A Review of Sylabus

8/13/2019 A Review of Sylabus

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A REVIEW OF SYLABUSECONOMICS-II


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ECONOMIC SYSTEMSTOPIC-1


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3

Socialism: You have 2 cows. Give one to a neighbor.

Communism: you have 2 cows. Give both cows to government andthey may give you some milk.

Nazism: You have 2 cows. The government shoots you and takes bothcows

Anarchism: You have 2 cows. Shoot the government agent and steal

another cow. Capitalism: You have 2 cows. Sell 1 cow and buy a bull.

Bovine Economic Philosophies


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What are Economic Systems?

Nations use economic systems to determinehow to use their limited resources effectively.

Primary goal of an economic system is to

provide people with a minimum standard ofliving or quality of life. Different types of Economic Systems

Traditional Economy Market Economy (free enterprise) Command Economy(Centrally Planned Mixed Economy


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1.Traditional Economy Found in rural, under-

developed countries Vanuatu islands nearAustralia

Pygmies of Congo Eskimos & Indian tribes Belarus in central Europe

Customs govern theeconomic decisions thatare made

Farming, hunting andgathering are done thesame way as thegeneration before

Economic activities are

centered around the familyor ethnic unit Men and women are given

different economic roles

and tasks Advantages: people have

specific roles; security inthe way things are done

Disadvantages: Technologyis not used; difficult toimprove


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2.Market Economy (Free Enterprise)

Also called a Free MarketEconomy or Free EnterpriseEconomy

Businesses and consumers

decide what they willproduce and purchase andin what quantities

Decisions are made

according to law of supply &demand

Supply of and demand forgoods and servicesdetermine what is to beproduced and the price thatwill be charged .

Advantage competition tohave the best products andservices

Disadvantage huge riftbetween wealthy and poor

Note: a true marketeconomy does not exist.


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3.Command Economy The government (or central

authority) determines what,how, and for whom goodsand services are produced.

Two types: Strong Command where

government makes alldecisions (communism China, Cuba)

Moderate Command where some form of privateenterprise exists but thestate owns major resources(socialism France andSweden)

Advantages Guarantees equal standard

of living for everyone Less crime and poverty Needs are provided for

through the government Disadvantages

Minimal choices Fewer choices of items No incentive to produce

better product or engage inentrepreneurship

Also known as a Planned orManaged Economy


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INDIA AS A MIXED ECONOMY Jawaharlal Nehru, our first Prime Minister, felt that mixed economy

is ideal for developing economies.

The concept of mixed economy implies that the decision makingprocess covering economic activities (and more particularly thoserelating to allocation of productive resources ) are shared betweenprivate and public sectors.

As a matter of fact every modern economy is a mixed economy.

Resource allocation through market forces is supplemented by non-market ones and in practice the state economic activities tend to beall pervading in the economies of both MDCs and LDCs.


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TOPIC-2:ECONOMIC GROWTH ANDECONOMIC DEVELOPMENT


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PARADYGM SHIFT IN DEVELOPMENT

EFFICIENCY

SOCIAL DEV.

SUSTAINABLE DEV.

HUMAN DEV.

H.R.D.

ECONOMIC DEV.

ECONOMIC GROWTHEQUITY


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ECONOMISTS VIEWS ON

DEVELOPMENT Meir and Baldwin Economic development is

a process where by an economys real incomeincrease over a long period of time. Kindle Berger--- Economic Growth refers to a

rise in output, but Economic Developmentimplies changes in technological andinstitutional organization of production as wellas distributive pattern of income.


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H.R.D &H.D. Human Resource De velopme nt includes tra ining an individual after

he/she is fir st hired, providing opportunities to learn new skills,distributing resources that are benefici al for the employee's tasks ,and any other developmental activities .

Human Development : development is focused on expanding thechoices human beings have to have the life they value. In this sense,it is essential to work on building capacities for humandevelopment that is sustainable over time.These core capacities for human development are:

1.Enjoying a long and healthy life,2.Being educated 3.Access to resources that enable people to live in dignity 4.Being able to participate in decisions that affect theircommunity
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SUSTAINABLE & SOCIAL DEVELOPMENT

SUSTAINABLE DEVELOPMENT is developmentthat meets the needs of the present withoutcompromising the ability of future to meet theirown needs. ( Brundtland )

SOCIAL DEVELOPMENT is a process of socialchange through increasing awareness about theirrights and improving organisation in physical,social, mental, and psychological aspects. ( worldbank )


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INDICATORS OF ECONOMICDEVELOPMENT

At the initial stage, the concept of economicdevelopment was confined only to increase in theper capita income.

But today, economic development is treated asmulti-dimensional concept in terms of increase inreal national income, real per capita income,economic welfare, human development index,etc.

In brief, economic development brings aboutqualitative change which includes institutionaland technical changes.


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DEVELOPMENT ASPECTS

1. Increase in real income and per capita income.2. It is a long term process3. Changes in social and economic institutions4. Improving Standard of living5. Welfare of the people should increase through the

increase of employment opportunities, reduction inincome inequalities and eradication of poverty.


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DETERMINANTS OF ECONOMIC

DEVELOPMENT1. Natural resources2. Human resources3. Institutional factors (democracy,

freedom and human rights)4. Capital and technological progress5. Managerial skills6. Foreign Trade and Investment


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COMMON CHARACTERISTICS OFDEVELOPING COUNTRIES

1. Low Standards of Living, characterized by lowincomes, inequality, poor health and inadequateeducation

2. Low Levels of Productivity

3. High Rates of Population Growth & DependencyBurdens

4. High & Rising Levels of Unemployment &Underemployment

5. Substantial Dependence on Agricultural Production &Primary Product Exports6. Prevalence of imperfect markets & limited

information.7. Dominance, Dependence and Vulnerability in

International Relations.


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TOPIC-3:Population theories

1. MALTHUSIAN THEORY OF POPULATION


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Thomas Malthus

1766-1834. Born near Guildford! Wrote An essay in the First Principle

of population first published in 1798 Debatable whether the principles ofMalthus two hundred years ago

(that were very revolutionary andcontroversial ) have any relevance tothe modern world.

The world population in 1798 was atnine million people. We have nowpassed the six billion mark.


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The Core Principles of Malthus:

Food is necessary for human existence Human population tends to grow faster than the power

in the earth to produce subsistence

The effects of these two unequal powers must be keptequal Since humans tend not to limit their population size

voluntarily - preventive checks in Malthus

terminology.


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Malthus recognised that population ifunchecked, grows at a geometric rate:

1 2 4 8 16 32

However, food only increases at an arithmeticrate, as land is finite.

1 2 3 4 5 6


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CHECKS

Malthus suggested that once thisceiling (catastrophe) had been

reached, further growth in populationwould be prevented by negative andpositive checks.

He saw the checks as a naturalmethod of population control. Theycan be split up into 2 groups.


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Negative checks (decreased birthrate).

Negative Checks were used to limit thepopulation growth.

It included abstinence/ postponement ofmarriage which lowered the fertility rate.

Malthus favoured moral restraint (including latemarriage and sexual abstinence) as a check onpopulation growth.

However, it is worth noting that Malthusproposed this only for the working and poorclasses!


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Positive checks (increased death

rate) Positive Checks were ways to

reduce population size by events

such as famine, disease, war -increasing the mortality rate andreducing life expectancy.


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'J' Curve - Population Crash Model


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Was Malthus right?

There has been a population explosion Africa repeated famines, wars, food crisis,

environmental degradation, soil erosion, cropfailure and disastrous floods so was he right?


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But..

Technological improvements which he couldnot have foreseen

The increased amount of cropland due toirrigation

Reduced population growth as countries movethrough the DTM


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2.OPTIMUM THEORY OF POPULATION Dalton and Robbins vehemently criticized the

Malthusian theory for its pessimism They assumed that population growth is

advantageous in the initial period and afterachieving optimum population, it will bedisadvantageous

Optimum population(O) is defined as thatpopulation where there is the highest per capitaincome

They gave the formula for calculating surplus ordeficit population

M= (A-O)/O where M=maladjustment, A=actualpopulation, O= optimum population


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DIAGRAM FOR THE OPTIMUM THEORY

PER CAPITA INCOME

AP2

AP1

O OP1 OP2 POPULATION SIZE


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CRITICISM OF OPTIMUM THEORY

OPT is part of the economics theory ofpopulation.

According to economics, there are five factors ofproduction: land, labor, capital, organization andenterprise.

One single factor produces nothing. Initially the cost of production falls with

increasing use of a factor but it starts increasingthereafter.


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CRITICISM OF OPTIMUM THEORY Up to the optimum size there are conditions of

increasing returns as economics of large scaleproduction is enjoyed by any increase in output.However, beyond the optimum size the diseconomiesof large scale production or decreasing returns begin toset in.

Perfect substitution is impossible. At the optimum level the ratio of marginal productivity

of a factor to price of that factor is same for all thefactors.

Optimum point is not fixed. It depends on otherfactors.


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CRITICISM OF OPTIMUM THEORY

OPT gives an objective ideal according towhich changes in population should becontrolled.

The limitation of the OPT is that it ignores thedistributional aspects of increase in nationalincome. Moreover, it takes a very narrow andmaterialistic view of social objectives;maximizing per capita income is not alwaysthe goal.


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WHAT DRIVES POPULATION GROWTH:

DEMOGRAPHIC TRANSITION


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TOPIC-4:PROBLEMS OF INDIANAGRICULTURE AND LAND REFORMS POLIC


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PROBLEMS OF INDIAN AGRICULTURE

India is an agrarian economy. Agriculture plays a crucial role in our economy. It provides livelihood to the majority of the

people in the country. It provides food security to the people

It supplies raw material to industries. Allied activities like dairying, poultry and

fisheries are the part of agriculture


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CAUSES OF EXCESSIVE DEPENDENCEON AGRICULTURE

1. Since there is no encouragement for handicrafts during the Britishregime, the rural artisans started depending on agriculture fortheir livelihoods.

2. The small scale and cottage industries could not compete with theproducts of large scale industries, with the result that they shift to

agriculture.3. Since secondary and tertiary sectors could not provideemployment to the growing population, dependence on farmsector considerably increased.

4. The regional and sectoral mobility of labor is low due to illiteracyand social barriers and hence rural labor stay in farm sector.

5. Employment avenues are not increasing commensurate with therapid population growth causes growth of unskilled labor whodepend on agriculture itself.


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IMPORTANCE OF AGRICULTURE IN INDIAN ECONOMY1. Share of Agriculture in national income is high but decreasing

In the developed countries, the share of agriculture is very low. In UK it is2%, USA 3%, and Canada 5%

YEAR % share of agriculture innational income

1950-51 55.4

1970-71 44.5

1990-91 30.92000-01 24.7

2010-11 16.2


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IMPORTANCE OF AGRICULTURE IN INDIAN ECONOMY

2. Sources of livelihood: Majority of the workers in our country

depends on agricultural sector for their livelihoods, thoughnon-farm sectors have been developed well.

In developed countries, the proportion of workers inagriculture is very low. In UK it is 2%, USA 3%, and France 7%

YEAR % OF WORKERS INAGRICULTURAL SECTOR

1951 72.7

1971 72.6

1991 67.4

2001 57.3

2011 52.5(estimate)

IMPORTANCE OF AGRICULTURE IN INDIAN ECONOMY


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IMPORTANCE OF AGRICULTURE IN INDIAN ECONOMY3. Role of agriculture in Industrial development:

Agriculture is the main source of supplying raw materials to allagro- based industries like textiles, jute, sugar, and edible oils etc.

4. Contribution of Agriculture sector in foreign trade:The agricultural sector is playing a pivotal role in our foreign tradeactivities. This is particularly clear in case of exports like Tea,Coffee, Sugar, Oil seeds, Spices, Basumathi rice etc.

5. Supply of food:

Agricultural sector provides food security to the teeming millionsat an affordable price. Total food grains production in the countryincreased from 51 million tones in 1951 to 209 in 2001.

6. Other factors:Transport and Banking sectors are the main beneficiaries of

agriculture recently. Governments are allocating more funds tothis sector. It gains international importance since we are the firstin the production of ground nut, second in Paddy and third inTobacco.

PRODUCTIVITY OF AGRICULTURE 2001


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PRODUCTIVITY OF AGRICULTURE-2001(PER HECTARE IN QUINTALS)

One of the major problems of Indian agriculture is the level ofproduction and productivity are low when compared to othercountries.

ParticularsYield inIndia

Worldshighestyield

Name of thecountry

A. Food cropsPaddyWheat

MaizeB. Commercial cropsSugar CaneGround nutCottonJute

19.1327.43

18.40

6809.202.0020.00

88.880.5

96.5

119030.412.725.2

EgyptBritain

Italy

EgyptUSAAustraliaChina


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TOPIC-5:LAND REFORMS


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WHAT IS LAND CEILING?

A ceiling on agricultural land holding meansstatutory absolute limit on the amount of landwhich an individual may hold

The imposition of a ceiling has two aspects:1. Ceiling on existing holdings2. Ceiling on future acquisitin


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II FIVE YEAR PLAN QUESTIONS

1. To what land ceilings should apply?2. At what levels ceiling should be fixed?3. What exemptions should be made?4. What steps should be taken to prevent mala fide

transfers?5. What compensation should be paid for land

acquired? And6. How the acquired land should be distributed?


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HIGHLIGHTS OF LAND CEILING POLICY

1. Land ceiling is fixed at 18 acres of wet land and 54 acres ofun irrigated land

2. From the individual as a unit to family holding 3. Lowered ceiling for a family of five members

4. Fewer exemptions from ceiling5. Retrospective application of the law for declaring benamitransactions null and void

6. In order to insulate the measure from challenge in thecourts of law, jurisdiction of civil courts has been barred

7. Most of these laws have been included in the NinthSchedule of the Constitution, which places them beyondany challenge in courts of law on ground of infringementof Fundamental Rights


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IMPLEMENTATION OF LAND CEILING

1. Success has been limited due to poor enforcement2. Till September 2001, 2.98 million hectares of land

had been declared surplus of which 2.18 millionhectares was distributed to 5.58 millionbeneficiaries.

3. This shows that only less than 2 per cent land hasbeen declared surplus while only 1 per cent of thetotal cultivated area has been actually distributed.

4. In the wake of Globalisation the industry and largefarmers are being given exemption from ceiling laws.


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THE CASE FOR CEILING

1. The social rationale : it is socially unjust to allow smallnumber of people to hold large part of land and exploitthe poor masses.

2. Improving the position of the poor : the income of thepoor who receive land as a result of land redistribution.According to FAO, redistribution of only 5% of farm land inIndia, coupled with improved access to water, couldreduce rural poverty by 30%.

3. The efficiency argument : the small farms can be moreefficiently managed than large farms.

4. Inculcating the spirit of cooperation : the beneficiaries canbe motivated for cooperative farming, socialmanagement, and joint cultivation


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CASE AGAINST CEILING

1. The break up of large holdings into smallones will adversely affect productivity andproduction may decline.

2. The growth of output and employment mayalso slow down in the long run owing to thereduction in savings and investment, because

the small farmers consume away the largeproportion of their income than big farmers.


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SUCCESS OR FAILURE? Land ceiling legislation is not very successful in

India because of the defects and exemptions inland ceiling laws.

The interference of judiciary, opposition from theland lords, lack of proper land records are someof the reasons for failure.

Even those who received land could not doefficient farm management because of lack ofirrigation, credit and poor quality of landdistributed.

Lack of political will


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TENANCY REFORMS

THREE ISSUES ARE DISCUSSED1. Regulation of rent : 30 to 50% of gross produce

is being implemented in different states.

2. System of tenure : owner can take back the landonly for personal cultivation

3. Ownership rights on tenants : Kerala, Karnataka,

and West Bengal have done better to conferright of ownership right to the tenants.

TOPIC-6:INDUSTRIAL POLICIES SERVIC


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TOPIC 6:INDUSTRIAL POLICIES,SERVICSECTOR AND LABOUR POLICIES


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INDUSTRIAL POLICIES

1. Industrial development can provide a securebasis for the rapid growth of income.

2. Generation of Productive employment.

3. Strengthening the Economy: capital goods, farmmechanization, infrastructure development4. Achievement of self reliance5. Improvement of foreign trade6. Broadening the social outlook modern outlook

without superstition and ignorance


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THE ROLE OF INDUSTRIALISATION

1. Industrial development can provide a securebasis for the rapid growth of income.

2. Generation of Productive employment.3. Strengthening the Economy: capital goods, farm

mechanization, infrastructure development4. Achievement of self reliance5. Improvement of foreign trade

6. Broadening the social outlook modern outlookwithout superstition and ignorance


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OBJECTIVES OF INDUSTRIAL POLCY


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OBJECTIVES OF INDUSTRIAL POLCY-1948

1. To promote a socialist economy basingon equality in opportunity and justice.

2. To enhance the standard of living of thepeople3. To provide employment opportunities to

all4. To reduce the disparities in income and

wealth



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1. To accelerate the rate of growth and to speed upindustrialization.

2. To expand Public sector3. To reduce disparities in income and wealth.4. To develop heave industries and machine making industries.5. To develop large and growing co-operative sector.6. To prevent Monopolies and Restrictive Trade Practices.7. To achieve balanced regional development8. To enhance employment opportunities.

9. To encourage cottage, village and small scale industries.10. To fulfill economic and social opportunities

OBJECTIVES OF INDUSTRIAL POLCY


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1. To correct the distortions or weaknesses andto attain international competitiveness.

2. To provide gainful employment in the privatesector.

3. To increase the productive capacity ofindustries.

4. To reduce the economic inequalities and toachieve economic development.

CRITICAL APPRAISSAL OF INDUSTRIA


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CRITICAL APPRAISSAL OF INDUSTRIAPOLCY-1991

1. The main aim of 1991 policy is to remove thebottlenecks which acted as obstacles for industrialproduction. But the general Index of IndustrialProduction has come down from 7.8% in 1981-91 to7.2% in 1994-2001.

2. But the Central PSUs performed better in 1994 -2001.3. The overall growth rate of employment was only to

the order of 1% from 1991-1997-98. it is 1.1% in theunorganized sector.

4. The proportion of casual labor to total employmenthas increased. This is a negative factor in view of laborwelfare and employment security.


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TOPIC-7:SERVICE SECTOR

OVERVIEW OF SERVICE SECTOR


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OVERVIEW OF SERVICE SECTOR

India stands out for the size and dynamism of itsservices sector. The contribution of the servicessector to the Indian economy has been manifold:a 55.2 per cent share in gross domestic product(GDP)

growing by 10 per cent annually, contributing toabout a quarter of total employment

accounting for a high share in foreign directinvestment (FDI) inflows and over one-third oftotal exports, and recording very fast (27.4 percent) export growth through the first half of 2010-11.

Growth of Service Sector (%)


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Growth of Service Sector (%)SECTOR 2004-05 2005-06 2006-07

Trade, Hotel, Transport & Communication 10.6 11.5 13.0

Financing, Insurance, Real Estate 9.2 9.7 10.6

Community, Social & Personal Services 9.2 7.8 7.8

Total Services 9.9 10.0 11.0

GDP at Factor Cost 7.5 8.4 9.4

Source: Central Statistical Organization Growth of Services Sector GDP (Constant Prices)

S i B f d ft Lib li ti


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Services: Before and after Liberalization Before liberalization Services was the residual sector drawing

refugees from agriculture Between 1996 and 2005- the triple impact of Indias external

liberalization, domestic economic reforms and the rise of aglobal market for skilled services facilitated by informationtechnology makes itself felt, share of services in Indias GDPgrew from just over 40% to about 54%.

Rapid growth of services in the economy, esp. in the externalsector- also facilitated by the fact services enterprises requiredlesser capital for start-up - less dependent on the Indiasrelatively poor infrastructure than manufacturing.

China, which has a far higher proportion of its economy inmanufacturing, and has emerged as the global hub for laborintensive manufacturing, has much better infrastructurethan India. Chinas better infrastructure facilitatedentrepreneurship in the manufacturing sector.


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Growth of Services An important feature of Indias growth -

skewed towards services -described as jobless growth

Share of agriculture in the Indian economydeclined rapidly

Share of employment in agriculture hasremained the same- increasing share of

services in the GDP has not beenaccompanied by services claiming a largershare of employment in the decade of the1990s


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Growth in Services growth in output in services in India in recent times has

mostly come from the rapid development of skillintensive services in the IT and professional servicessegments- oriented towards the external market

large proportion of services in India are a part of the informal economyand the official employment figures might understate the actual size of theservices workforce

there is a lot of cross-over between services and agriculture sectorlaborers, i.e. many workers spend part of the year as agricultural workersand the rest of the year working in some service job such as informal retailand construction work

There has been some debate on the repercussions of this skill biaseddevelopment of service sector jobs

TOPIC 8: LABOUR POLICY AND SOCIAL


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TOPIC-8: LABOUR POLICY AND SOCIALSECURITY LEGISLATIONS


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Labor laws in India Workmens Compensation Act of 1923 [15] The Workmens Compensation Actcompensates a workman for any injury suffered during the course of his

employment or to his dependents in the case of his death. The Act provides for therate at which compensation shall be paid to an employee. This is one of manysocial security laws in India. [16]

Trade Unions Act of 1926 [17] This Act enacted the rules and protections granted toTrade Unions in India. This law was amended in 2001.

Payment of Wages Act of 1936 [18] The Payment of Wages Act regulates by whenwages shall be distributed to employees by the employers. The law also providesthe tax withholdings the employer must deduct and pay to the central or stategovernment before distributing the wages.

Industrial Employment (Standing orders) Act of 1946 [19] This Act requiresemployers in industrial establishments to define and post the conditions ofemployment by issuing so-called standing orders. These standing orders must beapproved by the government and duly certified. These orders aim to removeflexibility from the employer in terms of job, hours, timing, leave grant,productivity measures and other matters. The standing orders mandate that theemployer classify its employees, state the shifts, payment of wages, rules forvacation, rules for sick leave, holidays, rules for termination amongst others.
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Labor laws in India Industrial Disputes Act of 1947 [20] The Industrial Disputes act 1947 regulates how employers may address

industrial disputes such as lockouts, layoffs, retrenchment etc. It controls the lawful processes for reconciliation,adjudication of labour disputes. The Act also regulates what rules and conditions employers must comply beforethe termination or layoff of a workman who has been in continuous service for more than one year with theemployer. The employer is required to give notice of termination to the employee with a copy of the notice toappropriate government office seeking government's permission, explain valid reasons for termination, and waitfor one month before the employment can be lawfully terminated. The employer may pay full compensation forone month in lieu of the notice. Furthermore, employer must pay an equivalent to 15 days average pay for eachcompleted year of employees continuous service. Thus, an employee who has worked for 4 years in addition tovarious notices and due process, must be paid a minimum of the employee's wage equivalent to 60 days beforeretrenchment, if the government grants the employer a permission to layoff.

Minimum Wages Act of 1948 [21] The Minimum Wages Act prescribes minimum wages in all enterprises, and insome cases those working at home per the schedule of the Act. Central and State Governments can and do reviseminimum wages at their discretion. The minimum wage is further classified by nature of work, location andnumerous other factors at the discretion of the government. The minimum wage ranges between 143 to 1 120 perday for work in the so-called central sphere. State governments have their own minimum wage schedules. [22]

Industries (Regulation and Development) Act of 1951 [23] This law declared numerous key manufacturingindustries under its so-called First Schedule. It placed many industries under common central governmentregulations in addition to whatever laws state government enact. It also reserved over 600 products that can onlybe manufactured in small scale enterprises, thereby regulating who can enter in these businesses, and above all

placing a limit on the number of employees per company for the listed products. The list included all keytechnology and industrial products in early 1950s, including products ranging from certain iron and steel products,fuel derivatives, motors, certain machinery, machine tools, to ceramics and scientific equipment.
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Labor laws in India Employees Provident Fund and Miscellaneous Provisions Act of 1952 This Act seeks to ensure the

financial security of the employees in an establishment by providing for a system of compulsory savings.The Act provides for establishments of a contributory Provident Fund in which employees contributionshall be at least equal to the contribution payable by the employer. Minimum contribution by theemployees shall be 10-12% of the wages. This amount is payable to the employee after retirement andcould also be withdrawn partly for certain specified purposes.

Maternity Benefit Act of 1961 The Maternity Benefit Act regulates the employment of the women andmaternity benefits mandated by law. Any woman employee who worked in any establishment for a periodof at least 80 days during the 12 months immediately preceding the date of her expected delivery, isentitled to receive maternity benefits under the Act. The employer is required to pay maternity benefits,medical allowance, maternity leave and nursing breaks.

Payment of Bonus Act of 1965 This Act, applies to an enterprise employing 20 or more persons. The Actrequires employer to pay a bonus to persons on the basis of profits or on the basis of production or

productivity. The Act was modified to require companies to pay a minimum bonus, even if the employersuffers losses during the accounting year. This minimum is currently 8.33 percent of the salary.

Payment of Gratuity Act of 1972 This law applies to all establishments employing 10 or more workers.Gratuity is payable to the employee if he or she resigns or retires. The Indian government mandates thatthis payment be at the rate of 15 days salary of the employee for each completed year of service subjectto a maximum of 1000000.

Labor structure in India


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Labor structure in India India's Ministry of Labor, in its 2008 report, classified the unorganized

labor in India into four groups. [30] This classification categorized India's

unorganized labour force by occupation, nature of employment, speciallydistressed categories and service categories. The unorganized occupational groups include small and marginal farmers,

landless agricultural labourers, share croppers, fishermen, those engagedin animal husbandry, beedi rolling, labeling and packing, building andconstruction workers, leather workers, weavers, artisans, salt workers,workers in brick kilns and stone quarries, workers in saw mills, andworkers in oil mills.

A separate category based on nature of employment includes attachedagricultural labourers, bonded labourers, migrant workers, contract andcasual laborers. Another separate category dedicated to distressedunorganized sector includes toddy tappers, scavengers, carriers of headloads, drivers of animal driven vehicles, loaders and unloaders.

The last unorganized labor category includes service workers such asmidwives, domestic workers, barbers, vegetable and fruit vendors,newspaper vendors, pavement vendors, hand cart operators, and theunorganized retail
http://en.wikipedia.org/wiki/Labour_in_Indiahttp://en.wikipedia.org/wiki/Labour_in_Indiahttp://en.wikipedia.org/wiki/Retailing_in_Indiahttp://en.wikipedia.org/wiki/Retailing_in_Indiahttp://en.wikipedia.org/wiki/Labour_in_India


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UNORGANISED SECTOR The unorganized sector has low productivity and offers lower wages. Even

though it accounted for over 94 percent of workers, India's unorganizedsector created just 57 percent of India's national domestic prod uct in2006, or about 9 fold less per worker than the organized sector. [33] According to Bhalla, the productivity gap sharply worsens when ruralunorganized sector is compared to urban unorganized sector, with grossvalue added productivity gap spiking an additional 2 to 4 fold dependingon occupation. Some of lowest income jobs are in the rural unorganized

sectors. Poverty rates are reported to be significantly higher in familieswhere all working age members have only worked the unorganized sectorthroughout their lives. [34][35]

Agriculture, dairy, horticulture and related occupations alone employ 52percent of labor in India.

About 30 million workers are migrant workers, most in agriculture, and

local stable employment is unavailable for them. India's National Sample Survey Office in its 67th report found that

unorganized manufacturing, unorganized trading/retail and unorganizedservices employed about 10 percent each of all workers nationwide, as of2010. It also reported that India had about 58 million unincorporated non-Agriculture enterprises in 2010.

Relative Regulations and Rigidity in Labor Laws
http://en.wikipedia.org/wiki/Labour_in_Indiahttp://en.wikipedia.org/wiki/Labour_in_Indiahttp://en.wikipedia.org/wiki/Labour_in_Indiahttp://en.wikipedia.org/wiki/Labour_in_Indiahttp://en.wikipedia.org/wiki/Labour_in_India


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Relative Regulations and Rigidity in Labor Laws Practice Required by Law INDIA CHINA U.S.A.

Standard work per day 9 hours 8 hours 8 hours

Severance pay for redundancydismissalof employee with 5 year tenure

10.7 week salary 21.7 week salary None

Severance pay for redundancydismissalof employee with 1 year tenure

2.1 week salary 4.3 week salary None

Premium pay for overtime 100% 50% 50%

Minimum wage (US$/month) 90 (INR 5000) 182.5 1242.6

Minimum rest while at work 30 minutes per 5 hour None None

Maximum overtime limit 200 hours per year 1 hour per day None

Government approval required for 9

person dismissal Yes No No

Government approval required for 1person dismissal Yes No No

Government approval forredundancy dismissal granted Rarely

[42][43] Not applicable Not applicable

Dismissal priority rules regulated Yes Yes No

Dismissal due to redundancy allowed?

Yes, if approved by government Yes, without approval ofgovernment

Yes, without approval ofgovernment

TRADE UNIONS
http://en.wikipedia.org/wiki/Severance_packagehttp://en.wikipedia.org/wiki/Minimum_wagehttp://en.wikipedia.org/wiki/Overtimehttp://en.wikipedia.org/wiki/Dismissal_(employment)http://en.wikipedia.org/wiki/Dismissal_(employment)http://en.wikipedia.org/wiki/Layoffhttp://en.wikipedia.org/wiki/Labour_in_Indiahttp://en.wikipedia.org/wiki/Layoffhttp://en.wikipedia.org/wiki/Layoffhttp://en.wikipedia.org/wiki/Labour_in_Indiahttp://en.wikipedia.org/wiki/Layoffhttp://en.wikipedia.org/wiki/Dismissal_(employment)http://en.wikipedia.org/wiki/Dismissal_(employment)http://en.wikipedia.org/wiki/Overtimehttp://en.wikipedia.org/wiki/Minimum_wagehttp://en.wikipedia.org/wiki/Severance_package


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About 7 per cent of the 400 million-strong workforce were employed in the formal sector(comprising government and corporates) in 2000 [54] contributing a whopping 60 per cent of

the nominal GDP of the nation. The Trade Unions Act of 1926 provided recognition andprotection for a nascent Indian labour union movement. The number of unions grewconsiderably after independence, but most unions are small and usually active in only onefirm.

In 1997, India had about 59,000 trade unions registered with the government of India. [55] Ofthese only 9,900 unions filed income and expenditure reports and claimed to represent 7.4

million workers. The state of Kerala at 9,800 trade unions had the highest number ofregistered unions, but only few filed income and expenditure reports with the governmentof India. The state of Karnataka had the fastest growth in number of unions between 1950sto 1990s.

In 1995, India had 10 central federations of trade unions, namely (arranged by number ofmember unions in 1980): INTUC, CITU, BMS, AITUC, HMS, NLO, UTUC, UTUC-LS, NFITU andTUCC. Each federation had numerous local trade union affiliates, with the smallest TUCCwith 65 and INTUC with 1604 affiliated unions. By 1989, BMS had become India's largestfederation of unions with 3,117 affiliated unions, while INTUC remained the largestfederation by combined number of members at 2.2 million. [55] The largest federation oftrade unions, INTUC, represents about 0.5% of India's labour force in organized sector andunorganized sector. In 2010, over 98% of Indian workers did not belong to any trade unionsand were not covered by any collective bargaining agreements.

Labor relations during 1950-1990
http://en.wikipedia.org/wiki/Labour_in_Indiahttp://en.wikipedia.org/wiki/Trade_unionhttp://en.wikipedia.org/wiki/Labour_in_Indiahttp://en.wikipedia.org/wiki/Keralahttp://en.wikipedia.org/wiki/Karnatakahttp://en.wikipedia.org/wiki/Labour_in_Indiahttp://en.wikipedia.org/wiki/Labour_in_Indiahttp://en.wikipedia.org/wiki/Karnatakahttp://en.wikipedia.org/wiki/Keralahttp://en.wikipedia.org/wiki/Labour_in_Indiahttp://en.wikipedia.org/wiki/Trade_unionhttp://en.wikipedia.org/wiki/Labour_in_India


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Besley and Burgess have studied the industrial relations climate in Indian statesover the 1958 1992 p eriod. They report that states which amended India'sIndustrial Disputes Act in a pro-worker, greater labour inflexibility manner sawmore labour relations problems, more lost man-days and experienced loweredoutput, employment, investment, and productivity in organized sector or formalmanufacturing. In these states, India's economic output grew primarily inunregistered or informal manufacturing where the worker has little to noprotections at all. Besley and Burgess also find that states that passed labour unionfriendly regulations witnessed greater increases in urban poverty over the 34 yearperiod, than states that did not enact additional pro-worker, greater labourinflexibility laws. [

Between 1950 and 1970, labour disputes nearly tripled in India, from an averageof 1000 labour disputes per year, to an average of 3000 labour disputes per year.The number of labour relations issues within a year peaked in 1973 at 3,370 labourdisputes. The number of workers who joined labour disputes within the same year,and stopped work, peaked in 1979, at 2.9 million workers. The number of lostman-days from labour relation issues peaked in 198 2 at 74.6 million lost man-days,or about 2.7% of total man-days in organized sector. [While the 1970s experienceda spike in labour unions and disputes, an sudden reduction in labour disputes wasobserved d uring 1975-1977, when Indira Gandhi, then prime minister, declared anemergency and amongst other things suspended many civil rights including theworker's right to strike. [
http://en.wikipedia.org/wiki/The_Industrial_Disputes_Act,_1947http://en.wikipedia.org/wiki/The_Industrial_Disputes_Act,_1947http://en.wikipedia.org/wiki/The_Industrial_Disputes_Act,_1947http://en.wikipedia.org/wiki/The_Industrial_Disputes_Act,_1947http://en.wikipedia.org/wiki/Labour_in_Indiahttp://en.wikipedia.org/wiki/Labour_in_Indiahttp://en.wikipedia.org/wiki/The_Emergency_(India)http://en.wikipedia.org/wiki/The_Emergency_(India)http://en.wikipedia.org/wiki/The_Emergency_(India)http://en.wikipedia.org/wiki/Labour_in_Indiahttp://en.wikipedia.org/wiki/The_Industrial_Disputes_Act,_1947


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Between 2004 and 2011, India has experienced adecline in unionized labour. The number of labourdisputes has dropped to 400 annually over the sameperiod, compared with over 1,000 in the 1990s.

The annual number of man-days lost to labourdisputes in early 1990s averaged around 27 million; by2010, while Indian economy has grown significantlyand Indian labour force has expanded, the averagenumber of man-days lost has dropped by about 30%.

The downward trend continues both in terms ofnumber of disputes and lost man-days per dispute. Forexample, India experienced 249 disputes in the first 5months of 2010, and 101 disputes in 2012 over thesame period.


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SOCIAL SECURITY ISSUES


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1. Social security, employment and development

It examines the role of unemployment insurance schemes, particularly in middle-income countries. Itthen discusses the potential benefits of limited employment guarantee schemes that could provide temporaryemployment for underemployed workers, mainly in poorer

2. Social security, employment and development

It takes stock of the various arguments about the social and economic effects of social security.It examines the role of unemployment insurance schemes, particularly in middle-income countries. It then discussesthe potential benefits of limited employment guarantee schemes that could provide temporary employment forunderemployed workers, mainly in poorer developing countries.

3. Contributing to gender equality

It reviews various ways in which social security can contribute to the attainment of gender equality. Mostsocial security systems were originally structured to cater for families with a male breadwinner. As a result ofchanging lifestyles, expectations and family structures, a large proportion of the population do not live in suchfamilies, which has added to the demand for gender equality.

4. Sustainable financing for social protectionIt suggests that the extension of social protection will require improved national financing as well as new

forms of financing at the local and global levels. At the national level, financing could be enhanced through better

collection of existing social security contributions and taxes.5. Expanding social dialogue

The prospects of decent social protection for all can be improved by broadening the underlying socialprotection partnership and galvanizing the social actors. Continuous social dialogue is needed for improving thecoverage of social security measures for not only the employees but also the general public.


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TOPIC-9

STRATEGIES OF PLANNING1 Jawaharlal Nehru strategy(1951): Agricultural Development and


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1. Jawaharlal Nehru strategy(1951): Agricultural Development andpoverty eradication.

2. Mahalanobis Strategy(1956) : Long term growth Industrialization

and production of Capital goods.3. Garibi Hatao Strategy(1969) Smt. Indira Gandhi: Reduction of

poverty and Inequality, Growth with Social Justice.4. Agricultural Development Led Growth (1985):Vakil and

Bramhananda: Production of wage goods and Creation of jobs.5. The New Development Strategy(1990-91): (Dr.Manmohan

Singh):Export-led Growth6. Redefining the role of the Government(10 th . Plan):(2002-07) Social

sector and infrastructure development.

7. Faster and more Inclusive Growth Strategy(11 th . Plan,2007-12)Growth with Equality of Opportunity.

8. Faster, Sustainable and more Inclusive Growth(12 th . Plan)(2012-17): More Employment and improving livelihoods.

12 TH. PLAN(2012-17) Targets:The Planning Commission has explored two alternative


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Targets:The Planning Commission has explored two alternativetargets for economic growth in the Twelfth Plan. The first is arestatement of the Eleventh Plan target of 9.0 per cent growth, which

has yet to be achieved. The second is an even higher target of 9.5 percent average growth for the Twelfth Five Year Plan.

Growth Vs Inflation: The emergence of inflationary pressure in theclosing years of the Eleventh Plan has drawn attention to the

possibility of a growth-inflation trade-off, raising concern whetheraiming for a higher rate of growth at this stage may further fuelinflation. This issue is best addressed by distinguishing between shortterm and medium term policy

Development of a Dynamic Private Sector . Implementation, Accountability and Governance. Natural Resource Management Water, Land and Forests. The Energy Challenge

Infrastructure Development

REDEFINING THE ROLE OF THE GOVT.


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Govt. as a Facilitator : It should indicate thedirections in which an Investor can pump hisinvestments. It should provide safeguards to theinvestor as well as to the consumer.

Govt. as a Regulator: It should act firmly as acontroller of trade and business. India passed anAct against Competition irregularities(CompetitionAct-2007)

Govt. as a Promoter and Partner: India hasdesigned policies for PPP and promoting by givingconcessions to private Investors.

TOPIC-10: IMPACT OF GLOBALISATION


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TOPIC 10: IMPACT OF GLOBALISATIONON INDIAN ECONOMY


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INDIAN ECONOMY AND GLOBALISATION

What is


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What isGlobalization?

Global industrialismor globalization is aprocess of forging internationalpolitical, economic, religious, andsocio-cultural interconnections

KFC Kuwait

7-11 Beijing

Growing Indian Economy


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GDP USD 590 billion

GDP growth rate 9%

Services contribution

54%Balance of Trade USD (-)46.2 billion

Investment goal USD 250 billion

2006

*: ProjectedSource: Economic Times & India Brand Equity Foundation (IBEF)

GDP USD 1.16 trillionGDP growth rate 9.5%

Services contribution 60%

Balance of Trade Negative balance should increase withsurging imports versus exports


2008 *

GDP USD 1.36 trillion

GDP growth rate 9%

Services contribution 60-65%

Balance of Trade

Negative balance should increase withsurging imports versus exports


2010 *

Growing GDP


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105 105 135 145 167

103 125204 231

287

682

191 237

398 453

0

200

400

600

800

1,000

1,200

1999-00 2002-03 2005-06 2006-07 2010*

U S D B i l l i o n

Agriculture Indus try Services

Contribution of Services -

increased from 48% to 62% andis estimated to contribute 60% by 2010

*: ProjectedSource: India Brand Equity Foundation (IBEF)

GrowingExpor ts


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*: ProjectedSource: Ministry of Commerce & IBEF

83.5

103.1

126.3

155

200

50

90

130

170

210

U S D

B i l l i o n

2004-05 2005-06 2006-07 2007-08* 2008-09*

Growing Expor ts

GrowingI mports


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Source: Ministry of Commerce & IBEF

Growing I mports

111.5

149.1

185.7

210.8

50

100

150

200

250

U S D

B i l l i o n

2004-05 2005-06 2006-07 2007-08 (Apr-Feb)

I ncreasing F orex Reserves


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India's Forex Reserves: 2001-08 (Till 14 March 2008)

54

75112

141 152

199

306

0

50

100

150

200

250

300

350

2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08(Till 14

March 08)

U S D

B i l l i o n

Steadily increasing Forex reserves offer adequate security against anypossible currency crisis or monetary instability

Source: Reserve Bank of India & India Brand Equity Foundation (IBEF)

GrowingF DI I nfl ows


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Growing F DI I nfl ows

* ProvisionalSource: Department of Commerce

8.9

22

30

4.3 6

0

5

10

15

20

25

30

35

2003-04 2004-05 2005-06 2006-07* 2007-08*

U S D

B i l l i o

Electronic equipment, manufacturingand telecom have witnessed significant

FDI inflow

India is ranked second in AT KearneysFDI confidence index (2007)

I ncreasing Per Capita I ncome


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Source: India Brand Equity Foundation (IBEF) & Economic Survey 2007-08

460

7971021

2000

4000

0

500

1000

1500

2000

2500

3000

3500

4000

U S D

2000-01 2006-07 2007-08 2016-17 2025

Major M&A and Investments Announcements in India


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USD 1.7 billionPlans to spend on its development operations in

India over the next four years

USD 2 billion

Plans to establish three manufacturing plants to

produce photo-voltaic units

USD 12 billionPOSCO to invest in building steel manufacturing

plants and facilities in India by 2016

Source: India Brand Equity Foundation (IBEF)

d
http://www.signetsolar.de/index.htmhttp://en.wikipedia.org/wiki/Image:Microsoft_logo.png


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Main sectors :

Main Destinations :

China, UAE, UKNorth America is emerging as a destination.

I ndia I nc. I nvesting Overseas

Auto Components IT Beverages Metals Cosmetics Mobile Communications Energy Pharmaceuticals Financial Services Software Industrial Goods


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Indias Trade with USA

Imports from USExports to US

Source: Department of Commerce, Govt of India

11.4

5

13.7

7

17.3

9.4

18.8

11.7

0.0

5.0

10.0

15.0

20.0

2003 - 04 2004 - 05 2005 - 06 2006 - 07

U

S D

B i l

l i o n


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M ajor I tems Exported to USA (2006)

Textiles

36%

EngineeringGoods &

Machinery15%

OrganicChemicals

6%

Iron & Steel5%

Cut andpolished

diamond & jew ellery

38%

Source: US Department of Commerce


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TOPIC-11:FOREIGN TRADE POLICY-2009


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INDIAS FOREIGN TRADE POLICY 2009 -14

What is Foreign Trade Policy?


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What is Foreign Trade Policy?

The Union Commerce Ministry,Government of India announcesthe integrated Foreign TradePolicy FTP in every five year. This

is also called EXIM policy. Thispolicy is updated every year withsome modifications and newschemes. New schemes comeinto effect on the first day offinancial year i.e. April 1, everyyear. The Foreign tradePolicy which was announced onAugust 28, 2009 is an integratedpolicy for the period 2009-14.


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Objectives of Foreign Trade Policy 2009 14


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Objectives of Foreign Trade Policy 2009-14

4. Simplification of the applicationprocedure for availing variousbenefits

5. To set in motion the strategies andpolicy measures which catalyse thegrowth of exports

To encourage exports through a "mixof measures including fiscalincentives, institutional changes,procedural rationalisation and effortsfor enhance market access across theworld and diversification of exportmarkets.

Aim in General


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Aim in General

The policy aims at developingexport potential, improvingexport performance, boostingforeign trade and earningvaluable foreign exchange. FTPassumes great significance thisyear as India's exports have beenbattered by the global recession.

A fall in exports has led to theclosure of several small- andmedium-scale export-orientedunits, resulting in large-scaleunemployment.

Targets


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Targets

Export Target : $ 200 Billion for2010-11

Export Growth Target: 15 % fornext two year and 25 %thereafter.

Indias exports in 2010 -11 are251B$, and in 2011-12 304B$

Indias Imports in 2010 -11 are370B$, and in 2011-12---489B$

EXPORT DEVELOPMENT INITIATIVES


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EXPORT DEVELOPMENT INITIATIVES

Announcements for EDI Initiatives

Export Promotion Councils & Commodity Boards have been advised toissue RCMC through a web based online system.

It is expected that issuance of RCMC would become EDI enabled beforethe end of 2009.

Set up of Directorate of Trade Remedy Measures Announced

A Directorate of Trade Remedy Measures shall be set up, which will enablesupport to Indian industry and exporters, especially the Micro Small &medium Enterprises MSMEs in availing their rights through trade remedyinstruments

IMPORT POLICY


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IMPORT POLICY

Duty Credit Scrips Earlier the payment of customs duty for Export Obligation (EO)

shortfall under Advance Authorisation , DFIA or EPCG Authorisation wasallowed in cash only. Now this payment can be done in the way of debit ofDuty Credit scrips.

Import of Restricted Items Restricted Items can be imported now (as replenishment) against

transferred DFIAs (Duty Free Import Authorisations) as the present DFRC(Duty Free Replenishment Card) scheme.

Dollar Credits There is a provision for state-run banks to provide dollar credits

TOPIC-12: FOREIGN DIRECT


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INVESTMENT IN INDIA

INTRODUCTION


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INTRODUCTION

Foreign Direct Investment , or FDI, is a type of investment thatinvolves the injection of foreign funds into an enterprise thatoperates in a different country of origin from the investor.

It usually involves participation in management, jointventure, transfer of technology and expertise.

FDI can be classified:Inward FDI and Outward FDI


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Fdi benefits


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Fdi benefits

EconomicGrowth

Trade

Employmentand skill levels

Technologydiffusion andknowledge

transfer

Linkages andspillover to

domestic firms

Objectives of the PRESENTATION


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j

The objectives of this Presentation are:

To study the trends and patterns of flow of FDI.To explore the sector wise distribution of FDI inflows inorder to point out the dominating sector which has attractedthe major shareTo assess the determinants of FDI inflows.To evaluate the impact of FDI on the Indian Economy.

SOURCES OF DATA


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SOURCES OF DATA

The required data have been collected fromvarious sources i.e. Asian Development

Banks Reports, various Bulletins of ReserveBank of India, publications from Ministry ofCommerce, Govt. of India, Economic andSocial Survey of Asia and from websites ofWorld Bank, IMF, WTO, RBI, UNCTAD etc.

AMOUNT(in US $ bn) FDI INFLOWS IN INDIA


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0

5

10

15

20

25

30

2005-06 2006-07 2007-08 2008-09 2009-10

YEARS

Top investing countries


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Top investing countries

53%11%

9%

7%

5%4% 4% 3%

2%2% Mauritius

Singapore

USA

UK

Netherlands

Japan

Cyprus

Germany

UAE

France

Sector wise distribution


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Sector wise distribution

31%

13%12%

11%

10%

6%

6% 4% 4%3%

Services Sector

Computer Software &hardwareTelecommunications

Housing & real Estate

Construction Activities

Power

Automobile Industry

Metallurgical Industries

Petroleum & Natural Gas

Chemicals


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conclusions


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The increased flow of FDI in a country has given a major boost tothe country's economy.

FDI has provided better access to technologies for the local

economy.

FDI has lead to indirect productivity gains through spillovers.

Multinational firms have increased the degree of competition inhost-country markets which will force existing inefficient firms toinvest more in physical or human capital.

Service sector has been the most sought after sector in India


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Service sector has been the most sought after sector in Indiafor Foreign Direct Investments.

India, with its skilled labor and manpower has the potentialto overtake China as the most preferred destination forForeign Investments.

Hence measures must be taken in order to ensure that theflow of FDI in our country continues to grow.

TOPIC-13:ENVIRONMENT AND POLLUTIONCONTROL POLICY


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CONTROL POLICY


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E i t l P li


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Environmental PolicyIn India

The Role of Judiciary in Imparting EnvironmentalJustice

122

The Under lying Causes of


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Environmental Degradationin I ndia

Social FactorsEconomic Factors

Institutional Factors

123


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Social F actors

PopulationPoverty

Urbanization

124

Economic F actors


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Non-existent or poorly functioning marketsfor environmental goods and services

Market distortions created by pricecontrols and subsidies

The manufacturing technology adopted bymost of the industries which generally isbased on intensive resource and energy use.

Expansion of chemical based industryGrowing transport activities

Expansion of port and harbour activities.125


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I nstitutional F actors

Lack of awareness and infrastructure makes

implementation of most of the laws relating to

environment, extremely difficult and

ineffective.

126

Environmental Policy I n I ndia


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Ancient India

The Arthashastra by Kautilya, written as

early as between 321 and 300 BC,

contained provisions meant to regulate anumber of aspects related to the

environment.

The fifth pillar edict of Emperor Ashoka

also contains such regulations127


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During the British Reign in India:Shore Nuisance (Bombay and Kolaba) Act, 1853

The Indian Penal Code, 1860The Indian Easements Act, 1882The Fisheries Act, 1897The Factories Act, 1897

The Bengal Smoke Nuisance Act, 1905The Bombay Smoke Nuisance Act, 1912The Elephants Preservation Act, 1879Wild Birds and Animals Protection Act, 1912

128



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Modern India

National Council for Environmental Policy and

Planning was set up in 1972 which was later

evolved into Ministry of Environment and Forests

(MoEF) in 1985.

MoEF and the pollution control boards (CPCB

i.e. Central Pollution Control Board and SPCBs

i.e. State Pollution Control Boards) together form

the regulatory and administrative core of the

sector129


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Environmental Policy I n I ndiaThe Policy Statement for Abatement of Pollution and the

National Conservation Strategy and Policy Statement on

Environment and Development were brought out by the

MoEF in 1992.

The EAP (Environmental Action Programme) was

formulated in 1993 with the objective of improving

environmental services and integrating environmental

considerations into development programmes.130

Environmental Policy I n I ndiaNational Environment Policy, 2006


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National Environment Policy, 2006 It the first initiative in strategy-formulation for

environmental protection in a comprehensive

manner.

It undertakes a diagnosis of the causative

factors of land degradation with a view to

flagging the remedial measures required in this

direction.

It recognizes that the relevant fiscal, tariffs and

sectoral policies need to take explicit account of

their unintentional impacts on land degradation. 131



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National Environment Policy, 2006 (contd.)

The solutions offered to tackle the problem

comprise adoption of both, science-based and

traditional land-use practices, pilot-scaledemonstrations, large scale dissemination,

adoption of Multi-stakeholder partnerships,

promotion of agro-forestry, organic farming,

environmentally sustainable cropping patterns

and adoption of efficient irrigation techniques.132


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Constitutional F ramework

Article 21 - Fundamental Rights

Article 48A - Directive Principles of StatePolicy

Article 51A(g) - Fundamental Duties

133

L egislative F rameworkWater(Preventi onandContr olofPolluti on)Act 1974


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Water (Preventi on and Contr ol of Polluti on) Act, 1974

Water (Preventi on and Contr ol of Polluti on) Cess Act,

1977 Ai r (Prevention and Control of Pollution) Act, 1981

Atomic Energy Act of 1982

M otor Vehi cles Act ,1988

The Wildli fe (Protection) Act, 1972

The F orest (Conservation) Act, 1980

Environment (Pr otection) Act, 1986 (EPA)

The National E nvir onment Appellate Authority Act,1997

Publi c Liabili ty I nsurance Act (PLI A), 1991

National Environment Tribunal Act, 1995134


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Environment I mpact Assessment (EI A)

There are two types of EIA models - the statutory model

which makes the assessment of impact compulsory underan enacted law, or a delegated legislation, and the

administrative model under which an administration

exercises its discretion to find out whether an impact study

is necessary. Till 1992, India was following the

administrative model of EIA.135


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Environment I mpact Assessment (EI A) (contd.)

On 27 th January, 1994 a notification was issued dealing with

mandatory EIA. The notification requires project proponent to

submit an EIA report, and environment management plan,

details of the public hearing and a project report to the impact

assessment agency for clearance, further review by a committee

of experts in certain cases. By the amendment in the year 1997,

public hearing was made compulsory before impact assessment

was finalized136

Role of Judiciary in I mpar tingEnvironmental Justice


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The Judiciary has come up with the judge -

driven implementation of environmental

administration in India.

It has isolated specific environmental law

principles upon interpretation of Indian

Statutes and Constitution.

Public Interest Litigations (PILs) which is the

result of the relaxation of the locus standi rules

by the judiciary, is the characteristic feature of

the environmental litigation in India. 137

Role of Judiciary in I mpar tingEnvironmental Justice


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Disputes relating to environment are treated

as cases related to violation of fundamental

rights, rather than claims under law of torts.

It has been held that the Supreme Court and

the High Courts can be directly approached

under Article 32 and Article 226 of the

Constitution of India in case of matters relating

to environment.

138


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Role of Judiciary in I mpar tingEnvironmental Justice (Contd.)

The orders of the Supreme Court and the High Courts cover a

wide range of areas including air, water, solid waste, hazardouswastes, forests, mining activities, and architectural treasures.

Policy Statements of the government, which otherwise are not

enforceable in Courts, have been used as aids by the Judges forinterpreting environmental statutes and for spelling out

obligations of the Government.139


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140

Doctr ines Evolved byCourts

1. Public Trust Doctrine

2. Precautionary Principle3. Polluter Pays Principle

4. Absolute LiabilityPrinciple5. Sustainable Development

Doctr ines Evolved by Cour ts:


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Public Trust Doctrine:

M.C.Mehta v. Kamal Nath, (1996) 1 SCC 38:I n a case where an attempt was made to diver tflow of a river for augmenting facilities at a

motel, it was held that State and itsinstrumentalities as trustees have a duty toprotect and preserve natural resour ces.

MI Builders Pvt. Ltd. v. Radhey Shyam Sahu,AIR 1996 SC 2468: a city development authoritywas asked to dismantl e an underground marketbui lt beneath a garden of hi storical impor tance.

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Precautionary Principle:

Vellore Citizens Welfare Forum v. UOI, AIR 1996 SC 2718: The pri nciple was adopted to check polluti on of undergroundwater caused by tanneries in Tamil Nadu.

Narmada Bachao Andolan v. UOI, AIR 2000 SC 375: TheSupreme Cour t held that the precauti onary pri nciple could not beapplied to the decision for bui lding a dam whose gains and losseswere predictable and cer tain.

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Polluter Pays Principle:


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Polluter Pays Principle:

The object of thi s pri nciple is to make the polluter

l iable for the compensation to the victims as also

for the cost of restoring of environmental

degradation.

Vellore Citizens Welfare Forum v. UOI, AIR

1996 SC 2718: I t was held that the precauti onary

principle and the polluter pays principle are par t

of environmental law of the country.

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Sustainable Development:


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Sustainable Development:

M.C. Mehta v. UOI, AIR 1997 SC 734 (TajTrapezium Case) : while taking note of thedisastrous effects that the emissions from theM athura Oil Ref inery had on the Taj M ahal, the

Supr eme Cour t applied the pr inciple of sustainabledevelopment to the case, and apar t f rom passingvarious directions, stepped in to execute andsupervise the resultant actions .

State of Himachal Pradesh v. Ganesh WoodProducts, AIR 1996 SC 149 , the Supreme Cour tinvali dated forest based industr y, recognizing theprinciple of inter-generational equity and

sustainabledevelopment145


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Contr ibution of the Delhi H igh Cour tDirections have been passed by the High Court in various PILs

for clearing the river Yamuna of all encroachments and for

demolition of the slums on its banks.

In Enkay Plastics Pvt. L td. Vs. Union of I ndia (UOI ) and Ors.,

2000(56)DRJ828 , the High Court upheld the order of the Delhi

Pollution Control Committee for closure of certain polluting

industries, and held that the direction of close down the industry

which is creating air pollution in residential areas. 147

Contr ibution of the Delhi H igh Cour t In the case of Vimal Bhai v. UOI & Ors.,


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(W.P.(C) 17682/2005, W.P.(C) 17683/2005, W.P.(C)

17684/2005 decided on 29.5.2005 ), the Union of

India and all its concerned functionaries were

directed to take requisite steps for clearing the

proposals related to the appointment of the

Chairman of the Appellate Authority and other

Technical Members and reconstitute the

Authority within 45 days, under the National

Environment Appellate Authority Act, 1997.

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POVERTY ESTIMATIONTOPIC-14

1. Head-Count Ratio (HCR)


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Head-Count Ratio is the proportion of households (or)population deriving less than the poverty line income.It is frequently expressed as a percentage of totalhouseholds.

HCR = (q/n) X 100 Where, q = the no. of persons below the poverty line n = the total population including non-poor For Ex: There are four persons with

incomes:100,200,300,400 and poverty line=300 HCR = 2/4 X 100 = 50%

2. The Poverty Gap Ratio(PGR) Th t g t th g di t b t


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The poverty gap represents the average distance betweenthe poverty line and the actual income of the poor, usingtotal population in calculating the average and expressingthe average as a percentage of the poverty line.

PG = (1/n) [(Z-Yi)/Z] x100Where, PG = the Poverty Gap

Z = the poverty LineYi = the income of the poor personn = the total population including non-poor

For the above example, the estimate of poverty gap comesto 25%.

PG = 1/4 [((300 100)/300 + (300 200)) / 300] x 100= 1/4 x (1/3+2/3) x 100 = 25%


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Square Poverty Gap (SPG)


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Person Per Capita Monthly

Income (Z-Yi)/Z

[(Z-Y)/Z] 2

1 100 2/3 4/9

2 200 1/3 1/9

3 300 -

4 400 -

(Z-Y t)2 = 5/9

PGR=1/4(2/3+1/3)*100=1/4(1)*100=25%

SPG = (1/4 x 5/9) x 100=(5/36)*100= 13.88 = 13.9%


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THANK YOU

A Review of Sylabus

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