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Qualitative and Quantitative Control measures of Rbi Upsc

RBI ( Reserve Bank of India)

rbi — Qualitative and Quantitative measures of Rbi Upsc

It was set up in 1935 by virtue of the RBI act, 1934. It was set up as a private bank but was nationalized on January 1, 1949.

The Banking Regulation Act was also passed in 1949. RBI acts as a government bank for both central and state governments. RBI acts as an agent of the government in respect of India’s membership of the IMF and manages the borrowing programme of the government.

Performs several developmental and promotional programme of the government and implements India’s monetary policies.

However in the union budget 2007-2008 the government has proposed the setting up of an independent, Debt Management Office (DMO) in line with the practice in other countries so that hereafter the government’s borrowings programme will be managed by DMO, not by RBI.

RBI has promoted several apex organizations in India (SBI, UTI, IDBI, NABARD, NHB). RBI is the sole authority to issue currency in the country.

It issues two rupee notes and above while One Rupee & subsidiary coins are issued by the Ministry of Finance but distributed by the RBI on behalf of the government.

It issues currency on the basis of the Minimum Reserve System (MRS). To maintain the adequate supply of money in the economy the RBI prints the money as per the Minimum Reserve System.

Under the Minimum Reserve System, the RBI has to keep a minimum reserve of Rs 200 crore comprising of gold coin, gold bullion, and foreign securities/currencies.

Out of the total Rs 200 crores, Rs 115 crore worth gold either in the form of gold coins or gold bullion and 85 crores in the form of foreign securities/ currencies.

Against the backing, RBI can issue an unlimited amount of Currency in the country, as it issues according to the projections of GDP.

The currency we are using is Token Currency which has zero internal value and the face value is much higher as it is promised by the government and is also known as Fiat currency.

It is the Governments Bank and it is the Bankers Bank. It is the guardian of the money market. ( Money market comprises of all financial institutions that deal with short term funds whereas capital markets are in Long term funds).

The Indian money market can be divided into Organized and Unorganized. The unorganized money market consists of indigenous money lenders. The organized money market is Banks.

Banks are divided into Commercial Banks, Regional Banks, and State, Co-operative Banks.

RBI is the sole custodian of foreign exchange reserves of the country. It manages these reserves on a day-to-day basis. That is no bank in the country can do the transaction in foreign currency without having a license from the RBI.

At the end of every day, the dealer has to report to the RBI, up to 90-92 the exchange rate was determined by RBI, now it is not. It is the controller of credit given by the bank to various sectors of the economy.

It controls credits by adopting the following two sets of measures, one is Quantitative measure and another one is Qualitative measures also selective measures.

Quantitative measures are measures aimed at controlling and regulating the overall quantum or volume of credit (i.e Loans) given by commercial banks to various sectors of the economy while Qualitative measures are those aimed at controlling not only the Quantum but also the purpose for which the loans are given by banks to various sectors of the economy.

Eg: Rice Production, Milk Production.

Quantitative measures of Rbi

Bank Rate(BR), Cash Reserve Ration also Variable Reserve Ration (CRR), Open Market Operation (OMO), Statutory Liquidity Ration (SLR)

Bank Rate

It is the rate of interest at which the central bank of a country such as RBI provides refinance or discounting facilities to commercial banks, State governments, Central Government, NBFC, etc.

In other words, it is the rate of interest at which RBI provides financial accommodation to commercial banks.

The rate of interest is by March 2019 is 6.5% and now stands at 6.25%. When this rate is raised it is called Dear Money Policy. When this rate is lowered it is called the Cheap Money Policy.

This rate may generally be raised during a period of inflation. It may be lowered during the period of Recession (Dear is costly).

Cash Reserve Ratio(CRR)

It is the ratio of the total deposits of a bank which it needs to keep with the central bank if a country at any given point in time.

This ratio is at present is 5%. Generally, it may be raised in the time of inflation and lowered in the time of recession.

When it is raised it is called a policy of Credit Squeeze or Tight Money Policy and when it is lowered it is called Liberal Credit Policy.

CRR is announced twice a year, once is the end of April and by the end of October.

Busy Season -> Harvesting-> October to April-> Raise CRR

Lean Season->Sowing->May to October->Lower CRR

3. Statutory Liquidity Rate(SLR)

SLR is the ratio of the total deposits of the bank in India which it has to maintain in the form of liquid funds i.e in the form of Cash in Hand and Government securities.

The present SLR is 21.50% that includes Liabilities-Deposits; Assets-Loans given by banks. “Government securities are called ‘Guilt Edged Security: Least Risk’ “. Even the bonds of Tata and Reliance etc are Guilt Edges Securities.

Short-term Securities are called as T-Bills (Max of 1 year). Long Term securities are called Dated Bills(Greater than 1 year).

According to the Banking Regulation Act 1949, CRR to be 3% to 15% and SLR to be 25% to 40%.

4. Open Market Operations (OMO)

The open market operation is conducted by the central bank of any country under which from time to time it may buy government securities from commercial banks or sell securities to commercial banks.

Generally, it may sell securities during a period of Inflation and it may buy securities during a period of Recession

REPO

Repo means Repurchase options/ Auction exercised by the RBI in India since 1992 for the first time, to even out short-term fluctuations in the money market.

Hence, Repo is essentially a short-term operation conducted to manage the supply and demand for liquidity in a short period under the RBI’s liquidity Adjustment Facility programme.

Repo means that Reserve Bank repurchases some government securities for a very short period(7-day repo, 14-day repo, etc) from commercial banks and thus injects liquidity into the system.

In other words, it is lending to commercial banks and this repo rate at present is 4.40%.

Reverse Repo

RBI sells short-dated securities and borrows money from Commercial Banks so as to Absorb Liquidity which is excess in the market for a short period. The Reverse repo rate at present is 6%.

Qualitative measures of rbi

Rationing of Credit
Regulation of Credit for consumption Purposes.
Variation of Margin Requirements
Moral Suasion
Direct Action

1. Rationing of Credit

Under this method, the RBI directs banks to give credit in accordance with the importance of various sectors in the economy from time to time.

For eg. It has directed banks that they must give 40% of their total credit at any time to the priority sector as identified by the RBI which consists of sectors like Agriculture, Small Scale, Road and Water Transport, Retail Trade, Low-cost Housing, Poverty alleviation, Employment Generation, etc.

18% of total credit has to go to Agriculture etc.

2. Regulation of Credit for Consumption Purpose

Under the measure of RBI which direct banks to restrict credit for the purchase of consumer durables like TV, Fridge, etc, and instead give more credit for productive purpose as too much of consumer credit fuel inflation.

3. Variation of Margin Requirement

Under this method, the RBI directs banks from time to time to vary (raise or lower) margins on loans given by banks particularly for sensitive and essential commodities in order to prevent speculation, hoarding, black marketing, etc.

RBI has often done it for food grains and other essential commodities by directing banks to raise margins. Eg: Wheat Trader, Cement Manufacturers.

4. Moral Suasion and Direct Action

Under this method, RBI urges commercial banks to help in controlling the supply of money in the economy.

Conclusion

This post is written on the topic ‘RBI or Reserve Bank of India’ and its operations such as Quantitative and Qualitative measures etc for Upsc, Tnpsc and other state service exams.

Economics Notes Links

Economic Topics

1.Human Development Report and Indices

Physical Quality Life Index (PQLI) Technology Achievement Index(TAI) Gender Development Index(GDI) Human Poverty Index(HPI ) Human Development Index(HDI)

2. Poverty and Unemployment

3. Banking

RBI
Commercial Banks
Monetary

4. Fiscal / Budgetary Policy

Revenue
Expenditure
Recommendation of the 125 th finance commitee.

5. Inflation- 6. Stock Market 7. Foreign Investment 8. Wto 9.Imf 10. Non banking financial corporation 11.Agriculture

Poverty alleviation and employment generation programmes in India Upsc

Who are poor in India?

As per the planning commission or Niti Ayog, A person who does not get a calorie intake of 2400 kilo (KCL) in rural and 2100 kcl in urban is called Poor.

The calories of rural are higher than urban because rural people do more manual work than urban people.

To get these energies from food, pulses, vegetable, etc, the person needs some money to but this person is unable to buy due to lack of money, job. This is said to a person below the poverty line or just poor.

Based on the above criteria about 27 crore people, that 27.5% of people in India in 2004-05 are poor if we considered food as a tool to measure poverty.

But if we measure poverty based on Clothing, shoe, and other non-food items then more than 37%, 37 crore people in India are poor.

Reasons for Unemployment

Employment not doing well in India.

The majority of the population willing to work is unemployed, Poor growth of Industries, Poor Education and Training

Overdependence on agriculture and seasonal employment.

The labor force of the country is estimated to be 43 crores in the age group of 15 to 59 years. Approximately 8% that is 3 to 4 crores are unemployed daily.

Poverty alleviation and employment generation programmes in India

To overcome poverty due to unemployment various Schemes and programmes were introduced by the Union Government.

The Mahatma Gandhi National Rural Employment Guarantee Scheme

(MGNREGS)Launched in 2006, Provides 100 days of guaranteed employment to the rural population in a year.

Any adult in a rural area can be employed in this program on a daily wage basis. In 2010, about 4.1 crore households benefited from this programme.

Swarnjayanti Gram Swarozgar Yojana (SGSY)

Launched in April 1999, it aims to create income generation through self-employment, aimed at SC and ST population, Women, etc.

The beneficiaries are given training and a bank loan to build capabilities to overcome poverty. These Self-employed people are Swarozgaris.

In order to give training, the Rural self Employment Institute(RSETI) was set up in each district.

Swarna Jayanti Sahari Rozgar Yojna (SJSRY)

sjsry objectives

Launched in April 1999, Providing employment for the urban poor.

A new thing was added to the scheme in 2009 such as Generation of self-employment, programs for urban women, training for the urban poor, community development programme, and wage employment programme.

As of December 2010 more than 6.5 Lakh families in urban benefited.

Schemes to Promote and Provide Education

Right of children to free and compulsory education Act 2009.

Free education for children aged 6 to 14, is made a fundamental right in 2009 and made effective from April 2010.

Schemes for elementary and secondary education

To develop primary and secondary education are:

Sarva Siksha Abhiyan (SSA)

To enforce the Right to Education, this scheme is introduced by the central government with the state government to give education to children aged between 6 to 14.

The idea of this program is:

Enrollment of all children in School. To make sure the children study up to the upper primary level.

Making the dropouts come back to school. Eradication of gaps such as religion, gender, caste, etc in providing education

As of 2010, more than 309727 new schools and 11 lakh teachers are appointed. More than 9 crore students were given textbooks.

For education for Girls, a National Programme for education for girls at the elementary level (NPEGEL) is implemented.

In this scheme, free uniforms and study materials, etc are given to girl students and the teacher are trained specially to teach the girls.

Residential schools for Girls have also been set up called Kasturba Gandhi Balika Vidyalayas (KGBV’s) under the Sarva Siksha Abhiyan scheme.

More than 75% of girls admitted under Kasturba Gandhi Balika Vidyalayas are from Scheduled and tribes, OBC, and minorities.

And remaining girl student is from Below Poverty Line families. As of 2010 more than 2 Lakh girls are under this scheme.

The national programme of Mid-day meals in Schools

To make children come to school and to minimize the drop out due to hunger the government started a Mid-day meal programme.

To provide a healthy diet to children in school for free and to bring different societies of people together and make them a sense of oneness.

This programme provides food for more than 14 crore children as of 2009.

Rashtriya Madhyamik Shiksha Abhiyan (RMSA)

Launched in 2009 to increase the enrollment ratio in the school.

75% of total expenditure comes from the central government and 25 % from the state government but in the case of Northeast states 90% of funds are from the central government.

Inclusive education for the disabled at the secondary stage (IEDSS)

Came into effect in 2009-10, its motive is to give special children, 100% central assistance for education from class 9 to 12.

Saakshar Bharat

To provide education for adults above 15 years of age and to national literacy. The women are of special focus in this program.

Programme for Higher and Technical Education

To aim to provide higher and technical education such as Medicine, Engineering, Science, Information Technology, etc after Higher secondary education.

GOI has taken several measures to improve higher education such as:

As per the 11th Five Year Plan, 8 new universities and 10 new engineering colleges with assistance from state governments. In educationally backward districts, the new model colleges will be built.

20 more IITs will be set up to promote IT education. More NIT and IIT are to be built across the nation.

IISER(Institute of Science Education and Research) is to be set up in various parts of the country to promote research in science.

IIMS (Indian Institute of Management) to be set up in more numbers across the nation.

Health care

Another major problem in poverty is health care, to provide better health care to its people is the major challenge to the government.

Due to poor facilities in the nation, about 254 females out of 100000 die at the time of pregnancy. This is called the Maternal Mortality rate(MMR).

50 Infants die during birth out of 1000, this Infant mortality rate (IMR). 15 out of 1000 die before the age of 4 which is CMR (Child Mortality Ration).

India spends only 5% of total expenditure on health, 1.27% of National Income.

National Rural Health Mission (NRHM)

Launched in 2005, to provide affordable health services in Village areas. It aims to improve health and family welfare programmes by improving the public health delivery system.

By September 2010, about 8 lakh health workers have given training and more than 9 Thousand doctors and 26 thousand nurses are appointed in a rural area either On a contract and permanent basis.

NRHM also runs Mobile medical units (MMU) to give health care at the doorstep.

Janani Suraksha Yojana (JSY)

This programme is started to provide life-saving treatment to the mother at the time of delivery.

Pradhan Mantri Swasthya Suraksha Yojana (PMSSY)

To provide health infrastructure in all the states, six new AIIMS hospitals are to be constructed in different parts of the country and also upgrading 12 existing government medical colleges in different states.

National AIDS Control

As of 2009, 24 lakh people were affected by AIDS in the country which is the highest in the world.

The government has created centres to make people aware of the prevention of AIDS as well as to treat the patients.

Inflation Control or Price Rise Control

Demand, Drought, and Hoarding increase the price of essential commodities.

In order to control the price rise in the essential commodities, the government takes various measures: Providing Seeds, Fertilizers, Pesticides, etc at subsidized prices and providing free electricity that helps farmers, Building storage facilities, and Strict action on Hoarding.

Physical quality of life index Upsc

Pqli was developed and originally conceived by Jan Tinbergen who is the first noble economics laureate in the mid-1970s. Prepared every year by the overseas department council by Morris David Morris, a private US agency.

Morris David Morris created Pqli that assessed the condition in the nation from factors such as Life Expectancy, Basic Literacy rate, and infant mortality rate.

How is PQLI Constructed?

The index is based on 3 parameters:

Life Expectancy
Infant Mortality
Literacy

Countries are ranked on an index value of 1-100 for each of these three and it has been observed that countries having higher per capita income are generally on higher ranking and value of the index.

Most developed countries are found to be having PQLI values over 90 while developing countries on average are below 40.

Some developing countries have a much higher index value above 80 though their per capita income is low which shows that they have used their resources for the better life of their people.

If the indicators of life expectancy and literacy rate are positive, the performance in Pqli is maximum and the worst is the minimum.

Limitation of Pqli

Pqli does not take into account many factors such as employment, income, justice, social security etc. It just takes the average of Literacy, Life expectancy and infant mortality.

According to Ray(2008), Human Development Index (HDI) works better than Pqli. This is because HDI takes both the physical as well as the financial attributes of development.

FAQ

1. Pqli was developed by?

PQLI(Physical Quality of Life Index) was developed by economist Morris David Morris and his colleagues at the US Overseas Development council.

2. What is the Value of PQLI?

The value of Pqli lies between 0-100. Higher is good and lower is worst.

3. What is the difference between HDI and PQLI?

HDI and Pqli are almost similar. The main difference is there is an inclusion of income in HDI and income is excluded in Pqli. HDI represent both the physical and financial attributes. On the other hand, Pqli only take the account of physical aspects.

Reference

https://link.springer.com/referenceworkentry/10.1007/978-94-007-0753-5_2164

Technology Achievement Index 2020 Upsc

Technology achievement index

Technology achievement index is an index that calculates the country’s skills with respect to the latest technologies such as working, innovation, etc.

This index was introduced in the HDR for the year 2001 by UNDP (United Nations Development Programme) to calculate the capacity of a nation to create or innovate technology, diffuse technology structuring, or form of human skill base.

It is in view of the growing interdependence between technology and its impact on human development i.e how we make use of technology that furthers human development.

Technology Achievement Index 2020 Upsc — Technology Achievement Index By Julia.Roesler – Own work, CC BY-SA 4.0, https://commons.wikimedia.org/w/index.php?curid=109373972

TAI (Technology Achievement Index) is constructed as follows:

Creation of Technology
Diffusion of Technology
Formation of Human skills base

The creation of technology is determined by:

Number of Patents per capita (The USA has the highest number of patents), and Royal and licenses fees received per capita

Diffusion of Technology is determined by

1. Diffusion of Recent Innovations

A number of Internet hosts per capita. Share of High also medium technology goods exports in the total export of a nation.

2. Diffusion of Old Innovations

Mean ages of schooling, Gross tertiary level enrollment in science, engineering, and mathematics.

Finland is first in the diffusion of Technology.

TAI can be measured by, Leaders, Potential Leader or Future Leaders, Dynamic Adopters and Marginalized

Technology achievement index 2020

The technology achievement index was last updated in 2013. TAI 2020 is yet to release

TAI Rank	Country	TAI Value
1	Finland	0.744
2	USA	0.733
3	Sweden	0.703
4	Japan	0.698
5	Korea Rep	0.666
6	Netherlands	0.630
7	United Kingdom	0.606
8	Singapore	0.591
9	Canada	0.589
10	Australia	0.587
11	Germany	0.583
12	Norway	0.579
13	Ireland	0.566
14	Belgium	0.553
15	New Zealand	0.548
16	Austria	0.544
17	France	0.535
18	Israel	0.514
19	Spain	0.481
20	Italy	0.471
21	Czech Republic	0.465
22	Hungary	0.464
23	Slovenia	0.458
24	Hong Kong	0.455
25	Slovakia	0.447
26	Greece	0.437
27	Portugal	0.419
28	Bulgaria	0.411
29	Poland	0.407
30	Malaysia	0.396
31	Croatia	0.391
32	Mexico	0.389
33	Cyprus	0.386
34	Argentina	0.381
35	Romania	0.371
36	Costa Rica	0.358
37	Chile	0.357
38	Uruguay	0.343
39	South Africa	0.340
40	Thailand	0.337
41	Trinidad and Tobago	0.328
42	Panama	0.321
43	Brazil	0.311
44	Philippines	0.300
45	China	0.299
46	Bolivia	0.277
47	Colombia	0.274
48	Peru	0.271
49	Jamaica	0.261
50	Iran	0.260
51	Tunisia	0.255
52	Paraguay	0.254
53	Ecuador	0.253
54	El Salvador	0.253
55	Dominican Republic	0.244
56	The Syrian Arab Republic	0.240
57	Egypt	0.236
58	Algeria	0.221
59	Zimbabwe	0.220
60	Indonesia	0.211
61	Honduras	0.208
62	Sri Lanka	0.203
63	India	0.201
64	Nicaragua	0.185
65	Pakistan	0.167
66	Senegal	0.158
67	Ghana	0.139
68	Kenya	0.129
69	Nepal	0.081
70	Tanzania	0.080
71	Sudan	0.071
72	Mozambique	0.066

Technology achievement index 2013

Reference

http://hdr.undp.org/sites/default/files/ip_desai-2.pdf

Gender Development Index Upsc

Gender development index definition

The GDI is the ratio of the HDIs calculated separately for females and males using the same methodology as in the HDI. It is a direct measure of the gender gap showing the female HDI as a percentage of the male HDI.

What is gender related development index?

Gender Development Index – It is the same as HDI but adjusted for reflecting inequalities between men and women.

In other words, HDI tells us about the average achievements of a society.

On the other hand, GDI adjusts these achievements for reflecting inequalities between men and women.

They prepare separate metrics for Male and Females.

Gender Development Index – Empowerment Measures

It tells us the opportunities available to the women in society by way of:

Their political participation and Decision making power.

Their Economic participation such as the number of women holding positions as Senior managers, bureaucrats, etc., and the Number of women bearing high professional or scientific positions.

Share of total income earned by women as against men.

Global gender inequality index

WEF’s gender gap index: India falls 28 places, and it placed at 140 among 156 Countries. India slipped in the World Economic Forum’s Global Gender Gap Report 2021, becoming the third-worst performer in South Asia.

Switzerland has the highest gender inequality index and Yemen is the lowest.

Gdi and Gem

The only difference is that the GDI uses the set of income levels, while the GEM (Gender Empowerment Measure) uses the income levels itself. These gaps are much larger than those between the HDI and the GDI, which are only about 1 percent on average.

FAQ

What is the rank of India in the gender development index?

India’s rank in GDI is 123.

How is GDI calculated?

It is the ratio of female HDI to Male HDI.

What is a good GDI score?

Good GDI score is 1.000. As the GDI is on a scale of 0.000 to 1.000. 0.000 is the lowest while 1.000 is the Highest.

What is GDI in geography?

The GDI is calculated for 167 countries and the countries are ranked based on the GDI score.

Which country has the lowest GII?

As per Gender Inequality Index 2020, Yemen was the lowest in GII.

Human Poverty and Human Poverty Index Upsc

Human Poverty

When a Human is unable to get nutritious food, shelter, and education, or if children are forced into Child Labour, or a Human or community faces social discrimination such as Caste discrimination, then they come under Human Poverty.

In Several countries, Women, Elderly or Old age people, and female children are the poorest in society, as they are denied opportunities and equal access to resources, even at the family level.

Food security in India Upsc

Explain the human poverty index (HPI)?

HPI is an indication of poverty in a nation. It is developed by the United Nation in addition to Human Development Index (HDI). It was first reported as a part of the Human Deprivation Report in 1997 and in 2010 it was supplanted by UN Multidimensional Poverty Index.

HPI-I – Indicates the extent of Human Poverty in developing countries.

HPI-II – Indicates the extent of Human Poverty in developed countries.

HPI-I

It shows the extent of deprivation in society or a country in terms of longevity, knowledge & decent standard of living. Lack of longevity is expressed in the percentage of the population having the probability of not surviving up to the age of 40 years.

Adult illiteracy – Percentage of adults who are illiterate

Lack of Decent Standard of Living:

% of the population does not have access to improved sources of water supply.

5 of children who are undernourished, who are underweight for age.

It is always measured in terms of Percentage (%)

HPI-II

Lack of Longevity- % up to 60 years. Adult Illiteracy- % of adults who are functionally illiterate.

Lack of decent standard of living- % of people whose income is less than 50% of the medium income of the society.

Social Exclusion- % of people who remain unemployed on a long-term basis (more than 12 months).

Human poverty Index 2020

It is released as “The 2020 Global Multidimensional Poverty Index (MPI)“

As per the Human poverty Index, 2020 with respect to India – “Four countries halved their MPI value. India (2005/2006–2015/2016) did so nationally and among children and had the biggest reduction in the number of multidimensionally poor people (273 million).”

The 2018 Global Multidimensional Poverty Index (MPI)

The 2030 Agenda for Sustainable Development reaffirmed the importance of multi-dimensional approaches to poverty eradication that go beyond economic deprivation. The 2018 MPI answers the call to better measure progress against Sustainable Development Goal 1 – to end poverty in all its forms; and opens a new window into how poverty – in all its dimensions – is changing.

With the 2018 estimates, the MPI measures acute multidimensional deprivations in 105 countries covering 77 per cent of the global population.

Multidimensional Poverty

Multidimensional poverty is a concept that encompasses various forms of deprivation beyond just income poverty. It captures multiple overlapping disadvantages in key dimensions of human well-being, including health, education, and living standards.

The Multidimensional Poverty Index (MPI) was first launched by the UN Development Programme (UNDP) and Oxford Poverty and Human Development Initiative (OPHI) in 2010. The global MPI captures the different types of disadvantage that each poor person experiences at the same time in 10 indicators across three dimensions – education, health and living standards.

National Multidimensional Poverty Index

It is an indigenized poverty measurement tool developed by NITI Aayog, India, in collaboration with the UNDP and the OPHI. The 12 indicators cover Nutrition, Child and Adolescent Mortality, Maternal Health, Years of Schooling, School Attendance, Cooking Fuel, Sanitation, Drinking Water, Electricity, Housing, Assets, and Bank Accounts.

As per the 2023 progress review based on NFHS data, India’s multidimensional poverty has substantially declined from 29.17% in 2013-14 to 11.28% in 2022-23.

Reference

http://hdr.undp.org/en/2020-MPI

Pillars of human development-Human Development Index Upsc

First Human Development Report was published in 1990.

First Person to develop this is Dr. Mahbub-ul-Haq and Prof Amartya Sen with the leadership of Dr. Haq.

The title of the human development report in 2019 is ” Beyond income, beyond averages, beyond today: Inequalities in human development in the 21st century”.

HDR is brought out by the United Nations Development Programme (UNDP).

World development report by World Bank. Dr. Mahbub-ul-Haq describes, Human development as the process of enlarging people’s choices and improving their lives.

Best books for tnpsc exams/Upsc

Human Development Index

Longevity or Health
Literacy or Education
Standard of Living

Longevity or Health

The minimum value of 20 years to maximum years of 83.57 years. Maximum years of 83.7 is observed in 1980-2012.

Life expectancy birth is 55 means it would be 0.551 for the country.

Literacy or Education (HDR-2010)

Mean Years of Schooling- This is based on surveys available with the UNESCO Institute for Statistics database and Barro & Lee’s (2010) method.

Expected years of schooling (Minimum age the child enters the school) – Enrollment by age at all levels of education and population of the official school. The expected years of schooling is currency 18 years.

In 1980-2012m 13.3 years were estimated for the United States.

Standard of Living

It is measured by GNI (Gross National Income/ Product) per capita at ‘Purchasing Power Parity in US Dollars (PPP $). GDP is used in the past for Standard of Living.

The minimum income is $100 to a maximum of $87,478 (PPP). Qatar is maximum with $87,478 (PPP) in 2012.

UNDP ranks based on the performances on a scale from 0 to 1.

The scale of Classification HDI by UNDP

0.8 to 1.0 – High HDI countries.
0.5 to 0.79 medium HDI countries.
0.0 to 0.49 Low HDI countries

Approaches of human development

Income Approach

It is one of the earliest methods of determining Human development and it is linked to income. The higher the level of income and higher is the level of human development.

Welfare Approach

This method treats humans are target beneficiaries and it argues the government to spend money on education, health, amenities, etc. In this approach, people are just receivers of benefits and not participants.

Basin Needs Approach

This approach was proposed by International Labour Organisation (ILO) initially. Health, education, food, water supply, sanitation, and housing were identified as basic needs, and human choices are ignored.

Capability Approach

This method of human development is associated with Prof. Amartya Sen. By building human capabilities such as Health, education, access to resources will help human development.

Approaches to Human development Index — Approaches to Human Development

Pillars of Human Development

Human development has four pillars, they are equity, sustainability, productivity, and empowerment.

Equity refers to the process of giving equal opportunities to everyone in society irrespective of gender, race, etc. In the case of India, it is caste.

Sustainability is continuity in making the availability of opportunities for all generations. All the environmental, financial, and human resources must be used keeping in mind for future generations. Misuse of natural resources will make natural resources unavailable for future generations.

Productivity means human resources or human labor, it needs to be constantly enriched by giving education, increasing the health facilities, etc.

Check Tamilnadu Economics with respect to HDI

Union Budget 2020-21 and Reforms to Energize Economy

The Highlights of Union Budget 2021 are as follows

3 Most Important Theme of Union Budget 2020-21

The themes of the budget are Aspirational India, Economic development for all, and Caring Society.

Aspirational India is the country with better standards of life with health access, jobs and education for all section of the society.

Economic development for all

“Sabka Saath, Sabka Vikas, Sabka Vishwas”.

Caring Society or Antyodaya as an article of faith.

These three themes are held by Corruption less and policy driven governance.

Three Components of Aspirational India

1. Agriculture and Rural development
2. Wellness of people, providing water to all and Sanitation to all.
3. Education and development of skills

Agriculture, Irrigation and Rural Development in 2020-21

Reforms or Sixteen Action points for Agriculture, Rural and Irrigation in Union Budget 2020-21

A total of ₹ 2.83 Lakh crores has allocated for this 16 Action points.
For Agriculture, Irrigation & allied activities ₹ 1.23 Lakh crores has been allocated.
For the development of Panchayat rat and Rural development ₹ 1.23 lakh crore is allocated.

Agriculture Credit

A target of ₹15 Lakh crore has been set for the Agriculture credit for the year 2020-21.
Under the KCC Scheme, PM-Kisan beneficiaries also proposed to be covered.
Further expansion of Re-finance scheme “NABARD”.
Lot of comprehensive measure for 100 water deficient district.

To achieve 16 action points for Agriculture, Irrigation and Rural Development, a sum of Rs 2.83 Lakh Crore is to be allocated.
For Agriculture and Rural Development Rs 1.6 Lakh Crore is to be allocated.
In that Rs 2.83 Lakh Crore, Rs 1.23 Lakh Crore is allocated for the Rural Development and Panchayati Raj (Local Government in Villages).

Agriculture Credit in Union Budget 2020-21

For the year 2020-21 , a target of Rs 15 Lakh Crore is set for Agriculture Credit.
KCC scheme covers PM-KISAN beneficiaries.
Expansion of NABARD Re-Finance Scheme.
Proposal for comprehensive measure for 100 water stressed districts.

Blue Economy in Union Budget 2020-21

Union Budget 2020-21- Fishing Budget — Photo by Quang Nguyen Vinh on Pexels.com

By 2024-25, Rs 1 Lakh Crore Fisheries products exports to be achieved.
By 2022-23, the targeted Fish production to be increased by 200 Lakh tonnes.

Kisan Rail in Union Budget 2020-21

Through PPP(Public Private Partnership) mode Kisan Rail to be setup.
For Perishable item such as milk, meat, fish etc, National cold storage supply chain will be build.
Refrigerated coaches in Express and Freight trains.

Krishi Udaan in Union Budget 2020-21

Krishi Udaan is a part of Ministry of Civil Aviation.
The coverage is both national and internation routes.
Realization of improved value of agri-products by North-East and Tribal Districts.

One Products One District

The aim is to improve export and marketing of Horticulture products.
Innovation fertilizers and traditional organic fertilizers to be balancly used.
Organic, natural and integrated farming measures to be taken.
Organic products market to be strengthened by online nation portal Jaivik Kheti.

Zero Budget Natural Farming in Union Budget 2020-21

It is mensioned in July 2019-20 Budget is also included in this budget.
In rain fed areas, the integrated farming system is to be expanded.
In the non-crop seasons, solar energy production, bee-keeping, Multi-tier cropping in the farm fields.

PM-KUSUM in Union Budget 2020-21

Expansion of solar agricultural pumps (PM-KUSUM).
Stand alone solar pumps to be provided for 20 Lakh farmers.

Village Storage Scheme in Union Budget 2020-21

Village storage scheme to be implemented by the Self Help Groups(SHG) to provide farmers a good holding capacity and also to reduce the logistics costs.
Dhanya Lakshi scheme, for Women SHG under Village Storage Scheme.

Livestock in Union Budget 2020-21

Bu 2025, doubling of capacity of milk processing by 108 million metric tonnes.
The present artificial insemination of 30% is to be increase by 70%.
Fodder farms to be developed by MNREGS.
By 2025, disease in cattles such Foot and Mouth Diseases, Brucellosis in cattle and Peste Des Petits Ruminants (PPR) in cow, sheeps, goats etc to be eliminated.

Deen Dayal Antyodaya Yojana in Union Budget 2020-21

For Poverty alleviation, 0.5 crore household are part of 58 lakh SHG.

Wellness, Water and Sanitation in Union Budget 2020-21

For Healthcare sector, a overall sum of Rs 69,00 crore is allocated.
PMJAY(PM Jan Arogya Yojana), Rs 6400 crore allocated.
PMJAY(PM Jan Arogya Yojana) adopted by more than 20,00 hospitals.
Proposal of Viability Gap Funding window for building hospitals through PPP mode.
In the first phase, district with no Ayshman enabled hospitals to be covered.
For Swachh bharat mission 2020-21, Rs 12,300 crore is allocated.
To sustain ODF (Open defecation Free) behaviour, committment to ODF plus.
Management of Grey water and liquid.
Segregation and processing of Solid Waste Collection.

Planning Commission Tnpsc Notes

Planning Commission of India

The planning commission of India was constituted in the year 1950 in March. It was established by a resolution of the Government of India under the chairmanship of Pandit Jawaharlal Nehru.

Its objective was to prepare a plan for the “most effective and balanced utilization of the country’s resources”. The planning commission played an advisory role with regard to the formulation of the plans.

The Planning commission is a non-constitutional and a non-statutory body and it is responsible for the formulation of five-year plans.

It is the duty of the central government and state government to execute the planning programmes. Currently, the planning commission was replaced by Niti Aayog.

Functions of Planning Commission

The planning commission has the job of assessing the resources of the nation so that they could be used for the future needs of the country.

These included materials are capital, human resources, etc. It is the primary duty of the commission to prepare the plans so that these resources could be used effectively and balanced manner.

The resources had to be allocated among various sectors as per priorities and the stages of progress and completion of programmes were to be laid down to the commission.

The commission needs to identify the conditions and issues that would be a hindrance to the development.

It had to examine the ways by which the plan could be effectively implemented in the prevailing conditions of the nation.

It also determined the stage-by-stage execution of the plan. The planning process had to be assessed periodically so that the right strategies could be used to implement the plans.

In the process, the planning commission had the function of advising the central and state government with regard to the appropriate strategies of planning.

The commission also had to analyze particular issues and advice the government.

It was the role of the planning commission to determine the rate of growth of the economy specifying the targets of the plan period for every sector.

Composition and Organization of Planning Commission

The Planning commission consisted of the Prime Minister and four full-time members and a few part-time members of cabinet rank. The full-time members were the person who has excelled in the technical field, economy, and administration.

The Prime minister is the chairman of the planning commission enabling the coordination of the functions of the commission. As per the recommendations of the Administrative Reforms-Commission changes were made in the composition of the commission.

It included the Prime Minister as the Chairman who presides over the meetings of the commission, a deputy chairman who is the de-facto executive head and who has the responsibility of formulating the draft of the plan to the central cabinet, a secretary, four full-time members, and some cabinet ministers as part-time members.

The finance minister and planning ministers are ex-officio members of the commission and a member secretary who is usually a senior IAS officer is also part of the commission. The functioning of the administration was coordinated by the additional secretary.

Senior officers in the ranks of deputy secretaries and undersecretaries had to monitor the progress of the programmes. There were no representatives from the state government and it was a central body. The planning commission of India worked on the principle of collective responsibility.

It has three organs namely the general division, subject division, and Administrative division. The general division relates to the entire economy and the subject division concerns specific areas of development like food and agriculture, power and irrigation, transport, etc.

The commission also includes the General Administration branch and evaluation divisions. Along with these, various other bodies also worked with the Planning Commission for the formulation and execution of plans. They are: National Planning Council, National Development Council (NDC)

Efforts Towards Poverty Eradication

One of the major problems in India was poverty. The Planning Commission aimed not only at increasing the per capita income but also improving the quality of life of the people. The growth of the economy necessitated the inclusion of all sectors. It was also understood that the quality of life of the common man was interrelated to his economic conditions.

So, it was realized by the state that it was important to guarantee people a decent standard of living along with proper access to education and health care which are next to food, clothing, and shelter. But the challenge was that economic growth and reduction of poverty are not always related.

From the fourth five-year plan, the government focussed on this issue and concentrated on ‘garibi hatao’ during the early1970’s. Employment generation was considered to be one of the measures for the reduction of poverty. There were many problems due to unemployment and underemployment.

In all the five-year plans emphasis was given to employees. The rural-urban divide was another important area where the Planning Commission had to concentrate. In the process of economic development, industrialization and urbanization increased and this had its impact on Indian society and economy.

The disparity in the development of the rural and urban population would foster inequality which is against the principle enshrined in the constitution. The Planning Commission recommended many programmes for the development of the rural economy so that the development of both the rural and urban populations could be ensured.

FAQ

What is planning commission of India?

It is an institution in the government of India, that formulates the five-year plans and also formulates the resources planning.

Chairman of planning commission of india 2018?

Shri Montek Singh Ahluwalia

Is the planning commission of India is a statutory body?

No, the Planning commission is a non-constitutional and non-statutory body.

Planning commission of india was set up in the year?

March 1950.

Conclusion

Planning Commission is established in March 1950. Its main objective is to formulate five-year plans. It was finally replaced by Niti Aayog on January 1, 1950, by a cabinet resolution.