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UPSC IAS Exam :: Study Material, Question Papers, Preparation Tests
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In1950,Indiasshareintotalworldtradewas1.78%.By2002thishaddroppedto0.8%
India has a total foreign trade of around USD 489 billion.OfthisimportsaccountedforUSD303billionand
exportsUSD185billion
Basedon2008-2009data, Indias largest trading partner is the UAE (totaltradeUSD48billion)
IndiaexportsthemaximumtoUAE(USD24billion)andimportsthemostfromthePeoplesRepublicofChina(USD32billion)
ForeigntradeinIndiafallsunderthepurviewoftheDepartmentofCommerceundertheMinistryofCommerceandIndustry
Top trading partners
Exports
Imports
Total trade
(USD billion)
(USD billion)
(USD billion)
UAE
24.4
23.8
48.2
PRC
9.3
32.4
41.8
USA
21.1
18.5
39.7
SaudiArabia
5.1
19.9
25.0
Germany
6.3
12.0
18.3
Rank
Country
SEZ
Location
Type
KandlaSEZ
Gujarat
Multiproduct
SEEPZ
Mumbai
Electronics,gemsandjewellery
NoidaSEZ
UttarPradesh
Multiproduct
MEPZ
Chennai
Multiproduct
CochinSEZ
Kerala
Multiproduct
FaltaSEZ
WestBengal
Multiproduct
VisakhapatnamSEZ
AndhraPradesh
Multiproduct
Trade Agreements
Agreement
Contracting parties
Notes
Establishedin2009
AgreementofCooperationwith
Nepaltocontrolunauthorisedtrade
India,Nepal
Theagreementaimstorestrictandpreventunlawfulactivities
relatingtotrafficinnarcotics,foreignexchangeetc
Establishedin2007
Afghanistan,whichbecameSAARCmemberin2007,issetto
India,Pakistan,Sri
becomelatestSAFTAmember
Lanka,
India,Pakistan,SriLankaarecategorisedNon-LeastDeveloped
AgreementonSouthAsiaFreeTrade
Nepal,Bhutan,
Area(SAFTA)
Bangladesh,
ContractingStates(NLDCS)
Bhutan,Bangladesh,Nepal,MaldivesareLeastDeveloped
Maldives
ContractingStates(LDCS)
NDLCStoreducetariffsforLDCSproductsto0-5%in3years
fromcontract
Bangladesh,China,
AsiaPacificTradeAgreement(APTA)
India,SouthKorea,Sri
Established2005
Lanka
ComprehensiveEconomic
CooperationAgreement
betweentheRepublicofIndiaandthe
India,Singapore
Republicof
Singapore
Signed2005
Indiaofferstariffpreferenceof10-50%on178tarifflines(including
meat,fish,salt,iodine,
IndiaChilePreferentialTrade
Agreement(PTA)
Copper,chemicals,leather,newsprint,paper,wool,woodetc)
India,Chile
Chileofferspreferenceof10-100%on296tarifflines(includes
agriculturalproducts,chemicals,
pharmaceuticals,dyesandresins,plastic,rubber,leather,textiles,
footwear,industrialproducts)
IndiaAfghanistanPTA
India,Afghanistan
Afghanistangrantspreferentialtariffto8productsfromIndia
includingblacktea,ayurvedicand
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Homeopathicmedicine,othermedicine,sugar,cement
Indiagrantspreferentialtariffto38productsfromAfghanistan,
mainlyagriculturalproductslike
dryfruits
IndiaBhutanTradeAgreement
India,Bhutan
IndiaKoreaCEPA
India,SouthKorea
MERCOSURisatradingblocinLatinAmericathatcomprises
Brazil,Argentina,UruguayandParaguay
MERCOSURofferstariffconcessionon452products
Indiaofferstariffconcessionon450products
ThemajorproductscoveredinIndianofferlistaremeatproducts,
chemicals,dyesandpigments,
IndiaMERCOSURPTA
India,MERCOSUR
rawhidesandskins,leather,wool,cotton,glass,ironandsteel,
machinery,opticalandphotographic
equipment
ThemajorproductsinMERCOSURofferlistincludefood,organic
chemicals,pharmaceuticals,essentialoils,
plastics,rubber,toolsandimplements,machinery
IndiaSriLankaFTA
India,SriLanka
LAST WEEK: FINANCIAL MARKETS
~~~~~
NEXT WEEK: POVERTY ALLEVIATION
1February2010|Tags:foreigntrade|1Comment
Indiasfinancialmarketisoneoftheoldestintheworld
Itisconsideredthefastestgrowingandstrongestamongemergingeconomies
FinancialmarketsinIndiaareunderthepurviewoftheCapital Markets Division of the Department of Economic Affairs of the Ministry of Finance
ThemarketsinIndiaareregulatedbytheSecuritiesandExchangeBoardofIndia(SEBI)
The PAN is the sole identification number for all transactions in securities markets
Although there are more than 25 stock exchanges in the country, the Bombay Stock Exchange and the National Stock Exchange account for a large majority
of securities exchanges
GOVERNMENTAL REGULATORY BODIES
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TheNSEisownedbyasetoffinancialinstitutions,banksandinsurancecompanies. There are at least two foreign investors in NSE: NYSE Euronext and Goldman
Sachs
The NSEs key index is the Nifty
PREVIOUS WEEK: INSURANCE
~~~~~
NEXT WEEK: FOREIGN TRADE
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INSURANCE IN INDIA
Indian Economy #10(434.7KiB,5,620hits)
Overview
ThefirstinsurancecompanyinIndiawastheOrientalLifeInsuranceCompany,foundedinCalcutta1818.However,itisnowdefunct
ThefirstIndianinsurancecompanywastheBombayMutualLifeAssuranceSociety,founded1870
The oldest existing insurance company is the National Insurance Company, founded 1906
Insurancewasnationalisedin1956andthenopeneduptoprivatesectorin1999.
Currentlythegovernmentallows26%FDIintheinsurancesector
ThelargestlifeinsurancecompanyinIndiaistheLifeInsuranceCorporation
Insurance falls under the purview of the Department of Financial Services, Ministry of Finance
IAS,IASExam,IASStudyMaterial,UPSC,UPSCQuestionPapers,India,CivilService,GeneralStudies,Free
Nationalisation of insurance
LifeinsuranceinIndiawasnationalisedbytheLifeInsuranceCorporationAct1956
All245life-insurancecompaniesinIndiaatthetimeweremergedtoformtheLifeInsuranceCorporation(LIC).
TheGeneralInsuranceBusinessAct1972nationalisedgeneralinsurancecompanies
Theexisting100generalinsurancecompanieswereamalgamatedintotheGeneralInsuranceCorporationofIndia(GIC).
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AllgovernmentbodiesininsurancefunctionundertheMinistryofFinanceunlessotherwisenoted
Life Insurance Corporation (LIC)
Established1956,headquartersMumbai
The LIC is the largest life insurance company in India and also the nations largest investor
Itfundscloseto25%ofthegovernmentsexpenses
TheLICownsthefollowingsubsidiaries
LifeInsuranceCorporationofIndiaInternational:providesUSDdenominatedpoliciestoNRIs
LICNepal
LICLanka
LICHousingFinance
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IAS,IASExam,IASStudyMaterial,UPSC,UPSCQuestionPapers,India,CivilService,GeneralStudies,Free
IAS,IASExam,IASStudyMaterial,UPSC,UPSCQuestionPapers,India,CivilService,GeneralStudies,Free
IAS,IASExam,IASStudyMaterial,UPSC,UPSCQuestionPapers,India,CivilService,GeneralStudies,Free
Keywords:IAS,IASExam,IASStudyMaterial,UPSC,UPSCQuestionPapers,India,CivilService,GeneralStudies,Free
PREVIOUS WEEK: BANKING
~~~~~ NEXT WEEK: SECURITIES & EXCHANGE
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BANKING IN INDIA
Indian Economy #9(472.5KiB,20,982hits)
Overview
OrganizedbankinginIndiaoriginatedinthelate18 thcentury
The State Bank of India, headquartered in Mumbai, is the largest bank in India
Currently,Indiahas88ScheduledBanks27publicsectorbanks,31privatebanksand38foreignbanks
Thepublicsectorbanksholdover75%ofbankingassetsinthecountry,followedbyprivatebanks(18.2%)andforeignbanks(6.5%)
CentralbankinginIndiaistheresponsibilityoftheReserveBankofIndia
Banking in India is the responsibility of the Department of Financial Services, Ministry of Finance
Currentlythereare170scheduledcommercialbanks,whichincludes91regionalruralbanks,19nationalisedbanks,8banksintheSBIgroupandtheIDBI
Thereare4non-scheduledcommercialbanksinthecountry
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Nationalisation of banks
The Government of India nationalised 14 of the largest banks in 1969
ThisachievedbyanordinancetotheeffectinJuly1969.ThiswasformalizedbytheBankingCompanies(AcquisitionandTransferofUndertaking)Bill1969
Thebanksthatwerenationalizedin1969were:AllahabadBank,BankofBaroda,BankofIndia,BankofMaharastra,CanaraBank,CentralBankofIndia,DenaBank,
IndianBank,IndianOverseasBank,PunjabNationalBank,SyndicateBank,UCOBank,UnionBankofIndiaandUnitedBankofIndia
In 1980, six more banks were nationalized.Thebanksthatwerenationalizedin1980were:AndhraBank,CorporationBank,OrientalBankofCommerce,Punjaband
SindBank,NewBankofIndiaandVijayaBank
In1993,theNewBankofIndiawasmergedwithPunjabNationalBank.There are 19 nationalized banks in operation today
Followingthis,theGoIcontrolledabout91%ofthebankingbusinessinIndia
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Overview
TheReserveBankofIndiaisthecentralbankofIndia
It was established in 1935 and nationalised in 1949.ItsheadquarterswasinitiallyCalcutta,butmovedtoBombayin1937.ItiscurrentlyheadquarteredinMumbai.
The first Governor of the RBI was Sir Osborne Smith. ThecurrentGovernoroftheRBIisDr.DuvvuriSubbarao
TheRBIfunctionsundertheprovisionsoftheReserveBankofIndiaAct1934
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Objectives
Maintainpricestability
Ensure adequate flow of credit
Protectdepositorsinterests
Providecost-effectivebankingservicestothepublic
Facilitateexternaltradeandpayment
Promote development of foreign exchange market in India
Provide supplies of currency notes and coins in the country
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Functions
Formulates,implementsandmonitorsmonetarypolicies
Regulatesoperationsofbankingandfinancialservicessectorinthecountry
Manages the Foreign Exchange Management Act 1999
Issues,exchangesanddestroyscurrencynotesandcoins
Performpromotionalfunctionstosupportnationalobjectives
Acts as banker to banks by maintaining accounts of all scheduled banks
Acts as banker to the Central and state governments
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Governor
Tenure
1935-1937
SirJamesTaylor
1937-1943
No.
Notes
First Governor of the RBI
Didnotsignanybanknotes
GovernorduringWWII
Startedthepracticeofsigningbanknotes
First Indian Governor of RBI
OversawIndependence&Partition
Sir C D Deshmukh
1943-1949
1949-1957
WitnessedcommencementofFiveYearPlans,andtransformationofImperial
BankofIndiatoSBI
Jan1957Feb
KGAmbegaonkar
H V R Iyengar
1957-1962
PCBhattacharya
1962-1967
L K Jha
1967-1970
BNAdarkar
10
SJagannathan
11
NCSenGupta
12
KRPuri
1957
Didnotsignanybanknotes
Witnessed introduction of decimal coinage
Variablecashreserveration(CRR)introduced
May1970June
1970
AppointedasAmbassadortoUSin1970
ServedasIndiasExecutiveDirectorattheIMF
Witnessedoilshock,expansionofbankingservices,shifttofloatingrates
1970-1975
RelinquishedofficetoserveasExecutiveDirectoratIMF
May1975Aug
1975
1975-1977
Only Governor to be appointed from the Reserve Bank cadre
13
M Narasimhan
ChairpersonofCommitteeonFinancialSystem(1991)andCommitteeon
1977
BankingSectorReforms(1998)
ServedasExecutiveDirectorforIndiaattheWorldBankandtheIMF
ServedasSecretaryattheUnitedNationsDevelopmentProgramme(UNDP)
Witnesseddemonetisationofhighdenominationbanknotesandgold
auctions
14
Dr.IGPatel
1977-1982
Witnessednationalizationofsixbanks(1980)
SecuredIMFsExtendedFundFacility(1981).Thiswasthelargest
arrangementoftheIMFatthetime
15
Dr.ManmohanSingh
1982-1985
Witnessedcomprehensivelegalreformsinbankingsector
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AGhosh
17
RNMalhotra
Page 7 of 17
Jan1985Feb
1985
ServedasExecutiveDirectorofIMFpriortoRBI
1985-1990
Madeeffortstodevelopmoneymarkets
Managed balance of payments crisis
AdoptedIMFsstabilisationprogramme
18
S Venkitaraman
1990-1992
SuperviseddevaluationoftheRupee
Witnessedlaunchofeconomicreforms
Usheredinunprecedentedcentralbankactivism
Introducedcomprehensivemeasurestostrengthenandimproveefficiencyof
bankingsector
19
Dr. C Rangarajan
1992-1997
Establishmentofunifiedexchangerate
Cap on automatic finance by the Bank to the Government
20
Dr.BimalJalan
1997-2003
21
DrYVReddy
2003-2008
RepresentedIndiaontheExecutiveBoardsoftheIMFandWorldBankprior
toRBI
ExecutiveDirectortoIMFpriortoRBI
PriortoRBI,hehasbeen
SecretarytothePMsEconomicAdvisoryCouncil(2005-2007)
22
Dr.DSubbarao
2008-Present
LeadeconomistintheWorldBank(1999-2004)
FinanceSecretarytotheGovernmentofAndhraPradesh(19931998)
JointSecretary,Dept.ofEconomicAffairs(1988-1993)
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The State Bank of India is derived from the Imperial Bank of India (1921), which was nationalised in 1955
The State Bank of India is the oldest bank in India.IttracesitsancestrytotheBankofCalcutta,foundedin1806.
ItisheadquarteredinMumbai
The State Bank of India is also the largest bank in India. Ithasamarketshareofabout20%indepositsandadvances
TheStateBankGroupconsistsoftheSBIanditssubsidiarybanksviz.StateBankofIndore,StateBankofBikaner&Jaipur,StateBankofHyderabad,StateBankof
Mysore,StateBankofPatiala,StateBankofTravancore
TheSBIisoneoftheBigFourBanksinIndia,alongwithICICIBank,AxisBankandHDFCBank
The SBI was ranked as the 29th most reputable company in the world by Forbes in 2009
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Commercial Banks
Commercialbanksarethosethatcatertotheregularbankingandfinancialneedsofthepublic
Commercial banks include public sector banks and private sector banks.PublicsectorbanksincludetheStateBankGroupandothernationalisedbanks,
whileprivatesectorbanksincludeIndianbanksandforeignbanks
Cooperative Banks
Cooperativebankingisretailandcommercialbankingorganisedonacooperativebasis.Cooperativebanksincludecreditunions,savingsandloans
associationsandbuildingsocietiesandcooperatives
Cooperativebanksoperateontheprinciplesofcooperationmutualhelp,democraticdecisionmakingandopenmembership
They are governed by controls of the RBI as well as state governments.CooperativebanksingeneraloperateundertheCooperativeCreditSocietiesAct
1904,butlargeUrbanCooperativeBanksoperateundertheBankingRegulationAct1949
CooperativebanksinIndiaaretheprimaryfinanciersofagriculturalactivities,smallscaleindustriesandself-employedworkers
CooperativebanksinIndiawerefirstestablishedinthelate19thcentury,followingthesuccessofsuchbanksinBritainandGermany
The Anyonya Cooperative Bank Ltd. (ABCL) was the first cooperative bank in India.ItwasestablishedVithalLaxman(akaBhausahebKavthekar)in1889
underthenameAnyonyaSahayakariMandaliCooperativeBankLtd.ThebankclosedfunctioninginMarch2008followinganorderbytheRBI.Re-openingis
underconsideration
Regional Rural Banks
RegionalRuralBanks(RRBs)werefirstestablishedin1975
InitiallyfiveRRBswereestablishedatMoradabad(UP),Gorapkhpur(UP),Bhiwani(Haryana),Jaipur(Rajasthan),Malda(WB).Currentlythereare91RRBs
RRBs exist in all states except Goa and Sikkim
TheshareofRRBsinagriculturalcreditisaround5%
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Scheduled Banks
ScheduledBanksarethosebanksthathavebeenincludedinSecondScheduleoftheRBIAct1934
ScheduledBanksmustfulfiltwoconditions
ThepaidupcapitalandcollectedfundsofthebankmustnotbelessthanRs5lakhs
Anyactivityofthebankshouldnotadverselyaffecttheinterestofdeposition
ScheduledBanksenjoythefollowingbenefits
TheyareeligibleforobtainingloansonBankRatefromtheRBI
Theyacquiremembershipoftheclearinghouse
ScheduledBanksincludecommercialbanks,cooperativebanksandregionalruralbanks
Therearearound302ScheduledBanksinoperation
Non-Scheduled Banks
Non-ScheduledBanksarethosethatarenotincludedinthelistofScheduledBanks
TheyhavetofollowtheCashReserveRatio(CRR)condition.However,theyarenotcompelledtodepositthesefundswiththeRBI
They can avail loans from the RBI only under emergencies, and not for daily activities
Thereareonly4Non-ScheduledBanksinoperation
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PREVIOUS WEEK: HOUSING
~~~~~
NEXT WEEK: INSURANCE
11January2010|Tags:banking,RBI|1Comment
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HOUSING IN INDIA
Overview
MajorityofIndianhavepercapitahousingspacelessthan10x10squarefeet.Averageruralpercapitaspaceis103sqftandurbanpercapitaspaceis117sqft
Dharavi(inMumbai)isthelargestsluminIndia.Itcomprisesaround600,000-1millionpeopleina0.67sqmilearea.Dharavi is one of the most densely populated
areas of the world
Housing is a state subject.However,theUnionGovernmentisresponsibleforformulationofpoliciesandprogrammes
Central-levelpoliciesareimplementedbytheMinistryofHousingandUrbanPovertyAlleviation
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Keywords:India,ias,upsc,civilservice,studymaterial,free,exam,generalstudies,Indianeconomy
Urbanization in India
Urban settlements in India are those settlements
Thathaveaminimumpopulationof5000and
Have75%ofthemalepopulationengagedinnon-agriculturalactivitiesand
Haveapopulationdensityofatleast400personspersqkm
Further, all towns having a Municipal Corporation, Municipal Council or Cantonment Board are classified as urban
AsperCensus2001,Indiasurbanpopulationwas286million(28%oftotalpopulation)
Thenumberofcitieswithpopulationmorethan1millionis35
With 49.76% of population living in urban areas, Goa is the most urbanized state in India.HimachalPradeshistheleasturbanized(9.30%)
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promoteenvironment-friendlyandenergy-efficientmaterialsandconstructionpractices
Keywords:India,ias,upsc,civilservice,studymaterial,free,exam,generalstudies,Indianeconomy
Keywords:India,ias,upsc,civilservice,studymaterial,free,exam,generalstudies,Indianeconomy
PREVIOUS WEEK: PUBLIC FINANCE
~~~~~
NEXT WEEK: BANKING
4January2010|Tags:housing|NoComments
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PUBLIC FINANCE IN INDIA
Overview
PublicfinanceinIndiacomesunderthepurviewoftheMinistryofFinance
TheMinistryofFinancehasfourdepartments
DepartmentofEconomicAffairs
DepartmentofExpenditure
DepartmentofRevenue
DepartmentofCompanyAffairs
TheMinistryofFinancepreparesthebudgetforthefollowinggovernments
UnionGovernment
UnionTerritories
Variousstates,whenunderPresidentsrule
Keywords:India,ias,upsc,civilservice,studymaterial,generalstudies,Indianeconomy
Sources of Revenue
Mainsourcesofrevenuearecustomsduties,exciseduties,servicetax,corporateandincometaxes
Non-taxrevenuesconsistofinterestreceipts(includinginterestpaidbyRailways),dividendandprofits
Forstates,revenueismainlyfromtaxesanddutiesleviedbythestategovernments,shareoftaxesleviedbyUnion,andgrantsreceivedfromtheUnion
Forlocalbodyfinance,theprimarysourcesarepropertytaxes,octroiandterminaltaxes
Keywords:India,ias,upsc,civilservice,studymaterial,generalstudies,Indianeconomy
Sources of expenditure
1. Non-plan expenditure
1. Revenueexpenditure:itconsistsofinterestpayments,defencerevenueexpenditure,subsidies,debtrelieftofarmersetc,andgrantstostatesandUnion
Territories
2. Capitalexpenditure:includedefencecapitalexpenditure,loanstopublicsectorenterprises,loanstostategovernmentsandUTs,andloanstoforeign
governments
2. Plan expenditure
1. Includesagriculture,ruraldevelopment,irrigationandfloodcontrol,energy,industry,minerals,transport,communicationsetc
Keywords:India,ias,upsc,civilservice,studymaterial,generalstudies,Indianeconomy
Union Budget
TheUnionBudgetisastatementoffinancialpositionoftheUnionGovernment
TheobjectivesoftheBudgetinclude
Coordinationofresources
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Economicstability
Managementofpublicenterprises
Definitionofeconomicpolicy
The first Budget was presented in 1860
TheRailwayBudgetwasseparatedfromtheGeneralBudgetin1921.However,the Railway Budget is a part of the General Budget, just prepared and presented
separately
The first Union Budget of independent India was presented by R K Shanmukham Chetty in Nov 1947
TheBudgetispresentedonthelastworkingdayofFebruary,andmustbepassedbyParliamentbeforeitcancomeintoeffectonApril1(thestartofthefinancialyear)
Keywords:India,ias,upsc,civilservice,studymaterial,generalstudies,Indianeconomy
Kelkar Commission
The 13th Finance Commission, with Vijay Kelkar as Chairman was constituted in Nov 2007
The Finance Commission is ordained by Article 280 of the Constitution
ThemainrecommendationsoftheKelkarCommissioninclude
SeniorcitizensandwidowstohaveexceptionlimitonincometaxofRs150,000
Threetypesofincometaxslabs:uptoRs1lakh(notax),Rs1-4lakh(20%tax),AboveRs4lakh(30%tax)
Abolitionofdividendtaxandlongtermcapitalgain
Incometaxonagriculturetobewithdrawn
Higherdutyof150%forspecificagroproductsanddemeritgoods
Completeexemptionofcustomdutyforlifesavingdrugs,equipment,anddefencerelatedgoods
Keywords:India,ias,upsc,civilservice,studymaterial,generalstudies,Indianeconomy
Taxes
Direct taxes are those taxes in which the burden of tax cannot be shifted from the person on whom it has been levied.Eg:incometax,propertytax
Indirect taxes are those taxes in which the burden of tax can be shifted. Eg:salestax,exciseduty,entertainmenttax
Indirecttaxesarethelargersourceofrevenueforthegovernment
Theratioofrevenuefromdirecttoindirecttaxesisusuallyaround40:60
The largest revenue of the government comes from excise duty
Keywords:India,ias,upsc,civilservice,studymaterial,generalstudies,Indianeconomy
Keywords:India,ias,upsc,civilservice,studymaterial,generalstudies,Indianeconomy
PREVIOUS WEEK: SMALL SCALE INDUSTRIES
~~~~~
NEXT WEEK: HOUSING IN INDIA
21December2009|Tags:finance|NoComments
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SMALL SCALE INDUSTRIES IN INDIA
Overview
ThesmallscaleindustrialsectorinIndiaisdividedintothreecategories:micro,smallandmedium.Together,theyareknownasMicro,SmallandMediumEnterprises
(MSME)
Micro scale sector: industries in which in the investment in plant and machinery is under Rs. 25 lakh.Forserviceenterprises,thislimitisRs.10lakh
Small scale sector: industries in which the investment in plant and machinery is between Rs 25 lakh and Rs. 5 crore.Forserviceenterprises,thislimit
isRs10lakhRs2crore
Medium scale sector: industries in which the investment in plant and machinery is between Rs. 5 crore and Rs 10 crore.Forservicesenterprise,Rs.2
croreRs.5crore
TheMSMEsectorinIndiaemploysabout60millionpeople,itisthesecondlargestsectorintermsofemployment(afteragriculture)
MSMEsectoraccountsfor45%ofindustrialoutputand40%ofexports
The MSME sector in India falls under the purview of the Ministry of Micro, Small and Medium Enterprises. ThisMinistrywasformedbythemergeroftheMinistry
ofSmallScaleIndustriesandMinistryofAgroandRuralIndustriesin2007
Registrationofanindustrialunitasamicro,smallormediumscaleenterpriseisvoluntary.However,benefitssuchaspowerandtaxsubsidiescanonlybeobtainedif
registered
RegistrationisdonebytheDirectorateorCommissionerofIndustriesfortherespectivestates
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4. TheMSME-DOprovidesfacilitiesformanagerialconsulting,technologyupgradation,qualityandinfrastructureimprovement,andhumanresourcestrainingand
development
5. FunctionsundertheMinistryofMSME
2. National Small Industries Corporation (NSIC)
1. Establishedin1955,headquartersNewDelhi
2. Helpsinthefostering,aidingandpromotionofgrowthofMSME
3. Focusesonthecommercialaspectsofoperation
4. Providesservicesintheareasofmaterialprocurement,productmarketing,technologyacquisition,improvedmanagementpracticesetc
5. FunctionsundertheMinistryofMSME
3. Khadi and Village Industries Commission (KVIC)
1. Establishedin1956,headquartersNewDelhi
2. Providesemploymentopportunitiesinruralareasbypromotionanddevelopmentofkhadiandvillageindustries
3. FunctionsundertheMinistryofMSME
4. Coir Board
1. Establishedin1953,headquartersCochin
2. FirstcoirindustryinIndiawasestablishedbyJamesDarraghinAlleppeyin1859
3. IsresponsibleforformulationandimplementationofschemesforthepromotionanddevelopmentofcoirindustryinIndia
4. Primarycoirexportsincludecoirmats,coirtextilesandcoirpith
5. TheCoirBoardfunctionsundertheMinistryofMSME
5. Small Industries Development Bank of India (SIDBI)
Establishedin1990
Objectivesincludethepromotion,financinganddevelopmentofsmallscaleindustries
SIDBI was ranked among the top 30 development banks in the world by the The Banker, London
SIDBIfunctionsundertheMinistryofFinance
Keywords:India,ias,upsc,civilservice,studymaterial,generalstudies,free
TheGovernmenthasestablishedthreenationallevelEntrepreneurshipDevelopmentInstitutes.Theseinstitutesdeveloptrainingmodules,undertakeresearchandprovide
consultancyservicesfortheMSMEsector.AlltheseinstitutesfunctionundertheMinistryofMSME
Institute
NationalInstituteforMicro,Smalland
MediumEnterprises(NIMSME)
NationalInstituteofEntrepreneurshipand
SmallBusinessDevelopment(NIESBUD)
IndianInstituteofEntrepreneurship(IIE)
Location
Established
Hyderabad
1960
Noida
1983
Guwahati
1993
Keywords:India,ias,upsc,civilservice,studymaterial,generalstudies,free
Someoftheimportantprogrammesarehighlightedinthissection.Foracompletelistofschemesandprogrammesseehereandhere
1. Cluster Development Initiative (CDI)
1. Clustersaredefinedassectoralandgeographicalconcentrationsofenterprisesthatsharecommonopportunitiesandthreats
2. Clustersfacilitatethedevelopmentofinter-firmcooperationtopromotelocalproductionandcollectivelearning
3. Clusters account for over 60% of manufactured exports from India
4. Indiahasover400clustersofSmallandMediumEnterprises(SME)and2000artisanclusters
5. The CDI in India is supported by the Cluster Development Programmer of the United Nations Industrial Development Organisation (UNIDO)
6. TheCDIisaprogrammeimplementedbytheMinistryofMSME
2. National Manufacturing Competitiveness Programme (NMCP)
1. Launchedin2005
2. Aimstoincreasecompetitivenessinthefaceofliberalizationandmoderationoftariffrates
3. ImplementedbytheNationalManufacturingCompetitivenessCouncilfunctioningundertheMinistryofMSME
3. Scheme of Fund for Regeneration of Traditional Industries (SFURTI)
1. Launchedin2005
2. Aimstoachievecomprehensivedevelopmentofclustersofkhadi,villageandcoirindustries
3. ImplementedbytheKVICandtheCoirBoard
4. Rajiv Gandhi Udyami Mitra Yojana (RGUMY)
1. Launchedin2008
2. Aimstoprovidesupportandassistancetofirst-timeentrepreneurs
3. Helpsindealingwithvariousproceduralandlegalformalitiesrequiredfortheestablishmentoftheenterprise
4. ImplementedbytheMinistryofMSME
Keywords:India,ias,upsc,civilservice,studymaterial,generalstudies,free
Sources:BusinessPortalGoI,MinistryofMSME
PREVIOUSWEEK:INDUSTRIALPOLICIES&PROGRAMMES
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INDUSTRIAL POLICIES AND PROGRAMMES IN INDIA
Overview
IndustrialpoliciesandprogrammesinIndiafallunderthepurviewoftheMinistryofHeavyIndustryandPublicEnterprises,andtheMinistryofCommerceandIndustry
TheMinistryofHeavyIndustryandPublicEnterprisecontainstwodepartments:
DepartmentofHeavyIndustries
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DepartmentofPublicEnterprises
TheMinistryofCommerceandIndustryhastwodepartments:
DepartmentofCommerce
DepartmentofIndustrialPolicyandPromotion
MostindustrialpoliciesthusfallundertheDepartmentofHeavyIndustriesandtheDepartmentofIndustrialPolicyandPromotion
Compulsory licensing
Thegovernmentrequirescompulsorylicensesforcertainspecifiedindustries
Thislicensingismainlyonaccountofenvironmentalandstrategicconcerns
Industries requiring compulsory licensing include
Alcoholicdrinks
Cigarsandcigarettesmadefromtobaccoandtobaccosubstitutes
Aerospaceanddefenceequipment
Allitemsrelatedtouseofatomicenergy
Explosives
Hazardouschemicals
Inadditiontotheabove,certain items are reserved for manufacture by small scale industries only. Non-smallscaleindustriesarerequiredtoobtainlicensesand
undertakeanexportobligationof50%
Drugsandpharmaceuticalsweretakenoffthecompulsorylistin2005
INDUSTRIAL POLICIES
Automobile Policy
1. Objectivesofthepolicyinclude
Emergeasaglobalsourceforautomobilecomponents
Establishaninternationalhubformanufactureofsmallpassengercars,andakeycentrefortractorsandtwo-wheelers
Ensureatransitiontoopentradeatminimalrisktotheeconomy
Assist development of vehicles using alternative energy sources
Developmentofsafetyandenvironmentstandardsatparwithinternationalstandards
2. ThePolicyassuresautomaticapprovalforFDIupto100%
3. Usedvehiclesimportedintothecountrytomeetenvironmentalstandards
4. The Policy is implemented by the Department of Heavy Industry, Ministry of Industry and Public Enterprises
Industrial Policy
Launchedin1991
ImplementedbyDepartmentofIndustrialPolicyandPromotion,MinistryofCommerceandIndustry
Objectivesinclude
Maintainsustainedgrowth
Enhancegainfulemployment
Optimalutilizationofhumanresources
Attaininternationalcompetitiveness
ThePolicyenshrinestheliberalisationofindustriallicensingpolicy
The Policy enshrines the establishment of Software Technology Parks (STP) and Electronic Hardware Technology Parks (EHTP)
FDI Policy
IndiahasoneofthemostliberalFDIpoliciesamongdevelopingcountries
FDIupto100%isallowedintheautomaticrouteinallactivitiesexceptthefollowing,whichrequirepriorapproval
Prohibitedsectors
Industriesthatrequireacompulsorylicense
Proposalsinwhichtheforeigncollaboratorhasanexistingcollaborationinthesamefield
AcquisitionofsharesinanIndiancompanyinthefinancialservicessector
Intheautomaticroute,nogovernmentalapprovalisrequired
FDIinactivitiesnotcoveredundertheautomaticroute,approvalfromGovernmentinrequired.Such approvals are granted by the Foreign Investment Promotion
Board
Sectors prohibited for FDI include
Gamblingandbetting
Lottery
Atomicenergy
Retailtrading
Agriculture(exceptHorticulture,animalhusbandry)andplantations(exceptteaplantations)
North East Industrial and Investment Promotion Policy (NEIIP)
Launchedin2007
ImplementedbyDepartmentofIndustrialPolicyandPromotion,MinistryofCommerceandIndustry
Covers Arunachal Pradesh, Assam, Manipur, Mizoram, Nagaland, Meghalaya, Tripura and Sikkim
Majorinitiativesincludesubsidyforinfrastructureexpansion(25%),exemptionfromincometaxandexciseduty(100%)
IndustriescoveredbythePolicyinclude
Services
Biotechnology
Powergeneration
The nodal agency for the Policy is the North East Industrial Development Finance Corporation (NEDFi)
INDUSTRIAL PROGRAMMES AND SCHEMES
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HardwareandITsolutions
Workersafety
Environmentalandwastemanagement
Industrial Infrastructure Upgradation Scheme
Launchedin2001
ImplementedbyDepartmentofIndustrialPolicyandPromotion,MinistryofCommerceandIndustry
Centralgovernmenttosponsor75%ofexpenditure
Activitiescoveredundertheschemeinclude
Physicalinfrastructure(suchasroad,wateretc)
Effluenttreatment,wastedisposal
ITinfrastructure
R&Dinfrastructure
Qualityandbenchmarkinginfrastructure
Marketinginfrastructure
Industrial Park Scheme
Launchedin2002
ImplementedbyDepartmentofIndustrialPolicyandPromotion,MinistryofCommerceandIndustry
Envisagestheestablishmentof
Industrialmodeltownsforthedevelopmentofindustrialinfrastructure
Industrialparkswithfacilitiesforindustrialpurposes
GrowthCentres,toactashubsforindustrialactivityintheunderdevelopedareas
Please Note: From next week, articles on Indian Economy will be moved to Mondays. The next Indian Economy feature will be on 14 Dec 2009.
Keywords:india,ias,upsc,studymaterial,generalstudies,indianeconomy,free
PREVIOUS WEEK: INDUSTRY IN INDIA~~~~~~~~~~~~~~NEXT WEEK: SMALL SCALE INDUSTRIES
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INDUSTRY IN INDIA
AUTOMOBILE INDUSTRY
Overview
Indianautomobileindustryistheninthlargestintheworld
Annualproductionofover2.3millionunits
India is the 4th largest exporter of automobiles in Asia, behind Japan, South Korea and Thailand
About Maruti India
In May 2007, the GoI sold its share in the enterprise, and no longer has a stake in the company
Manufactured in Bangalore
Headquarters
In India
Audi
Germany
Aurangabad
BMW
Germany
Madras
Chevrolet
USA
Pune
Fiat
Italy
Ford
USA
Madras
Honda
Japan
Noida
Hyundai
South Korea
Madras
Mercedes-Benz
Germany
Pune
Mitsubishi
Japan
Thiruvallur (TN)
Nissan
Japan
Madras
Renault
France
Czech Republic
Aurangabad
Toyota
Japan
Bangalore
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Volkswagen
Germany
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Pune
PHARMACEUTICALS INDUSTRY
Overview
Indiaisinpositiontomeet70%ofdrugdemandinternally
ImportantdrugsproducedinIndiaincludepenicillin,flumeguine,pefloxacin,ramipiriletc
PublicsectorcompaniesinthepharmaceuticalsectorincludeIndianDrugsandPharmaceuticals,HindustanAntibioticsLtd.,
Over60%ofbulkdrugsexported
History of pharmaceutical sector
First pharmaceutical company in India was the Bengal Chemical and Pharmaceutical Works established in Calcutta in 1930
First public sector pharma company was Hindustan Antibiotics Ltd. founded in Pimpri (Maharashtra) in 1954. ItwasalsothefirstcompanyinIndiatolauncha
recombinantDNAproduct,Hemax,in1993
PatentsAct1970madepharmaceuticalsectorunsuitableforforeigncompaniestherebyencouragingIndiancompanies
InJan1995,governmentamendedthePatentActtoreinstateproductpatentsforthefirsttimesince1972
ThiswasincomplianceoftheWTOsTradeRelatedAspectsofIntellectualPropertyRights(TRIPS)agreement
Biotechnology
Indiasbiotechindustryaccountedfor2%ofthe$41bnglobalbiotechmarket
IndiahasthethirdlargestbiotechindustryintheAsia-Pacificregionandeleventhlargestintheworld
Biotechsectorismadeupprimarilyofsmallstartupfirm
GovernmentestablishedDepartmentofBiotechnologyundertheMinistryofScienceandEducationin1986
MinistryofScienceandTechnologyalsolaunchedBiotechnologyParksSocietyofIndiatoprovidetaxbreaksanddedicatedinfrastructure
Governmentallows100%FDIinbiotechnology
Important names in the pharmaceutical sector
Company
Key people
Headquarters
Notes
Ranbaxy
AtulSobti
Gurgaon
Hyderabad
SecondlargestinIndia
AnjiReddy
Dr.Reddys
GVPrasad
NicholasPiramal
AjayPiramal
Bombay
Cipla
YKHamied
Bombay
OldestinIndia
Worlds largest producer of anti-retroviral (AIDS) drugs
PioneeredAIDStreatmentdrug(nowstandard)
Biocon
KiranMazumdar-Shaw
Bangalore
Indiasleadingbiotechnologycompany
FifthlargestvaccinemakerintheWorld
WorldslargestmakerofmeaslesandDTPvaccines
SerumInstituteofInida
CyrusPoonawalla
Pune
Serumvaccinesimmunize50%ofworldschildren
Currently manufacturing vaccine for swine flu
OTHER INDUSTRIES
1. Steel industry
Indiaisthe8thlargestproducerofsteelintheworld
Itisthe2ndlargestproducerofspongeiron
However,Indiacontinuestobeaheavyimporterofsteelfromabroad
Tata Steel in Jamshedpur was the first steel plant in India and Asia (1907)
First government-established steel plant in India in Rourkela (1953) in collaboration with Germany
India is the fifth largest producer of steel in the world (China is the first)
2. Fertilizer industry
India is the 3rd largest producer of nitrogenous fertilizers in the world
However,Indiastillimportssubstantialamountsoffertilizers
firstfertilizerplantwasaSingleSuperPhosphateplantatRanipat(TN)in1906
3. Textile Industry
It is the single largest industry in India
Employs17%oftheworkforce
Accountsfor20%ofIndiasindustrialoutputand30%ofexports
Indiantextileindustryisthesecondlargestintheworld(behindChina)
India is one of the largest producers of cotton in world
Keywords:ias,studymaterial,generalstudies,indianeconomy,industry
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