaon Refineries & Petrochemicals Limited
7. Central Warehousing Corporation
8. Central Coalfields Limited
9. Chennai Petroleum Corporation Limited
10. Cochin Shipyard Limited
11. Container Corporation of India Limited
12. Dredging Corporation of India Limited
13. Engineers India Limited
14. Ennore Ports Limited
15. Garden Reach Shipbuilders & Engineers Limited
16. Goa Shipyard Limited
17. Hindustan Copper Limited
18. Hindustan Latex Limited
19. Hindustan Newsprint Limited
20. Hindustan Paper Corporation Limited
21. Housing & Urban Development Corporation Limited
22. India Tourism Development Corporation Limited
23. Indian Railway Catering & Tourism Corporation Limited
24. IRCON International Limited
25. Kudremukh Iron Ore Company Limited
26. Mazagaon Docks Limited
27. Mahanadi Coalfields Limited
28. Manganese Ore India Limited
29. Mangalore Refinery & Petrochemicals Limited
30. Mishra Dhatu Nigam Limited
31. MMTC Limited
32. MSTC Limited
33. National Fertilizers Limited
34. Neyveli Lignite Corporation
35. NHPC Limited
36. Northern Coalfields Limited
37. Numaligarh Refinery Limited
38. Oil India Limited
39. Rashtriya Chemicals & Fertilizers Limited
40. Rashtriya Ispat Nigam Limited
41. RITES Limited
42. Satluj Jal Vidyut Nigam Limited
43. Security Printing and Minting Corporation of India Limited
44. South Eastern Coalfields Limited
45. State Trading Corporation of India Limited
46. Tehri Hydro Development Corporation Limited
47. Telecommunications Consultants (India) Limited
48. Western Coalfields Limited
Miniratna Category-II CPSEs
49. Broadcast Engineering Consultants (I) Limited
50. Central Mine Planning & Design Institute Limited
51. Educational Consultants (I) Limited
52. Engineering Projects (I) Limited
53. Ferro Scrap Nigam Limited
54. HMT (International) Limited
55. HSCC (India) Limited
56. India Trade Promotion Organization
57. Indian Medicines Pharmaceuticals Corporation Limited
58. M E C O N Limited
59. National Film Development Corporation Limited
60. P E C Limited
61. Rajasthan Electronics & Instruments Limited
62. Water & Power Consultancy (India) Limited
Prior to Independence, there were few ‘Public Sector’ Enterprises in the country. These included the Railways, the Posts and Telegraphs, the Port Trusts, the Ordinance Factories, All India Radio, few enterprises like the Government Salt Factories, Quinine Factories, etc. which were departmentally managed.
Independent India adopted planned economic development policies and drew up a roadmap for the development of Public Sector as an instrument for self-reliant economic growth. The 1948 Industrial Policy Resolution envisaged development of core sectors through the public enterprises. Public Sector would correct the regional imbalances and create employment.
Industrial policy of 1991 has seen a sea change with most Central Government industrial controls being liquidated.
The Central Public Sector Enterprises (CPSEs) were classified into ‘strategic’ and ‘non-strategic’. Strategic CPSEs were identified in the area of (a) Arms & Ammunition and the allied items of defence equipments, Defence air-crafts and warships; (b) Atomic Energy (except in the areas related to the operation of nuclear power and applications of radiation and radio-isotopes to agriculture, medicine and non-strategic industries); and (c) Railway transport.
All other CPSEs were considered as non-strategic. Further, Industrial licensing by the Central Government has been almost abolished except for a few hazardous and environmentally sensitive industries.
There were 242 Central Public Sector Enterprises (CPSEs) under the administrative control of various Ministries/ Departments as on 31.3.2008.
The cumulative investment (paid-up capital plus long terms loans) in all the CPSEs stood at Rs. 4,55,409 crore as on 31.3.2008.
The largest share in this investment belonged to the service sector (40.40 per cent) followed by electricity (27.95 per cent), manufacturing (22.23 per cent), mining sector (8.83 per cent) and agriculture (0.04 per cent). The remaining 0.55 per cent belonged to CPSEs under construction.
While ‘investment’ in all the CPSEs grew by 8.31per cent in 2007-08 over 2006-07, “capital employed” in all the CPSEs went up by 15.63 per cent during the same period. A great deal of investment in CPSEs is being made through internal resources rather than through investment from outside.
The net profit of profit making CPSEs (160) stood at Rs. 91,083 crore in 2007-08.
The net loss of loss making enterprises (53) on the other hand, stood at Rs. 11,274 crore ; this includes accounting losses of closed units like the Fertilizers Corporation of India (Rs.1,504 crore) and Hindustan Fertilizers Corporation (Rs.1,102 crore).
The Food Corporation of India (FCI) and Artificial Limbs Manufacturing Corporation of India (ALIMCO) etc. are CPSEs that have been laying greater emphasis on non-financial /social objectives.
The CPSEs earned foreign exchange amounting to Rs. 74,283 crore during 2007-08. The total foreign exchange outgo (Rs. 3,68,196 crore) clearly exceeded the foreign exchange earnings.
The total number of employees in all CPSEs came down to 15.35 lakh (excluding casual and contract labour) as on March 31, 2009 compared to 15.66 lakh as on March 31, 2008.
The average per capita emolumentsin CPSEs stood at about Rs 5,45,500 per annum.
As many as 44 CPSEs are listed on the stock exchanges of India. Market capitalization of all listed CPSEs as a percentage of market capitalization of BSE was 18.35 per cent as on March 31, 2007.
The concept of Navratna and Mini-Ratna was introduced with greater delegated authority, both financial and managerial. Government has realized that ‘Navratnas’, ‘Mini-ratnas’ and other CPSEs are required to grow and deliver on the promises they have made to their stakeholders. Other reforms have also been announced, such as professionalisation of the Boards of Directors of public sector enterprises and evaluation of performance of CPSEs through Memorandum of Understanding (MOU).
In July 1997, the Government had identified 9 Central Public Sector Enterprises as Navratnas. These enterprises had comparative advantage and potential to emerge as global giants. The Navratna PSEs at present are BHEL, BPCL, GAIL, HPCL, IOC, MTNL, NTPC, ONGC and SAIL.
These PSEs have been given enhanced autonomy and delegation of powers to incur capital expenditure, to enter into technology joint ventures/strategic alliances, to effect organisational restructuring, to create and wind up below Board level posts, to raise capital from domestic and international market, to establish financial joint ventures and to wholly owned subsidiaries, etc.
In October 1997, the Government had also decided to grant enhanced autonomy and delegation of financial powers to some other profit making companies subject to certain eligibility conditions and guidelines to make them efficient and competitive.
These companies, called Miniratnas, are in two categories, namely, Category-I and Category-II. The criteria for conferring the Miniratna status are : (i) PSE should be profit making for the last 3 years continuously and should have positive net worth, (ii) it should not have defaulted in repayment of loans/interest payment on loans due to Government, (iii) it should not depend upon budgetary support or Government guarantee (Government guarantee required under the standard stipulations of external donor agencies will not affect the Miniratna status); and (iv) restructuring of the Board of Directors by inducting non-official Directors. PSEs which have made pre-tax profit of Rs. 30 crore or more in at least one of the 3 years are given Category I status while others are given Category II status. The administrative Ministries are empowered to declare a PSE as a Miniratna if it fulfils the eligibility conditions.
The Government has been delegating enhanced financial and operational powers to the Navratna, Miniratna and other profit-making CPSEs. There are 18 Navratna enterprises. Six more CPSEs, namely the Airport Authority of India Limited, Ennore Port Ltd, Tehri Hydro Development Corporation, Security Printing and Minting Corporation Ltd, Satluj Jal Vidut Nigam Ltd and Indian Railway Catering and Tourism Corporation Ltd. were granted Miniratna status during the year, raising the total number of Miniratna CPSEs to 62.
The enhanced powers delegated to the Boards of Miniratna PSEs included power to incur capital expenditure, to establish joint ventures and subsidiaries in India, to enter into technology joint ventures/strategic alliances and obtain technology and know-how by purchase or other arrangements. The exercise of these powers is subject to various conditions and guidelines laid down for this purpose including restructuring of the Board of Directors by inducting non-official Directors.
Besides endeavouring to professionalize the Boards of Directors of these enterprises, the Government has issued guidelines on corporate governance of CPSEs. The Board for Reconstruction of Public Sector Enterprises (BRPSE), established to advise the Government, inter alia, on revival/restructuring of sick and loss-making CPSEs, made recommendations on 58 cases until December 31, 2009. The Government has approved proposals for the revival of 37 CPSEs and closure of two. The total assistance approved in this regard up to March 31, 2009 was Rs 15,275 crore, which comprised Rs 2,935 crore as cash assistance and Rs 12,340 crore as non-cash assistance.
The following observations are made regarding the performance of CPSEs during the last 10 years:-
The capital employed has increased from Rs. 2,49,855 Crores in 1997-98 to Rs.6,65,124 Crores in 2006-07 recording a growth of 266%.
Number of loss incurring CPSEs, it has come down from 100 in 1997-98 to 59 in 2006-07.
Turnover increased to Rs.9,64,410 Crores in 2006-07, from Rs. 2,76,002 Crores in 1997-98 recording a net worth growth of 349% increased from Rs. 1,34,443 Crores to Rs.4,52,995 Crores in 2006-07 recording a growth of 337%.
The turnover is equal to Rs.9,64,410 Crores in 2006-07, which is an increase of 349% in comparison to 1997-98 (Rs. 2,76,002 Crores ). As regards Net worth, it has increased by 337% in 2006-07 in comparison to 1997-98 (Rs. 1,34,443 Crores), and is presently at Rs.4,52,995 Crores.
Net profit has increased by 599% in 2006-07 in comparison to 1997-98 (Rs. 13582 Crores), and is currently to the tune of Rs. 81550 Crores.
Performance of CPSEs during 2007-08 (Rs. in crore)
Particulars 2007-08 2006-07 Change %
Investment (long term loan + equity) 455409 420476 8.3
Capital employed (net fixed assets + working capital ) 763127 659959 15.6
Total turnover 1081925 964896 12.1
Profit of Profit Making CPSEs 91083 89578 1.7
Loss of Loss Making CPSEs 11274 8457 33.3
Net worth 518417 452753 14.5
Dividend declared 28081 26819 4.7
Contribution to Central Exchequer 165994 148789 11.6
Foreign Exchange Earnings 74283 70906 4.8
a) Oil companies 47203 43777 7.8
b) Other companies 27080 27129 0.2
Foreign Exchange Outgo 368196 316161 16.5
a) Oil companies 278992 241736 15.4
b) Other companies 89204 74425 19.9
List of Navratna and Miniratna CPSEs
Navratna CPSEs (as on November, 2009)
1. Bharat Electronics Limited
2. Bharat Heavy Electricals Limited
3. Bharat Petroleum Corporation Limited
4. Coal India Limited
5. GAIL (India) Limited
6. Hindustan Aeronautics Limited
7. Hindustan Petroleum Corporation Limited
8. Indian Oil Corporation Limited
9. Mahanagar Telephone Nigam Limited
10. National Aluminium Company Limited
11. NMDC Limited
12. NTPC Limited
13. Oil & Natural Gas Corporation Limited
14. Power Finance Corporation Limited
15. Power Grid Corporation of India Limited
16. Rural Electrification Corporation Limited
17. Shipping Corporation of India Limited
18. Steel Authority of India Limited
Miniratna Category - I CPSEs
1. Airports Authority of India
2. Balmer Lawrie & Co. Limited
3. Bharat Dynamics Limited
4. BEML Limited
5. Bharat Sanchar Nigam Limited
6. Bongaigaon Refineries & Petrochemicals Limited
7. Central Warehousing Corporation
8. Central Coalfields Limited
9. Chennai Petroleum Corporation Limited
10. Cochin Shipyard Limited
11. Container Corporation of India Limited
12. Dredging Corporation of India Limited
13. Engineers India Limited
14. Ennore Ports Limited
15. Garden Reach Shipbuilders & Engineers Limited
16. Goa Shipyard Limited
17. Hindustan Copper Limited
18. Hindustan Latex Limited
19. Hindustan Newsprint Limited
20. Hindustan Paper Corporation Limited
21. Housing & Urban Development Corporation Limited
22. India Tourism Development Corporation Limited
23. Indian Railway Catering & Tourism Corporation Limited
24. IRCON International Limited
25. Kudremukh Iron Ore Company Limited
26. Mazagaon Docks Limited
27. Mahanadi Coalfields Limited
28. Manganese Ore India Limited
29. Mangalore Refinery & Petrochemicals Limited
30. Mishra Dhatu Nigam Limited
31. MMTC Limited
32. MSTC Limited
33. National Fertilizers Limited
34. Neyveli Lignite Corporation
35. NHPC Limited
36. Northern Coalfields Limited
37. Numaligarh Refinery Limited
38. Oil India Limited
39. Rashtriya Chemicals & Fertilizers Limited
40. Rashtriya Ispat Nigam Limited
41. RITES Limited
42. Satluj Jal Vidyut Nigam Limited
43. Security Printing and Minting Corporation of India Limited
44. South Eastern Coalfields Limited
45. State Trading Corporation of India Limited
46. Tehri Hydro Development Corporation Limited
47. Telecommunications Consultants (India) Limited
48. Western Coalfields Limited
Miniratna Category-II CPSEs
49. Broadcast Engineering Consultants (I) Limited
50. Central Mine Planning & Design Institute Limited
51. Educational Consultants (I) Limited
52. Engineering Projects (I) Limited
53. Ferro Scrap Nigam Limited
54. HMT (International) Limited
55. HSCC (India) Limited
56. India Trade Promotion Organization
57. Indian Medicines Pharmaceuticals Corporation Limited
58. M E C O N Limited
59. National Film Development Corporation Limited
60. P E C Limited
61. Rajasthan Electronics & Instruments Limited
62. Water & Power Consultancy (India) Limited
Indian bureaucracy ranked worst in Asia: Survey
SINGAPORE: Singapore's civil servants are the most efficient among their Asian peers, a business survey on 12 economies released on Wednesday showed, but they tend to clam up unhelpfully when things go wrong.
India's "suffocating bureaucracy" was ranked the least-efficient by the survey, which said working with the country's civil servants was a "slow and painful" process.
"They are a power centre in their own right at both the national and state levels, and are extremely resistant to reform that affects them or the way they go about their duties," the report said.
Singapore was ranked first for a third time in a poll of 1,274 expatriates working in 12 North and South Asian nations on the efficiency of bureaucrats in those countries. The poll was last held in 2007.
"During normal times, when the system is not stress-tested, it operates very well," Hong Kong-based Political & Economic Risk Consultancy said in a 12-page report of Singapore's bureaucracy.
"However, during difficult times - or when mistakes are made that reflect badly on the system - there is a tendency among bureaucrats to circle the wagons in ways that lack transparency and make accountability difficult," the report said.
Thailand, despite four years of on-off street protests and a year of dysfunctional government was ranked third.
"For all the country's troubles -- or perhaps because of them -- respondents to our survey were impressed with the way Thai civil servants have been carrying out their duties," PERC said.
It said state offices associated with corruption presented the most difficulties for Thai citizens and foreigners.
PERC managing director Bob Broadfoot told Reuters that the controversy around huge investment losses by Singapore sovereign wealth fund Temasek was a good example of how things could become less transparent in the island-state.
The Singapore government has come under fire from lawmakers and its citizens over several investment losses, particular its exit from Bank of America which resulted in a loss of over $3 billion, according to Reuters calculation.
The survey ranked Hong Kong second. China, which has been campaigning to fight corruption in its bureaucracy and improve efficiency in the civil service, was ranked 9th in the 2009 poll, two places down from 2007.
Ranking by most efficient to least efficient economies: Singapore, Hong Kong, Thailand, South Korea, Japan, Malaysia, Taiwan, Vietnam, China, Philippines, Indonesia and India. (Source: REUTERS, Jun 3, 2009, 04.25pm IST)
India's "suffocating bureaucracy" was ranked the least-efficient by the survey, which said working with the country's civil servants was a "slow and painful" process.
"They are a power centre in their own right at both the national and state levels, and are extremely resistant to reform that affects them or the way they go about their duties," the report said.
Singapore was ranked first for a third time in a poll of 1,274 expatriates working in 12 North and South Asian nations on the efficiency of bureaucrats in those countries. The poll was last held in 2007.
"During normal times, when the system is not stress-tested, it operates very well," Hong Kong-based Political & Economic Risk Consultancy said in a 12-page report of Singapore's bureaucracy.
"However, during difficult times - or when mistakes are made that reflect badly on the system - there is a tendency among bureaucrats to circle the wagons in ways that lack transparency and make accountability difficult," the report said.
Thailand, despite four years of on-off street protests and a year of dysfunctional government was ranked third.
"For all the country's troubles -- or perhaps because of them -- respondents to our survey were impressed with the way Thai civil servants have been carrying out their duties," PERC said.
It said state offices associated with corruption presented the most difficulties for Thai citizens and foreigners.
PERC managing director Bob Broadfoot told Reuters that the controversy around huge investment losses by Singapore sovereign wealth fund Temasek was a good example of how things could become less transparent in the island-state.
The Singapore government has come under fire from lawmakers and its citizens over several investment losses, particular its exit from Bank of America which resulted in a loss of over $3 billion, according to Reuters calculation.
The survey ranked Hong Kong second. China, which has been campaigning to fight corruption in its bureaucracy and improve efficiency in the civil service, was ranked 9th in the 2009 poll, two places down from 2007.
Ranking by most efficient to least efficient economies: Singapore, Hong Kong, Thailand, South Korea, Japan, Malaysia, Taiwan, Vietnam, China, Philippines, Indonesia and India. (Source: REUTERS, Jun 3, 2009, 04.25pm IST)
Wednesday, February 16, 2011
Health and Family Welfare in India:Incorporating the Mid-term Appraisal of Eleventh Five Year Plan
CSE-2011/GENERAL STUDIES(PRELIMS)/PROF. S.M/HAND OUT #7
Health: Eleventh Plan Vision
Health as a right for all citizens is the goal that the Plan will strive towards.
A comprehensive approach that encompasses individual health care, public health, sanitation, clean drinking water, access to food, and knowledge of hygiene, and feeding practices.
To transform public health care into an accountable, accessible, and affordable system of quality services.
Convergence and development of public health systems and services that are responsive to the health needs and aspirations of the people.
Public provisioning of quality health care to enable access to affordable and reliable heath services, especially in the context of preventing the non-poor from entering into poverty or in terms of reducing the suffering of those who are already below the poverty line.
Reducing disparities in health across regions and communities by ensuring access to affordable health care.
Good governance, transparency, and accountability in the delivery of health services that is ensured through involvement of Panchayati Raj Institutions (PRI)s, community, and civil society groups.
Health: Eleventh Plan Goals
To raise public spending on health from 0.9 per cent of GDP to 2-3 per cent of GDP, with improved arrangement for community financing and risk pooling.
To undertake architectural correction of the health system to enable it to effectively handle increased allocations and promote policies that strengthen public health management and service delivery in the country.
Reduction in child and maternal mortality.
Universal access to public services for food and nutrition, sanitation and hygiene.
Universal access to public health care services, integrated comprehensive primary health care, with emphasis on services addressing women’s and children’s health and universal immunization.
Prevention and control of communicable and non-communicable diseases, including locally endemic diseases.
Population stabilization, gender and demographic balance.
Revitalize local health traditions and mainstream AYUSH.
Promotion of healthy lifestyles.
Health: Eleventh Plan Objectives
Reducing Maternal Mortality Ratio (MMR) to 1 per 1,000 live births.
Reducing Infant Mortality Rate (IMR) to 28 per 1,000 live births.
Reducing Total Fertility Rate (TFR) to 2.1.
Providing clean drinking water for all by 2009 and ensuring no slip-backs.
Reducing malnutrition among children in the age group 0–3 year to half its present level.
Reducing anaemia among women and girls by 50 per cent.
Raising the sex ratio in the age group 0–6 years to 935 by 2011–12, and to 950 by 2016–17.
Malaria Mortality Reduction Rate: 50 per cent up to 2010, additional 10 per cent by 2012.
Kala Azar Mortality Reduction Rate: 100 per cent by 2010 and sustaining elimination until 2012.
Filaria / Microfilaria Reduction Rate: 70 per cent by 2010, 80 per cent by 2012 and elimination by 2015.
Dengue Mortality Reduction Rate: 50 per cent by 2010 and sustaining at that level until 2012.
Cataract operations: Increase to 46 lakhs by 2012.
Leprosy Prevalence Rate: Reduce from 1.8 per 10,000 in 2005 to less that 1 per 10,000 thereafter.
Tuberculosis DOTS series: Maintain 85 per cent cure rate through entire mission period and also sustain planned case detection rate.
In terms of systems improvements the NRHM targets were:
Upgrade all PHCs into 24x7 PHCs by the year 2010.
Upgrading all Community Health Centres to Indian Public Health Standards.
Increase utilization of first referral units from bed occupancy by referred cases of less than 20 per cent to over 75 per cent.
Engaging 4,00,000 female Accredited Social Health Activists (ASHAs).
Maternal Mortality Ratio (MMR)
To reach the MMR target of 100 by 2012, the required rate of decline from 254 (SRS 2004-06) has to be, on an average, 22 per year. Unfortunately, no data are available on the progress of MMR during the Eleventh Plan period i.e. the period beginning 2007-08. However, earlier data shows that MMR came down from 301 (SRS 2001-03) to 254 (SRS 2004-06), i.e., an average decline of 16 per year. Achieving the Eleventh Plan target clearly requires much faster progress. State wise decline during the pre-Eleventh Plan period varied from an average of 26 per year for Uttar Pradesh/Uttarakhand, 20 per year for Bihar/Jharkhand, 19 per year for Rajasthan, 18 per year for Orissa/ West Bengal to 15 per year for Madhya Pradesh/Chhattisgarh.
When 52.2 per cent of the deliveries are conducted at home (DLHS-3, 2007-8) and comprehensive obstetric care continues to be a problem in many States, the scope for expanding timely access to quality institutional care is limited, particularly for those living in remote and inaccessible areas. In such a scenario, the MMR goal of 100 is achievable only through appropriate area specific interventions.
Infant Mortality Rate (IMR)
Although IMR is showing a downward trend, but the rate of improvement here too has to be three times that in the past so as to attain the level expected by the end of Eleventh Plan. All India IMR was 57 in 2006 and 53 in 2008 (SRS), a decrease of 4 in two years. High focus States of NRHM have shown marginally better performance in rural areas, where IMR has decreased by 5 in two years. Tamil Nadu has also shown marginally better performance, a decline of 6 in two years. To achieve IMR of 28 by 2012, the required rate of decrease has to be an average of 6 per year. Intensive and urgent efforts are required to adopt homebased newborn care based on validated models such as the Gadchiroli model and make focused efforts for encouraging breast feeding and safe infant and child feeding practices. While emphasis on early breast feeding is part of ASHAs training, special training on neonatal care for community and facility level health functionaries will facilitate a faster reduction in IMR.
HOME BASED NEWBORN CARE (HBNC)
Efforts to improve home based care have proven successful at improving child survival. Home Based Newborn and Child Care is to be provided by a trained Community Health Worker (such as the ASHA) who guides and supports the mother, family, and TBA in the care of newborn, and attends the newborn at home if she is sick. The worker is supervised by a field person (ANM/LHV or a doctor) who visits the community once in 15 days. Community acceptance and coverage of such care has been quite good.
The GoI approved the implementation of HBNC based on the Gadchiroli model, where appreciable decline in IMR has been documented on the basis of work done by a VO called SEARCH. Gadchiroli has shown how ordinary women can do extraordinary things: a well-trained local woman can not only lower neonatal mortality but can also bring about attitudinal change. The women Shishu Rakshaks of Gadchiroli have managed to dispel many myths surrounding pregnancy and have been able to ensure better nutrition, care, immunization, and hygiene.
The national strategy during the Plan will be to introduce and make available high-quality HBNC services in all districts/areas with an IMR more than 45 per 1000 live births. Apart from performance incentive to ASHAs, an award will be given to ASHAs and village community if no mother–newborn or child death is reported in a year.
National Rural Health Mission
• NRHM was launched on April 12, 2005, to provide accessible, affordable and accountable quality health services to the poorest households in the remotest rural regions. Allocation has been increased to Rs. 12,070 crore in interim budget for 2009-10 compared to Rs. 12,050 crore in 2008-09. NRHM is being operationalized throughout the country, with special focus on 18 states which includes 8 Empowered Action Group States (Bihar, Jharkhand, Madhya Pradesh, Chhattisgarh, Uttar Pradesh, Uttarakhand, Orissa and Rajasthan), 8 NE states, Himachal Pradesh and Jammu & Kashmir.
• The main aim of NRHM is to provide accessible, affordable, accountable, effective and reliable primary health care facilities, especially, to the poor and vulnerable sections of the population. It also aims at bridging the gap in rural health care services through the creation of a cadre of Accredited Social Health Activists (ASHA) and improved hospital care, decentralization of programme to district level to improve intra and inter-sectoral convergence and effective utilization of resources. NRHM further aims to provide overarching umbrella to the existing programmes of health and family welfare including RCH-II, malaria, blindness, iodine deficiency, filaria, kala-azar, tuberculosis, leprosy and for integrated disease surveillance. Further, it addresses the issue of health in the context of sector-wide approach towards sanitation and hygiene, nutrition and safe drinking water as basic determinants of good health in order to have greater convergence among the related social sector departments i.e. AYUSH, Women & Child Development, Sanitation, Elementary Education, Panchayati Raj and Rural Development. The mission further seeks to buildgreater ownership of the programme among the community through involvement of Panchayati Raj Institutions, NGOs and other stakeholders at national, state, district and sub-district levels to achieve the goals of National Population Policy 2000 and National Health Policy. The expected outcomes of the mission include reduction of IMR to below 30/1000 live births, MMR to below 100/100,000 live births & TFR to 2.1 by 2012.
Performance of NRHM:
7.49 lakh Accredited Social Health Activists (ASHAs) have been selected though the total number of those who have completed all training modules is low. Against the target of 6 lakh fully trained ASHAs by 2008 there are 5.19 lakh ASHAs positioned with drug kits, but their training is still to be completed. Only about 1.99 lakh ASHAs have completed all five modules and 5.65 lakh have completed up to fourth training module.
4.51 lakh Village Health and Sanitation Committees (VHSCs) have been set up against the target of 6 lakh VHSCs by 2008. The operational effectiveness of the VHSCs, however, needs considerable improvement.
40,426 Sub-centres (SCs) have been provided two ANMs against the target of 1.05 lakh SCs by 2009. 8,745 SCs are without even a single ANM.
8,324 Primary Health Centres (PHCs) are functional on 24X7 basis and 5,907of them have three Staff Nurses against the target of 18,000 PHCs by 2009.
3,966 Community Health Centres (CHCs) are functional on 24X7 basis. However, information regarding the target of strengthening 3250 CHCs with seven specialists and nine staff nurses by 2009 is not available. In any case, the number of CHCs/Sub-Divisional Hospitals or equivalent, which have been upgraded to First Referral Unit (FRU) has increased from 750 (as on 31 March 2005) to 1934 (as on 31 December 2009).
510 out of total 578 District Hospitals (DHs) have been strengthened to act as FRUs.
29,223 Rogi Kalyan Samitis (RKSs)/Hospital Development Committees have been constituted at PHC/CHC/DH levels against the target of 37,100 RKSs by 2009.
State & District Societies are in place except at the State level in West Bengal. District Programme Managers and District Accounts Managers are in position in 581 and 579 districts respectively.
356 Districts have operational Mobile Medical Units (MMUs) against the target of 600 MMUs by 2009 (one for each district). In addition, boat clinics in Assam & West Bengal, emergency transport system in Andhra Pradesh, Gujarat, Karnataka, Goa, Uttarakhand, Assam and Rajasthan, GPS enabled MMUs in Gujarat, Haryana and Tamil Nadu are operational.
Human Resources for Health
Measures have been taken during the Eleventh Five Year Plan period to solve the problem of shortage of basic education infrastructure and human resources:.
Ensure availability of medical professionals in rural areas on a permanent basis, posting of doctors with adequate monetary as well as non-monetary incentives, such as suitable accommodation, class I status, preferential school admissions for children of doctors living in remote areas, transfer or posting of choice after a stipulated length of stay and training opportunities.
States to expand the pool of medical practitioners including a cadre of Licentiate Medical Practitioners and practitioners of Indian Systems of Medicine and Homeopathy (AYUSH).
•Increase age of retirement of doctors (all Central and State Government including Defence, Railways, etc.) to 62 years. States will be encouraged to retain public health doctors on contract basis for further period of three years till the age of 65 years, especially in the notified hardship areas.
• A series of one-year duration Certificate Courses for MBBS graduates will be launched in deficit disciplines like public health, anaesthesia, psychiatry, geriatric care, and oncology. The private sector will also be encouraged to participate
Qualitative Feedback of NRHM: Voices from the Field
Accredited Social Health Activists (ASHAs)
The appointment of locally recruited women as Accredited Social Health Activists (ASHAs) who would link potential beneficiaries with the health service system is an important element of the NRHM. The good part is that
7.49 lakh ASHAs have been appointed; but several issues still need to be resolved. Not only is there a lack of transparency in the selection, ASHAs are often inadequately trained. Besides, their only focus seems to be on facilitating institutional deliveries. The ASHA who accompanies the expectant mother faces considerable hardship because she has nowhere to stay for the duration of confinement as institutional accommodation facilities are non-existent. They also often experience long delays in payment of incentives.
Village Health and Nutrition Day (VHND)
An important activity of NRHM, Village Health and Nutrition Day is to promote regular community-oriented health and nutrition activities. The event is held on a fixed day every month to sensitise the community and is popularly known as ‘Tika Karan Divas’. However, implementation is ad-hoc in most villages of the high focus States. Surveys revealed that only a few pockets in some States like Tamil Nadu, Andhra Pradesh, West Bengal and Assam were aware of VHND. The other drawback of the programme was that it often restricted itself to immunisation and antenatal check up are done on the day. There is no nutrition education. To have the desired impact, VHNDs need to be implemented with the full intended content of activities and with regularity. This can be achieved through more active involvement of NGOs and community based organizations.
Janani Suraksha Yojana (JSY)
Launched to promote institutional deliveries, JSY provides cash incentive to expectant mothers who opt for institutional delivery. Poor women from the remote districts in Bihar, Orissa and other States are reported to be visiting institutions to avail JSY benefits. However, except for parts of Southern States, most public health institutions are not well equipped for conducting deliveries at the community or even at the block level. The beneficiaries are often asked to purchase gloves, syringes and medicines from the market. The general view, endorsed by visits to the field is that the health centres and subdivisional hospitals remain understaffed and are
poorly run and maintained. A very large number are unhygienic and incapable of catering to the patient load. Women who deliver at the health facility are discharged a few hours after delivery. Sometimes, deliveries take place on the way to the health facility or even outside the locked labour rooms. Lack of co-ordination and mutual understanding between the ANM and ASHA results in the suffering of pregnant women.
Maternal & Child Health
NRHM has been able to provide an extensive network of transport facilities in States that have established emergency transport systems. On the other hand, there is very little awareness about the Integrated Management of Neonatal and Childhood Illnesses (IMNCI) strategy. In the event of illness of either the mother or the neo-nate, RMPs (some times even local quacks) are consulted. Home-based new born care based on Gadchiroli model and other community based innovations have yet to be made an integral part of the child health strategy.
Rashtriya Swasthya Bima Yojana (RSBY)
Launch of RSBY by Ministry of Labour & Employment in 2007 has been an important step to supplement the efforts being made to provide quality health care to the poor and underprivileged population. It provides cashless health insurance cover up to Rs.30,000 per annum per family. The premium is paid by the Centre and State Governments on a 75:25 sharing basis with the beneficiary paying only a registration fee.
Twenty-five States are in the process of implementing the RSBY and till February 2010, more than 1.25 crore biometric enabled smart cards have been issued for providing health insurance cover to more than 4 crore people, from any empanelled hospital throughout the country. Around 4.5 lakh persons have already availed hospitalisation facility. The scheme is now being gradually extended to the non-BPL category of workers as well. Linkages with RSBY in public sector hospitals need to be strengthened.
National AIDS Control Programme (NACP)
The NACP goal was to halt and reverse the epidemic in India over the five years period of the Eleventh Plan. This was to be done by integrating programmes for prevention, care, support and treatment, as well as addressing the human rights issues specific to people living with HIV/AIDS (PLWHA).. Although the achievement of physical targets under the programme is satisfactory, MoHFW has yet to introduce a HIV/AIDS Bill to protect the rights of children, women and HIV infected persons and avoid discrimination at work place. A National Blood Transfusion Authority is to be established during the remaining period of the Plan. Voluntary blood donation has to be encouraged further to bridge the gap in demand and supply of blood. Expenditure under National AIDS Control Programme including STD control during 2007-08 and 2008-09, has been 112.60 per cent and 91.91 per cent of the approved.
Pradhan Mantri Swasthya Suraksha Yojana (PMSSY)
The PMSSY envisages substantial expansion of central and state government medical institutions. Phase 1 of PMSSY envisages establishment of six new AIIMS like institutions at Patna (Bihar), Bhopal (Madhya Pradesh), Bhubaneswar (Orissa), Jodhpur (Rajasthan), Raipur (Chhattisgarh) and Rishikesh (Uttarakhand). The original estimate of each institute was Rs. 332 crore and the latest estimate is about Rs. 820 crore. For these new ‘AIIMS like institutions’, construction of medical colleges and hospital complexes and construction of residential complexes have been taken up as separate activities. Construction of housing complex at all six sites has commenced and work for medical colleges and hospital complexes is likely to start in the second quarter of 2010-11.
The second component of PMSSY Phase 1 includes upgradation of 13 State Government medical college institutions. These are at Government Medical College, Jammu (Jammu & Kashmir); Government Medical College, Srinagar (Jammu & Kashmir); Kolkata Medical College, Kolkata (West Bengal); Sanjay Gandhi Post Graduate Institute of Medical Sciences, Lucknow (Uttar Pradesh); Institute of Medical Sciences, BHU, Varanasi (Uttar Pradesh); Nizam Institute of Medical Sciences, Hyderabad (Andhra Pradesh); Sri Venkateshwara Institute of Medical Sciences, Tirupati (Andhra Pradesh); Government Medical College, Salem (Tamil Nadu); Rajendra Institute of Medical Sciences, Ranchi (Jharkhand); B.J. Medical College, Ahmedabad (Gujarat); Bangalore Medical College, Bangalore (Karnataka); Grants Medical College & Sir J.J. Group of Hospitals, Mumbai, (Maharashtra) and Medical College, Thiruvananthapuram, (Kerala). The outlay provided is Rs.120 crore per institution, of which Rs. 100 crore would be borne by the Central Government (for SVIMS, Tirupati, it is Rs.60 crore) and the remaining amount will be contributed by the respective States. The State Governments will also provide the resources (human resources and recurring expenditure) for running the upgraded facilities. Upgrading of two State Government medical college institutions is over. Another four are expected to be upgraded by July 2010, two by December, 2010 and the remaining in 2011.
Phase II of PMSSY, approved recently, provides for the establishment of two new AIIMS like institutions in Uttar Pradesh and West Bengal and upgrading of six State Government medical college institutions at Government Medical College, Amritsar (Punjab); Government Medical College, Tanda (Himachal Pradesh); Government Medical College, Nagpur (Maharashtra); Jawaharlal Nehru College of Aligarh Muslim University, Aligarh (Uttar Pradesh); Government Medical College, Madurai (Tamil Nadu) and Pandit B.D. Sharma Postgraduate Institute of Medical Sciences, Rohtak (Haryana).
Overall expenditure under PMSSY had shown improvement in 2008-09 with expenditure of 92.86 per cent as against 58.33 per cent in 2007-08. However, the anticipated expenditure based on RE figures in the current year (2009-10) is only 47.21 per cent of the approved outlay for 2009-10.
AYURVEDA, YOGA AND NATUROPATHY, UNANI, SIDDHA, AND HOMEOPATHY (AYUSH)
There is a resurgence of interest in holistic systems of health care, especially, in the prevention and management of chronic lifestyle related non-communicable diseases and systemic diseases. To mainstream AYUSH by designing strategic interventions for wider utilization of AYUSH both domestically and globally, the thrust areas in the Eleventh Five YearPlan are: strengthening professional education, strategic research programmes, promotion of best clinical practices, technology upgradation in industry, setting internationally acceptable pharmacopoeial standards, conserving medicinal flora, fauna, metals, and minerals, utilizing human resources of AYUSH in the national health programmes, with the ultimate aim of enhancing the outreach of AYUSH health care in an accessible, acceptable, affordable, and qualitative manner.
During the Tenth Plan, the Department continued to lay emphasis on upgradation of AYUSH educational standards, quality control, and standardization of drugs, improving the availability of medicinal plant material, R&D, and awareness generation about the efficacy of the systems domestically and internationally. Steps were taken in 2006–07 for mainstreaming AYUSH under NRHM with the objective of optimum utilization of AYUSH for meeting the unmet needs of the population.
Health Care Services under AYUSH
The AYUSH sector across the country supported a network of 3203 hospitals and 21351 dispensaries. The health services provided by this network largely focused on primary health care. The sector has a marginal presence in secondary and tertiary health care. In the private and not-for-profit sector, there are several thousand AYUSH clinics and around 250 hospitals and nursing homes for in patient care and specialized therapies like Panchkarma.
In clinics and nursing homes there are anecdotal reports of the role of AYUSH in the successful management of several communicable and noncommunicable diseases. However, there is no macrodata available about the contribution of AYUSH to major national programmes for the management of communicable and NCDs. A major challenge in Eleventh Five Year Plan is to identify reputed clinical centres and support upgradation of their facilities via PPP schemes so that the country can boast of a national network of high-quality clinical facilities developed for rendering specialized health care in strength areas of AYUSH.
AYUSH under NRHM
Despite having a different scheme of diagnosis, drug requirements, and treatments as compared to the mainstream health care system, preliminary efforts to integrate AYUSH in NRHM were initiated during the Tenth Plan. It is too early to assess if the AYUSH interventions in NRHM have had significant health impact by way of complementing the conventional national health programmes. Integrating AYUSH into NRHM has the potential of enhancing both the quality and outreach of NRHM, especially with the availability of a large number of practitioners in this field. Supporting strategic pilot action research projects in the Eleventh Five Year Plan to evolve viable models of integration seems necessary.
Mainstreaming AYUSH
• NRHM has mainstreamed AYUSH into the rural health services by co-locating AYUSH personnel in primary health care facilities resulting in increase in utilization of AYUSH treatment. AYUSH practitioners are also used to fill in the position of Allopaths in Primary Health Centres particularly in States that have a substantial shortage of MBBS doctors. While this is a positive development, efforts have to be made for training AYUSH practitioners in public health.
Health: Eleventh Plan Vision
Health as a right for all citizens is the goal that the Plan will strive towards.
A comprehensive approach that encompasses individual health care, public health, sanitation, clean drinking water, access to food, and knowledge of hygiene, and feeding practices.
To transform public health care into an accountable, accessible, and affordable system of quality services.
Convergence and development of public health systems and services that are responsive to the health needs and aspirations of the people.
Public provisioning of quality health care to enable access to affordable and reliable heath services, especially in the context of preventing the non-poor from entering into poverty or in terms of reducing the suffering of those who are already below the poverty line.
Reducing disparities in health across regions and communities by ensuring access to affordable health care.
Good governance, transparency, and accountability in the delivery of health services that is ensured through involvement of Panchayati Raj Institutions (PRI)s, community, and civil society groups.
Health: Eleventh Plan Goals
To raise public spending on health from 0.9 per cent of GDP to 2-3 per cent of GDP, with improved arrangement for community financing and risk pooling.
To undertake architectural correction of the health system to enable it to effectively handle increased allocations and promote policies that strengthen public health management and service delivery in the country.
Reduction in child and maternal mortality.
Universal access to public services for food and nutrition, sanitation and hygiene.
Universal access to public health care services, integrated comprehensive primary health care, with emphasis on services addressing women’s and children’s health and universal immunization.
Prevention and control of communicable and non-communicable diseases, including locally endemic diseases.
Population stabilization, gender and demographic balance.
Revitalize local health traditions and mainstream AYUSH.
Promotion of healthy lifestyles.
Health: Eleventh Plan Objectives
Reducing Maternal Mortality Ratio (MMR) to 1 per 1,000 live births.
Reducing Infant Mortality Rate (IMR) to 28 per 1,000 live births.
Reducing Total Fertility Rate (TFR) to 2.1.
Providing clean drinking water for all by 2009 and ensuring no slip-backs.
Reducing malnutrition among children in the age group 0–3 year to half its present level.
Reducing anaemia among women and girls by 50 per cent.
Raising the sex ratio in the age group 0–6 years to 935 by 2011–12, and to 950 by 2016–17.
Malaria Mortality Reduction Rate: 50 per cent up to 2010, additional 10 per cent by 2012.
Kala Azar Mortality Reduction Rate: 100 per cent by 2010 and sustaining elimination until 2012.
Filaria / Microfilaria Reduction Rate: 70 per cent by 2010, 80 per cent by 2012 and elimination by 2015.
Dengue Mortality Reduction Rate: 50 per cent by 2010 and sustaining at that level until 2012.
Cataract operations: Increase to 46 lakhs by 2012.
Leprosy Prevalence Rate: Reduce from 1.8 per 10,000 in 2005 to less that 1 per 10,000 thereafter.
Tuberculosis DOTS series: Maintain 85 per cent cure rate through entire mission period and also sustain planned case detection rate.
In terms of systems improvements the NRHM targets were:
Upgrade all PHCs into 24x7 PHCs by the year 2010.
Upgrading all Community Health Centres to Indian Public Health Standards.
Increase utilization of first referral units from bed occupancy by referred cases of less than 20 per cent to over 75 per cent.
Engaging 4,00,000 female Accredited Social Health Activists (ASHAs).
Maternal Mortality Ratio (MMR)
To reach the MMR target of 100 by 2012, the required rate of decline from 254 (SRS 2004-06) has to be, on an average, 22 per year. Unfortunately, no data are available on the progress of MMR during the Eleventh Plan period i.e. the period beginning 2007-08. However, earlier data shows that MMR came down from 301 (SRS 2001-03) to 254 (SRS 2004-06), i.e., an average decline of 16 per year. Achieving the Eleventh Plan target clearly requires much faster progress. State wise decline during the pre-Eleventh Plan period varied from an average of 26 per year for Uttar Pradesh/Uttarakhand, 20 per year for Bihar/Jharkhand, 19 per year for Rajasthan, 18 per year for Orissa/ West Bengal to 15 per year for Madhya Pradesh/Chhattisgarh.
When 52.2 per cent of the deliveries are conducted at home (DLHS-3, 2007-8) and comprehensive obstetric care continues to be a problem in many States, the scope for expanding timely access to quality institutional care is limited, particularly for those living in remote and inaccessible areas. In such a scenario, the MMR goal of 100 is achievable only through appropriate area specific interventions.
Infant Mortality Rate (IMR)
Although IMR is showing a downward trend, but the rate of improvement here too has to be three times that in the past so as to attain the level expected by the end of Eleventh Plan. All India IMR was 57 in 2006 and 53 in 2008 (SRS), a decrease of 4 in two years. High focus States of NRHM have shown marginally better performance in rural areas, where IMR has decreased by 5 in two years. Tamil Nadu has also shown marginally better performance, a decline of 6 in two years. To achieve IMR of 28 by 2012, the required rate of decrease has to be an average of 6 per year. Intensive and urgent efforts are required to adopt homebased newborn care based on validated models such as the Gadchiroli model and make focused efforts for encouraging breast feeding and safe infant and child feeding practices. While emphasis on early breast feeding is part of ASHAs training, special training on neonatal care for community and facility level health functionaries will facilitate a faster reduction in IMR.
HOME BASED NEWBORN CARE (HBNC)
Efforts to improve home based care have proven successful at improving child survival. Home Based Newborn and Child Care is to be provided by a trained Community Health Worker (such as the ASHA) who guides and supports the mother, family, and TBA in the care of newborn, and attends the newborn at home if she is sick. The worker is supervised by a field person (ANM/LHV or a doctor) who visits the community once in 15 days. Community acceptance and coverage of such care has been quite good.
The GoI approved the implementation of HBNC based on the Gadchiroli model, where appreciable decline in IMR has been documented on the basis of work done by a VO called SEARCH. Gadchiroli has shown how ordinary women can do extraordinary things: a well-trained local woman can not only lower neonatal mortality but can also bring about attitudinal change. The women Shishu Rakshaks of Gadchiroli have managed to dispel many myths surrounding pregnancy and have been able to ensure better nutrition, care, immunization, and hygiene.
The national strategy during the Plan will be to introduce and make available high-quality HBNC services in all districts/areas with an IMR more than 45 per 1000 live births. Apart from performance incentive to ASHAs, an award will be given to ASHAs and village community if no mother–newborn or child death is reported in a year.
National Rural Health Mission
• NRHM was launched on April 12, 2005, to provide accessible, affordable and accountable quality health services to the poorest households in the remotest rural regions. Allocation has been increased to Rs. 12,070 crore in interim budget for 2009-10 compared to Rs. 12,050 crore in 2008-09. NRHM is being operationalized throughout the country, with special focus on 18 states which includes 8 Empowered Action Group States (Bihar, Jharkhand, Madhya Pradesh, Chhattisgarh, Uttar Pradesh, Uttarakhand, Orissa and Rajasthan), 8 NE states, Himachal Pradesh and Jammu & Kashmir.
• The main aim of NRHM is to provide accessible, affordable, accountable, effective and reliable primary health care facilities, especially, to the poor and vulnerable sections of the population. It also aims at bridging the gap in rural health care services through the creation of a cadre of Accredited Social Health Activists (ASHA) and improved hospital care, decentralization of programme to district level to improve intra and inter-sectoral convergence and effective utilization of resources. NRHM further aims to provide overarching umbrella to the existing programmes of health and family welfare including RCH-II, malaria, blindness, iodine deficiency, filaria, kala-azar, tuberculosis, leprosy and for integrated disease surveillance. Further, it addresses the issue of health in the context of sector-wide approach towards sanitation and hygiene, nutrition and safe drinking water as basic determinants of good health in order to have greater convergence among the related social sector departments i.e. AYUSH, Women & Child Development, Sanitation, Elementary Education, Panchayati Raj and Rural Development. The mission further seeks to buildgreater ownership of the programme among the community through involvement of Panchayati Raj Institutions, NGOs and other stakeholders at national, state, district and sub-district levels to achieve the goals of National Population Policy 2000 and National Health Policy. The expected outcomes of the mission include reduction of IMR to below 30/1000 live births, MMR to below 100/100,000 live births & TFR to 2.1 by 2012.
Performance of NRHM:
7.49 lakh Accredited Social Health Activists (ASHAs) have been selected though the total number of those who have completed all training modules is low. Against the target of 6 lakh fully trained ASHAs by 2008 there are 5.19 lakh ASHAs positioned with drug kits, but their training is still to be completed. Only about 1.99 lakh ASHAs have completed all five modules and 5.65 lakh have completed up to fourth training module.
4.51 lakh Village Health and Sanitation Committees (VHSCs) have been set up against the target of 6 lakh VHSCs by 2008. The operational effectiveness of the VHSCs, however, needs considerable improvement.
40,426 Sub-centres (SCs) have been provided two ANMs against the target of 1.05 lakh SCs by 2009. 8,745 SCs are without even a single ANM.
8,324 Primary Health Centres (PHCs) are functional on 24X7 basis and 5,907of them have three Staff Nurses against the target of 18,000 PHCs by 2009.
3,966 Community Health Centres (CHCs) are functional on 24X7 basis. However, information regarding the target of strengthening 3250 CHCs with seven specialists and nine staff nurses by 2009 is not available. In any case, the number of CHCs/Sub-Divisional Hospitals or equivalent, which have been upgraded to First Referral Unit (FRU) has increased from 750 (as on 31 March 2005) to 1934 (as on 31 December 2009).
510 out of total 578 District Hospitals (DHs) have been strengthened to act as FRUs.
29,223 Rogi Kalyan Samitis (RKSs)/Hospital Development Committees have been constituted at PHC/CHC/DH levels against the target of 37,100 RKSs by 2009.
State & District Societies are in place except at the State level in West Bengal. District Programme Managers and District Accounts Managers are in position in 581 and 579 districts respectively.
356 Districts have operational Mobile Medical Units (MMUs) against the target of 600 MMUs by 2009 (one for each district). In addition, boat clinics in Assam & West Bengal, emergency transport system in Andhra Pradesh, Gujarat, Karnataka, Goa, Uttarakhand, Assam and Rajasthan, GPS enabled MMUs in Gujarat, Haryana and Tamil Nadu are operational.
Human Resources for Health
Measures have been taken during the Eleventh Five Year Plan period to solve the problem of shortage of basic education infrastructure and human resources:.
Ensure availability of medical professionals in rural areas on a permanent basis, posting of doctors with adequate monetary as well as non-monetary incentives, such as suitable accommodation, class I status, preferential school admissions for children of doctors living in remote areas, transfer or posting of choice after a stipulated length of stay and training opportunities.
States to expand the pool of medical practitioners including a cadre of Licentiate Medical Practitioners and practitioners of Indian Systems of Medicine and Homeopathy (AYUSH).
•Increase age of retirement of doctors (all Central and State Government including Defence, Railways, etc.) to 62 years. States will be encouraged to retain public health doctors on contract basis for further period of three years till the age of 65 years, especially in the notified hardship areas.
• A series of one-year duration Certificate Courses for MBBS graduates will be launched in deficit disciplines like public health, anaesthesia, psychiatry, geriatric care, and oncology. The private sector will also be encouraged to participate
Qualitative Feedback of NRHM: Voices from the Field
Accredited Social Health Activists (ASHAs)
The appointment of locally recruited women as Accredited Social Health Activists (ASHAs) who would link potential beneficiaries with the health service system is an important element of the NRHM. The good part is that
7.49 lakh ASHAs have been appointed; but several issues still need to be resolved. Not only is there a lack of transparency in the selection, ASHAs are often inadequately trained. Besides, their only focus seems to be on facilitating institutional deliveries. The ASHA who accompanies the expectant mother faces considerable hardship because she has nowhere to stay for the duration of confinement as institutional accommodation facilities are non-existent. They also often experience long delays in payment of incentives.
Village Health and Nutrition Day (VHND)
An important activity of NRHM, Village Health and Nutrition Day is to promote regular community-oriented health and nutrition activities. The event is held on a fixed day every month to sensitise the community and is popularly known as ‘Tika Karan Divas’. However, implementation is ad-hoc in most villages of the high focus States. Surveys revealed that only a few pockets in some States like Tamil Nadu, Andhra Pradesh, West Bengal and Assam were aware of VHND. The other drawback of the programme was that it often restricted itself to immunisation and antenatal check up are done on the day. There is no nutrition education. To have the desired impact, VHNDs need to be implemented with the full intended content of activities and with regularity. This can be achieved through more active involvement of NGOs and community based organizations.
Janani Suraksha Yojana (JSY)
Launched to promote institutional deliveries, JSY provides cash incentive to expectant mothers who opt for institutional delivery. Poor women from the remote districts in Bihar, Orissa and other States are reported to be visiting institutions to avail JSY benefits. However, except for parts of Southern States, most public health institutions are not well equipped for conducting deliveries at the community or even at the block level. The beneficiaries are often asked to purchase gloves, syringes and medicines from the market. The general view, endorsed by visits to the field is that the health centres and subdivisional hospitals remain understaffed and are
poorly run and maintained. A very large number are unhygienic and incapable of catering to the patient load. Women who deliver at the health facility are discharged a few hours after delivery. Sometimes, deliveries take place on the way to the health facility or even outside the locked labour rooms. Lack of co-ordination and mutual understanding between the ANM and ASHA results in the suffering of pregnant women.
Maternal & Child Health
NRHM has been able to provide an extensive network of transport facilities in States that have established emergency transport systems. On the other hand, there is very little awareness about the Integrated Management of Neonatal and Childhood Illnesses (IMNCI) strategy. In the event of illness of either the mother or the neo-nate, RMPs (some times even local quacks) are consulted. Home-based new born care based on Gadchiroli model and other community based innovations have yet to be made an integral part of the child health strategy.
Rashtriya Swasthya Bima Yojana (RSBY)
Launch of RSBY by Ministry of Labour & Employment in 2007 has been an important step to supplement the efforts being made to provide quality health care to the poor and underprivileged population. It provides cashless health insurance cover up to Rs.30,000 per annum per family. The premium is paid by the Centre and State Governments on a 75:25 sharing basis with the beneficiary paying only a registration fee.
Twenty-five States are in the process of implementing the RSBY and till February 2010, more than 1.25 crore biometric enabled smart cards have been issued for providing health insurance cover to more than 4 crore people, from any empanelled hospital throughout the country. Around 4.5 lakh persons have already availed hospitalisation facility. The scheme is now being gradually extended to the non-BPL category of workers as well. Linkages with RSBY in public sector hospitals need to be strengthened.
National AIDS Control Programme (NACP)
The NACP goal was to halt and reverse the epidemic in India over the five years period of the Eleventh Plan. This was to be done by integrating programmes for prevention, care, support and treatment, as well as addressing the human rights issues specific to people living with HIV/AIDS (PLWHA).. Although the achievement of physical targets under the programme is satisfactory, MoHFW has yet to introduce a HIV/AIDS Bill to protect the rights of children, women and HIV infected persons and avoid discrimination at work place. A National Blood Transfusion Authority is to be established during the remaining period of the Plan. Voluntary blood donation has to be encouraged further to bridge the gap in demand and supply of blood. Expenditure under National AIDS Control Programme including STD control during 2007-08 and 2008-09, has been 112.60 per cent and 91.91 per cent of the approved.
Pradhan Mantri Swasthya Suraksha Yojana (PMSSY)
The PMSSY envisages substantial expansion of central and state government medical institutions. Phase 1 of PMSSY envisages establishment of six new AIIMS like institutions at Patna (Bihar), Bhopal (Madhya Pradesh), Bhubaneswar (Orissa), Jodhpur (Rajasthan), Raipur (Chhattisgarh) and Rishikesh (Uttarakhand). The original estimate of each institute was Rs. 332 crore and the latest estimate is about Rs. 820 crore. For these new ‘AIIMS like institutions’, construction of medical colleges and hospital complexes and construction of residential complexes have been taken up as separate activities. Construction of housing complex at all six sites has commenced and work for medical colleges and hospital complexes is likely to start in the second quarter of 2010-11.
The second component of PMSSY Phase 1 includes upgradation of 13 State Government medical college institutions. These are at Government Medical College, Jammu (Jammu & Kashmir); Government Medical College, Srinagar (Jammu & Kashmir); Kolkata Medical College, Kolkata (West Bengal); Sanjay Gandhi Post Graduate Institute of Medical Sciences, Lucknow (Uttar Pradesh); Institute of Medical Sciences, BHU, Varanasi (Uttar Pradesh); Nizam Institute of Medical Sciences, Hyderabad (Andhra Pradesh); Sri Venkateshwara Institute of Medical Sciences, Tirupati (Andhra Pradesh); Government Medical College, Salem (Tamil Nadu); Rajendra Institute of Medical Sciences, Ranchi (Jharkhand); B.J. Medical College, Ahmedabad (Gujarat); Bangalore Medical College, Bangalore (Karnataka); Grants Medical College & Sir J.J. Group of Hospitals, Mumbai, (Maharashtra) and Medical College, Thiruvananthapuram, (Kerala). The outlay provided is Rs.120 crore per institution, of which Rs. 100 crore would be borne by the Central Government (for SVIMS, Tirupati, it is Rs.60 crore) and the remaining amount will be contributed by the respective States. The State Governments will also provide the resources (human resources and recurring expenditure) for running the upgraded facilities. Upgrading of two State Government medical college institutions is over. Another four are expected to be upgraded by July 2010, two by December, 2010 and the remaining in 2011.
Phase II of PMSSY, approved recently, provides for the establishment of two new AIIMS like institutions in Uttar Pradesh and West Bengal and upgrading of six State Government medical college institutions at Government Medical College, Amritsar (Punjab); Government Medical College, Tanda (Himachal Pradesh); Government Medical College, Nagpur (Maharashtra); Jawaharlal Nehru College of Aligarh Muslim University, Aligarh (Uttar Pradesh); Government Medical College, Madurai (Tamil Nadu) and Pandit B.D. Sharma Postgraduate Institute of Medical Sciences, Rohtak (Haryana).
Overall expenditure under PMSSY had shown improvement in 2008-09 with expenditure of 92.86 per cent as against 58.33 per cent in 2007-08. However, the anticipated expenditure based on RE figures in the current year (2009-10) is only 47.21 per cent of the approved outlay for 2009-10.
AYURVEDA, YOGA AND NATUROPATHY, UNANI, SIDDHA, AND HOMEOPATHY (AYUSH)
There is a resurgence of interest in holistic systems of health care, especially, in the prevention and management of chronic lifestyle related non-communicable diseases and systemic diseases. To mainstream AYUSH by designing strategic interventions for wider utilization of AYUSH both domestically and globally, the thrust areas in the Eleventh Five YearPlan are: strengthening professional education, strategic research programmes, promotion of best clinical practices, technology upgradation in industry, setting internationally acceptable pharmacopoeial standards, conserving medicinal flora, fauna, metals, and minerals, utilizing human resources of AYUSH in the national health programmes, with the ultimate aim of enhancing the outreach of AYUSH health care in an accessible, acceptable, affordable, and qualitative manner.
During the Tenth Plan, the Department continued to lay emphasis on upgradation of AYUSH educational standards, quality control, and standardization of drugs, improving the availability of medicinal plant material, R&D, and awareness generation about the efficacy of the systems domestically and internationally. Steps were taken in 2006–07 for mainstreaming AYUSH under NRHM with the objective of optimum utilization of AYUSH for meeting the unmet needs of the population.
Health Care Services under AYUSH
The AYUSH sector across the country supported a network of 3203 hospitals and 21351 dispensaries. The health services provided by this network largely focused on primary health care. The sector has a marginal presence in secondary and tertiary health care. In the private and not-for-profit sector, there are several thousand AYUSH clinics and around 250 hospitals and nursing homes for in patient care and specialized therapies like Panchkarma.
In clinics and nursing homes there are anecdotal reports of the role of AYUSH in the successful management of several communicable and noncommunicable diseases. However, there is no macrodata available about the contribution of AYUSH to major national programmes for the management of communicable and NCDs. A major challenge in Eleventh Five Year Plan is to identify reputed clinical centres and support upgradation of their facilities via PPP schemes so that the country can boast of a national network of high-quality clinical facilities developed for rendering specialized health care in strength areas of AYUSH.
AYUSH under NRHM
Despite having a different scheme of diagnosis, drug requirements, and treatments as compared to the mainstream health care system, preliminary efforts to integrate AYUSH in NRHM were initiated during the Tenth Plan. It is too early to assess if the AYUSH interventions in NRHM have had significant health impact by way of complementing the conventional national health programmes. Integrating AYUSH into NRHM has the potential of enhancing both the quality and outreach of NRHM, especially with the availability of a large number of practitioners in this field. Supporting strategic pilot action research projects in the Eleventh Five Year Plan to evolve viable models of integration seems necessary.
Mainstreaming AYUSH
• NRHM has mainstreamed AYUSH into the rural health services by co-locating AYUSH personnel in primary health care facilities resulting in increase in utilization of AYUSH treatment. AYUSH practitioners are also used to fill in the position of Allopaths in Primary Health Centres particularly in States that have a substantial shortage of MBBS doctors. While this is a positive development, efforts have to be made for training AYUSH practitioners in public health.
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