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Economic Development

  • Urban Futures

    UN report predicts 55 per cent of Indians will live in cities by 2050 Half of the world's population is expected to turn urban by the end of this year. A UN report now estimates that cities in Africa and Asia will account for most of the growth in urban population by 2050. However, over 45 per cent of India's population may continue to live in villages, down from the 70 per cent now. In comparison, only 30 per cent of Chinese are expected to live in the countryside, against 60 per cent now. The growth in urban population is a historical trend and India can't be an exception. People have historically moved from rural areas to urban enclaves due to social and economic reasons and aspirational factors. Cities generate more jobs than villages, especially in the organised sector. They have good schools and hospitals, diverse markets, vibrant cultural spaces and are assumed to offer a better quality of life. People naturally prefer to migrate to cities when given the opportunity. The flip side of this trend is that cities can get overcrowded and stretch public utilities. Many Indian cities face this prospect. One way to address this problem is to incentivise reverse migration so that our overcrowded cities are decongested, besides, of course, upgrading the facilities in urban centres. Reverse migration is now a realistic proposition due to social and economic changes and emergence of new forms of technology. Our democratic institutions are now more representative and inclusive thanks to Panchayati Raj. Women and lower castes have a visible presence in local government. Social oppression that forced many people to flee villages to cities is on the decline in most parts of the country. The IT revolution is changing the concept of work and workplace. Many non-metros have benefited from these changes. As local economies grow in size markets too will diversify and more jobs will be created in and around these cities. More small towns could reap the benefits of the emerging economy if local governments pursue the right policies. The task before the government is to make policies to ensure that urban amenities presently available only in big cities reach small towns and even villages. States like Kerala and Tamil Nadu have demonstrated that this could be achieved. These two states have built a seamless network of small towns and villages well connected by roads and communication links. As the Budget has revealed India does not face shortage of capital. The task is to ensure that resources are deployed in the right manner. An urbanised population spread more evenly over a large number of cities would be a better option for the future than a handful of overcrowded mega cities.

  • Budget to prop up agriculture sector

    The performance of agriculture sector during the year 2007-08, despite its record production of food grains, is still a cause for concern due its low rate of growth (2.6%) affecting the well being of farmers in various parts of the country. This calls for bold measures for bringing about a turn around of the agriculture sector and the announcements made by the finance minister are a pointer to such measures. The loan waiver for marginal and small farmers and the one-time settlement (OTS) of loans for other farmers and their entitlement for fresh loans with a target of Rs 2,80,000 crore during 2008-09 is expected to take care of the issues relating to the accessibility of credit from institutional sources and reduce the dependence of the resource poor farmers on money lender. The implementation of the Vaidyanathan Committee recommendations for revitalising the long-term co-operative credit structure ensures availability of increased credit for private investments in agriculture by farmers. The contribution of Rs 5,000 crore to the NRC(ST) Funds of Nabard helps in ensuring that the demands of the farmers for their production needs are met. Financial inclusion of the disadvantaged sections is facilitated through opening of additional bank branches in districts with predominant minority population, enhancing the income limits to Rs 18,000 in rural areas under the DRI scheme and access to Janashree insurance product of LIC for all women SHGs credit linked to banks. The increase in the corpus of RIDF by Rs 2,000 crore, coupled with the increased allocation under Rashtriya Krishi Vikas Yojana, Accelerated Irrigation Benefit Programme, the Rainfed Area Development rainfed farming and the setting up of the Irrigation and Water Resources Finance Corporation will facilitate in bringing more area under irrigation as well as in conserving land and water resources, critical to the performance of the sector. These investments will also help in stepping up investments in the private sector also. Various other measures announced for improving the performance of the sector include stepping up funds under the National Horticulture Mission, creation of special funds for plantation crops like cardamom, coffee and rubber, introduction of insurance scheme for select plantation and horticulture crops, etc. The overall thrust in the Budget is not only in boosting the performance of the agriculture sector but in ensuring that there is overall rural development through providing infrastructure- both physical and social, social security, human resource capacity development, off-season employment under NREGA, etc. These should help in achieving the goals of full employment, abolition of poverty and elimination of inequality in the medium term. The writer is Nabard chairman

  • Waiver won't end indebtedness: Bardhan

    This was only a one-time waiver and farmers would fall back into debt Left parties would oppose move to increase working hours from 8 to 10 THRISSUR: Communist Party of India (CPI) general secretary A.B. Bardhan said on Saturday that the loan waiver scheme announced by Finance Minister P. Chidambaram in his budget speech on Friday was no solution to farmers' indebtedness. "For four years, you saw the farmers dying. For four years, you watched them fall deeper and deeper into indebtedness and committing suicide in States like Maharashtra, Madhya Pradesh and Kerala. And, in the fifth year, with the elections coming, you hand out some sops. Then again, it is a one-time waiver. But what happens tomorrow? They will be thrown from one round of indebtedness to another,' Mr. Bardhan said, inaugurating the four-day State conference of the CPI here. Beneficiaries The CPI leader also questioned the government's claim about the number of farmers who would benefit and pointed out that the Reserve Bank of India (RBI) was on record that more than half the farmers in the country were dependent on money-lenders for their credit needs. The government's loan waiver offer would not touch such loans. If the government was sincere about the farm debt crisis, it should have announced the formation of a Debt Relief Commission and pegged the interest rate on farm loans at 4 per cent as demanded by the Left parties when the budget was in the making, he said. Mr. Bardhan said the CPI and other Left parties would oppose the proposal in the Economic Survey to increase working hours from eight to ten. They would wage a battle to thwart attempts to curtail the rights won by the working class over 150 years ago through a long struggle. He also pointed out that the Finance Minister did not respond to the Left's plea for measures to universalise the public distribution system. He welcomed the decision to extend the National Rural Employment Guarantee Scheme to all the districts in the country, but regretted that only Rs.16,000 crores was earmarked for its implementation. This would not be sufficient to provide 100 days' employment to all the eligible persons in the rural areas or to give them wages as envisaged in the NREG Act. The failure to make adequate funds available clearly showed that the government was not interested in implementing the scheme in letter and in spirit, Mr. Bardhan said. The BJP was trying its best to utilise the discontent in the minds of the people over a host of issues, including the sharp increase in the prices of essentials, he said. The Congress seemed to be offering power to the BJP on a platter, with its ill-conceived policies and failure to come out with people-friendly measures. On its part, the Left was committed to keeping the BJP out of power and wanted all the Left and secular parties to come together on a common platform on the basis of a clear pro-people programme. What emerged from the exercise should not be a Third Front where parties came together for electoral purposes, but a real third alternative to the Congress and the BJP, he said.

  • ISRO's manned space mission gets Rs 125-cr allocation

    Indian Space Research Organisation's (ISRO) human space mission proposal has got its first significant budgetary share, Rs 125 crore, while the Department of Space has got 24 per cent raise in outlay for its 2008-09 activities. The space budget of Rs 4,074 crore, compared with Rs 3,290 crore last fiscal, partially provides for at least three major projects

  • Transforming rural livelihoods in India

    <p>This report presents an overview of the impact of rural livelihood programmes supported by DFID in the context of the Millennium Development Goals, and explores some of the lessons learned under headings of income generation and rural growth, better management of natural resources, targeting the poorest and marginalised, and local institutions and self-governance.

  • Chidambaram's bonanza for middle class

    Finance Minister P. Chidambaram's wife Nalini, their son Kartik and daughter-in-law at the Parliament House after the presentation of the Union budget on Friday. NEW DELHI: In a politically-crafted budgetary exercise ahead of the general election next year, Union Finance Minister P. Chidambaram on Friday announced a massive Rs.60,000- crore loan waiver programme to rid four crore farmers of their financial liability. The Minister also gave higher-than-expected exemptions to income-tax payers along with restructuring of tax slabs. He put no fresh burden on the corporate sector even as he scaled down excise duties on a number of items to stimulate demand, production and economic growth. Striving to placate not only the aam aadmi but also all other sections, Mr. Chidambaram, while presenting the Union budget for 2008-09

  • Country road to development strengthened

    BHARAT NIRMAN: Allocation increased to Rs 31,280 crore against Rs 24,603 crore in 2007-08. Bharat Nirman, the flagship programme of the UPA government for rural infrastructure, with a cost of Rs 1,74,000 crore and a fast approaching deadline of 2009, got an allocation of Rs 31,280 crore this Budget. The highlight this year is the increase in allocation for rural housing. Bharat Nirman targets six development components, viz rural access to housing, roads, drinking water, telephony, electrification and irrigation. For the rural housing scheme, called Indira Awas Yojana, which benefits only those who have land, the Budget provides an increased subsidy for building houses under the programme. The government subsidy of Rs 25,000 crore for houses in the plains will now increase to Rs 35,000 crore. The public sector banks have been asked to give up to Rs 20,000 in loans at an interest of 4 per cent for the Indira Awas Yojana houses. About 6 million houses are targeted to be built under the programme by 2009. So far, 5.1 million houses have been constructed, according to Finance Minister P Chidambaram. OUTLAYS vs OUTCOMES Expenditure is up, education is not % children who can Class Read* Subtract Divide 1 3 3.9 1.5 2 9 14.2 3.7 3 21.6 31.1 11.2 4 42.5 34.7 27.6 5 58.7 31.9 42.4 6 71.7 27.8 54.2 7 79.7 23.4 62.8 8 86.6 18.3 71.6 Average 41.6 23.1 30.1 Note: Children who can divide can subtract as well Source: Pratham 2007 * Read a Class 2 text The allocation of Rs 5,400 crore for rural housing is up from Rs 4,400 crore last year. Bharat Nirman, as a whole, received Rs 31,280 crore, compared to Rs 24,603 crore in 2007-08. Bharat Nirman's component on drinking water, implemented through the Rajiv Gandhi Drinking Water Mission, got another feature under the Budget with the finance minister allocating a separate amount of Rs 200 crore for providing drinking water in schools. The allocation for the scheme has also been enhanced from Rs 6,500 crore last year to Rs 7,300 crore this year. The Budget was silent on rural access to telephony under Bharat Nirman except saying that 52 villages were getting access to telephone, well ahead of the target. The scheme targets reaching over 66,000 villages by 2009 and can progress at a rate of 45 houses per day. The Rajiv Gandhi Grameen Vidyutikaran Yojana, which aims at providing electricity connections to all villages by 2009, has been allocated Rs 5,500 crore this year. Access to irrigation under Bharat Nirman got a fillip with the Accelerated Irrigation Benefit Programme allocations getting almost doubled from Rs 11,000 crore to Rs 20,000 crore. Under the programme, 24 major and medium irrigation projects and 753 minor irrigation projects will be completed in this financial year, creating an irrigation potential of 500,000 hectares. The scheme targets 10 million hectares. While six million hectares are to be covered under major and medium projects, one million hectares are to be brought under micro irrigation. Chidambaram said that 548,000 hectares were brought under drip and sprinkler irrigation since 2006, while, with a budgetary allocation of Rs 500 crore, 400,000 hectares were being targeted for coverage this year.

  • Climate change after Bali

    Do the math: affordable new technologies can prevent global warming while fostering growth. March 2008

  • India leads developing nations in private sector investment

    India has had the most success attracting more private investment in infrastructure in 2006 than any other developing country. Long-standing policies in most other South Asian countries are beginning to bear fruit as well. Nevertheless, delivering the infrastructure services needed to sustain and accelerate

  • Reducing poverty and hunger in Asia: the role of agricultural and rural development

    After 30 years of dynamic growth and substantial poverty reduction in Asia, do agriculture and rural development still have a role to play in that region?

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