Category Subjects Indian-Economy

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In1950,Indiasshareintotalworldtradewas1.78%.By2002thishaddroppedto0.8%
India has a total foreign trade of around USD 489 billion.OfthisimportsaccountedforUSD303billionand
Indian Economy #12(298.7KiB,2,466hits)
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
Special Economic Zones (SEZ)

IndiawasoneofthefirstcountriesinAsiatorecognizetheeffectivenessofExportProcessingZones(EPZ)
The first Export Processing Zone (EPZ) in Asia was established in Kandla (Gujarat) in 1965
The Special Economic Zone (SEZ) Policy was announced in 2000
The main objectives of SEZs are
Generationofadditionaleconomicactivity
Promotionofgoodsandservices
Promotionofinvestmentfromdomesticandforeignsources
Creatingofemploymentopportunities
Developmentofinfrastructurefacilities
SEZsfunctionundertheDepartmentofCommerce(MinistryofCommerceandIndustry)
S. No.
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
FINANCIAL MARKETS IN INDIA

Overview
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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
Securities and Exchange Board of India (SEBI)

Established1992,headquartersMumbai
Functions under the Department of Economic Affairs, Ministry of Finance
SEBIistheregulatorforfinancialmarketsinIndia
SEBIhasregionalofficesinNewDelhi,Kolkata,ChennaiandAhmadabad
ThemainresponsibilitiesofSEBIincludeprotectionofinterestsofinvestor,andthedevelopmentandregulationofsecuritiesmarkets
SEBIhasthreemainfunctions
Legislative functions: itdraftsregulationsandpoliciesforfinancialmarkets
Executive functions: conductsinvestigationsandenforcesaction
Judicial functions:passesrulingsandordersandarbitratesdisputes
Forward Markets Commission (FMC)
Functions under the Ministry of Consumer Affairs, Food and Public Distribution
The FMC is the chief regulator of forwards and futures markets in India
The main functions of the FMC include
AdvicetheUnionGovernmentonmattersrelatingtoforwardmarkets
Tomonitorandregulateforwardmarkets
Collectandpublishinformationrelatingtoforwardmarkets
TheFMCcurrentlyallowsfuturestradinginspecificspices,edibleoils,pulses,energyproductsandmetals
These forwards and futures exchanges in commodities are performed at specialised commodity exchanges in the country
IMPORTANT STOCK EXCHANGES IN INDIA
Bombay Stock Exchange (BSE)

Established1875,locationMumbai
The BSE is the oldest stock exchange in Asia
The BSE is the largest stock exchange in India(intermsofmarketcapitalization)
In terms of the number of listed companies, the BSE is the largest stock exchange in the world (withover4500listedcompanies)
The key index of the BSE is the SENSEX (BSESensitiveIndex).Itisacompositemeasureoftheperformanceof30keylistedcompanies
National Stock Exchange (NSE)
Established1992,locationMumbai
TheNSEisthesecondlargeststockexchangeinIndia(afterBSE)
In terms of number of trades in equity, it is the largest stock exchange in India and the third largest in the world
TheNSEisalsothesecondfastestgrowingstockexchangeintheworld
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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
25January2010|Tags:financialmarkets|NoComments
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INSURANCE IN INDIA
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
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Nationalisation of insurance
LifeinsuranceinIndiawasnationalisedbytheLifeInsuranceCorporationAct1956
All245life-insurancecompaniesinIndiaatthetimeweremergedtoformtheLifeInsuranceCorporation(LIC).
TheGeneralInsuranceBusinessAct1972nationalisedgeneralinsurancecompanies
Theexisting100generalinsurancecompanieswereamalgamatedintotheGeneralInsuranceCorporationofIndia(GIC).
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GOVERNMENT BODIES IN INSURANCE
AllgovernmentbodiesininsurancefunctionundertheMinistryofFinanceunlessotherwisenoted
Life Insurance Corporation (LIC)
The LIC is the largest life insurance company in India and also the nations largest investor
Itfundscloseto25%ofthegovernmentsexpenses
TheLICownsthefollowingsubsidiaries
LifeInsuranceCorporationofIndiaInternational:providesUSDdenominatedpoliciestoNRIs
LICNepal
LICLanka
LICHousingFinance
General Insurance Corporation (GIC)

The GIC is a holding company for four subsidiary companies
OrientalInsuranceCompanyLtd(NewDelhi)
NewIndiaAssuranceCompanyLtd(Mumbai)
NationalInsuranceCorporationLtd(Kolkata)
UnitedIndiaInsuranceCompanyLtd(Chennai)
The GIC is the sole re-insurance company in India
TheGICcoversinsurancefortheentirespectrumoftheeconomyfromshoestoaircraft,fromagriculturalwellstooilwells,fromchemicalmanufacturestosatellite
launchesetc
Insurance Regulatory and Development Authority (IRDA)

Established2000,headquartersHyderabad
TheIRDAwassetuptoprotecttheinterestsofpolicyholders,andtoregulatethegrowthoftheinsuranceindustry
SomeofthefunctionsoftheAuthorityinclude
Regulateinvestmentoffundsbyinsurancecompanies
Regulatemaintenanceofmarginofsolvency
Adjudicatedisputesbetweeninsurersandintermediaries
Agriculture Insurance Company (AIC)

Established2003,headquartersNewDelhi
TheAICispromotedbytheGICandNABARD
TheAICisunderadministrativecontrolofMinistryofFinance,butunderoperativecontrolofMinistryofAgriculture
The AIC offers area based and weather crop insurance schemes to farmers
Itisoneofthelargestagricultureinsurancecompaniesintheworld
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POLICIES AND PROGRAMMES
Social Security Scheme

ASocialSecurityFund(SSF)wassetupin1988-89forprovidingsocialsecuritythroughgroupinsuranceschemestotheweakersectionsofsociety
The SSF is administered by the LIC
TheSSFprovidesuptoRs5000ondeathfromnaturalcausesandRs25,000upondeath/disabilityduetoaccident
Janashree Bima Yojana (JBY)

TheJanashreeBimaYojanawaslaunchedin2000
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The JBY is a group insurance scheme.Theminimummembershipofthegroupshouldbe25persons

The JBY is administered by the LIC
TheJBYprovidesforinsuranceprotectiontoruralandurbanpoor.TheschemecoversBPLpeopleandabovepovertylinepeoplewhobelongtocertainidentified
occupationalgroups
TheschemeprovidesforcoverofRs20,000onnaturaldeath.TheschemealsoprovidespensionofRs200
Aam Aadmi Bima Yojana (AABY)

Launchedin2007
Provides insurance to the head of the family of rural landless households
Coversnaturaldeathandaccidentaldeath/disability
Theschemealsoprovidesadditionalbenefitofscholarshipsformaxtwochildrenbetween9thand12thstandards
Administered by the LIC
Universal Health Insurance Scheme (UHIS)

TheUHISismeanttoimproveaccessofhealthcaretopoorfamilies
Schemeprovidesforreimbursementofmedicalexpenses,deathandcompensationduetolossofearningcapacity
The UHIS targets only BPL families
National Agriculture Insurance Scheme (NAIS)

Launchedin1999
Protects farmers against losses due to natural calamities such as flood, drought, pestilence etc
Scheme is implemented by the Agriculture Insurance Company (AIC)
The Scheme is available to all farmers irrespective of the size of their land holdings
The Scheme covers all food crops and oil seeds.Italsocoverssomecommercialandhorticulturalcrops
Theschemehasuntilnowcoveredmorethan1.3millionfarmersand211millionhectaresofland
Pilot Weather Based Crop Insurance Scheme (WBCIS)

Launchedin2007,onapilotbasis
The WBCIS aims to cover farmers against anticipated crop failure due to adverse weather conditions
Theschemeisbasedonthefactthatweatherparameterscanaffectcropyieldevenwhenthefarmerhastakenallcaretoensureagoodharvest
Thepayoutsarebasedonhistoricaldatathatdetermineweatherthresholds/triggersbeyondwhichcroplossesareexpected
The WBCIS is implemented by the AIC
Theschemeiscurrentlybeingimplementedon30majorcropsincludinghorticulturalcrops
Currentlytheschemecoversmorethan110,000farmersand1.4millionhectaresofland
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PREVIOUS WEEK: BANKING
~~~~~ NEXT WEEK: SECURITIES & EXCHANGE
18January2010|Tags:insurance|NoComments
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BANKING IN INDIA
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
History of banking in India

The oldest banks in India were the General Bank of India and the Bank of Hindustan,both founded in 1786.Howeverbothbanksarenowdefunct
The oldest existing bank in India is the State Bank of India.TheoriginsoftheSBIgobacktotheBankofCalcutta(founded1806,renamedBankofBengalin1809)
TheBankofMadraswasestablishedin1843andtheBankofBombayin1868
The Bank of Bengal, Bank of Bombay and Bank of Madras merged to form the Imperial Bank of India in 1921. The Imperial Bank of India was renamed the
State Bank of India in 1955. Althoughanormalcommercialbank,theImperialBankofIndiaalsofunctionedasacentralgovernmentaluntil1935
The Reserve Bank of India was established in 1935
TheoldestjointstockbankistheAllahabadBank,establishedin1865.
ThefirstentirelyIndianjointstockbankwastheOudhCommercialBank(Faizabad,1881).However,itfailedin1958.ThenextoldestisthePunjabNationalBank
(Lahore,1895)
The Dakshina Kannada and Udipi districts of Karnataka (called South Canara), is known as the Cradle of Indian Banking
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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10/5/2012
Page 6 of 17
RESERVE BANK OF INDIA
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
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
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
List of RBI Governors

S.
Governor
Tenure
Sir Osborne Smith
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
Represented India at the Bretton Woods Conference 1944

ServedasMinisterofFinance1950-1956
Longest serving Governor
WasIndianAmbassadortoUSApriortoRBI
Sir Benegal Rama Rao
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
Witnessed nationalization of banks (1969)
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
May 1977 Nov
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
10/5/2012
16
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)
STATE BANK OF INDIA
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
CATEGORIES OF BANKS IN INDIA
Structure of banking in India. Number of banks given in brackets
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%
10/5/2012
Page 8 of 17
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
GOVERNMENT ENTITIES IN BANKING
1. Small Industries Development Bank of India (SIDBI)

1. Establishedin1990,headquartersLucknow
2. ThemainobjectiveoftheSIDBIistoaidthegrowthanddevelopmentofmicro,smallandmediumscaleindustriesinIndia
3. Itprovidesdirectcredittomicro,smallandmediumenterprises,supportsmicrofinanceinstitutionsandrefinancingtostatelevelfinancebodies
2. Industrial Development Bank of India (IDBI)
1. Establishedin1964,headquartersMumbai
2. TheIDBIisthetenthlargestdevelopmentbankintheworld.ItisoneofIndiaslargestpublicsectorbank
3. ItsmainobjectiveistoprovidecreditandotherbankingfacilitiestoindustriesinIndia
4. However,in2004theIDBIwasre-designatedasacommercialbank,followingtheIndustrialDevelopmentBank(TransferofUndertakingandRepeal)Act2003,
andrenamedIDBILtd
5. Followingthis,thecommercialbankingdivision,IDBIBankwasmergedintoIDBI
3. Industrial Finance Corporation of India (IFCI)
1. TheIFCIisthefirstdevelopmentfinanceinstitutioninthecountrytocatertotheneedsofIndianindustry
2. Established1948,headquartersNewDelhi
3. TheIFCIwasestablishedtoprovidelongtermlowinterestcredittocorporateborrowers
4. In1993,theIFCIwasre-registeredasacommercialcompanyundertheIndianCompaniesAct1956,andrenamedIFCILtd
4. National Bank for Agricultural and Rural Development (NABARD)
1. PartlyownedbytheRBI
2. Established1982,headquartersMumbai
3. NABARD serves as the apex development bank in India for economic activities in rural areas
4. The main objective of NABARD is to facilitate credit flow for agriculture and small scale industries
5. NABARDprovidesrefinancetoStateCooperativeAgricultureandRuralDevelopmentBanks(SCARDBs),StateCooperativeBanks(SCBs),RegionalRural
Banks(RRBs),CommercialBanksandotherfinancialinstitutionsapprovedbytheRBI
6. NABARDcoordinatestheruralfinancingactivitiesofallinstitutionsengagedindevelopmentalwork
7. NABARDhas28regionaloffices(statecapitals),oneSubOffice(inPortBlair)andoneSpecialCell(inSrinagar)
8. NABARD is famous for its Self Help Group (SHG) Bank Linkage Programme, which serves as an important tool for microfinance
5. National Housing Bank (NHB)
1. WhollyownedsubsidiaryoftheRBI
2. Establishedin1987,headquartersNewDelhi
3. Establishedmainlytoprovidelongtermfinancetoindividualhouseholds
6. Export-Import Bank of India (EXIM Bank)
1. Established1981,headquartersMumbai
2. ThemainobjectiveoftheEXIMBankistoprovidefinancialassistancetoexportersandimporterswithaviewtopromotingthecountrysinternationaltrade
3. ItactsastheapexfinancialinstitutionforfinancingforeigntradeinIndia
7. Bharatiya Reserve Bank Note Mudran Private Ltd (BRBNMPL)
2. Establishedin1995,headquartersBangalore
3. Mainfunctionistoaugmenttheproductofbanknotestomeetdemand
4. Thecompanymanagestwopresses:MysoreandSalboni(WestBengal)
8. Deposit Insurance and Credit Guarantee Corporation (DICGC)
2. Establishedin1962,headquartersMumbai
3. Indiawasoneofthefirstcountriestoprovidedepositinsurance
4. Mainobjectiveistoprovideinsurancetodepositorsagainstcollapseandbankruptcyofbanks
5. ProvidesdepositinsurancecoverageuptoRs100,000
Sources:ReserveBankofIndia,GovernmentofIndia,MinistryofFinance,Wikipedia
PREVIOUS WEEK: HOUSING
~~~~~
NEXT WEEK: INSURANCE
11January2010|Tags:banking,RBI|1Comment
(+5rating,7votes)
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
10/5/2012
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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%)
POLICIES AND PROGRAMMES

Allpolicies/programmesunderthepurviewoftheMinistryofHousingandUrbanPovertyAlleviationunlessotherwisenoted
National Urban Housing and Habitat Policy 2007

ThemainaimofthepolicyisAffordable Housing for All
ObjectivesofthePolicyinclude
Urban planning including urban local bodies, rural-urban balance and Mass Rapid Transit Systems (MRTS)
Affordablehousingincludingdevelopmentofhousinginfrastructure,technologicalmodernizationandsubsidiesforeconomicallyweakersections
Increasedflowoffundsfromgovernmentandprivatefinancialsources
Spatial incentives including relaxation of Floor Area Ratio and more efficient use of space by construction of high-rise buildings
Specialprovisionsforminoritiesandwomen
Jawaharlal Nehru National Urban Renewal Mission (JNNURM)

Launchedin2005
Itisamassivecitymodernizationprogramme
Appliesto63citiesinIndia
ProvidesCityDevelopmentPlans(CDP)foraddressinginfrastructuregapsrelatingtowater,sanitation,housingandroads
Includesthefollowingsub-missions
Basic Services for the Urban Poor (BSUP):providessevenservicestolowincomesettlementsi.e.securityoftenure,affordablehousing,water,sanitation,
health,education,socialsecurity
Integrated Housing and Slum Development Programme (IHSDP):providesthesevenservicestocitiesotherMissioncities
Interest Subsidy Scheme for Housing the Urban Poor (ISSHUP)

Launchedin2009
AppliestoEconomicallyWeakerSections(EWS)andLowIncomeGroup(LIG)
The scheme aims to encourage the poor to avail loan facilities through commercial banks/HUDCO for construction of housing
Provides a 5% subsidy in interest payment
Envisagesconstructionof310,000dwellingunitsinthecountry
Swarna Jayanti Shahari Rozgar Yojana (SJSRY)

Launchedin1991
Aims to provide gainful employment to urban unemployed
Promotessettingupself-employmentventuresandwageemploymentprospects
SponsoredjointlybyCentralandstategovernments(75:25ratio)
Integrated Low Cost Sanitation Scheme (ILCS)

Launchedin1980,revisedin2003
ILCSschemelaunchedtoeliminatedrylatrinesinIndia,whichinvolvecarryingofsewageontheheadsofscavengers
The Employment of Manual Scavengers and Construction of Dry Latrines (Prohibition) Act 1993seekstoremovethisunsanitaryandrestorehumandignityof
scavengers
Aimsinclude
Construct/convert low-cost sanitation units through sanitary two-pit pour flush latrines
Construct news latrines for EWS households having no latrines
Theschemecoversalltowns,butonlyEWShouseholds
FundedbytheCentre(75%),state(15%)andbeneficiary(10%)
The main target of the scheme is to convert 600,000 dry latrines by March 2010
GOVERNMENTAL BODIES AND OFFICES

Allbodies/officesunderthepurviewoftheMinistryofHousingandUrbanPovertyAlleviationunlessotherwisenoted
National Buildings Organization (NBO)

Establishedin1954
HeadquartersinNewDelhi
TheNBOisprimarilytaskedwithcollection,collation,analysisanddisseminationofstatisticsrelatingtohousingandconstruction
DatacollectedbytheNBOincludesconstructionactivity,buildingpermits/completioncertificates,pricesofbuildingmaterialsandwagesetc
TheNBOalsoconductstrainingcoursesforpersonnelengagedinhousingstatisticsatthestatelevel
Building Materials and Technology Promotion Council (BMTPC)

Establishedin1990
HeadquartersinNewDelhi
TheCouncilprovidesproveninnovativetechnologiesforentrepreneursinterestedinsettingupmanufacturingunitsinconstructionmaterials
Objectivesinclude
developandoperationaliseacomprehensiveandintegratedapproachfortechnologydevelopment,transferandinvestmentpromotion
10/5/2012
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promoteenvironment-friendlyandenergy-efficientmaterialsandconstructionpractices
Hindustan Prefab Limited (HPL)

Establishedin1953
PublicSectorUndertakingfunctioningundertheMinistryofHousingandUrbanPovertyAlleviation
LocatedinNewDelhi
HPLprovidescivilengineeringservicessuchasconventionalconstructionaswellprefabmaterials
HPL pioneered the production of pre-stressed concrete railway sleepers
HPListhefirstcompanyinIndiatoproduceprecastpre-stressedconcreterailwaybridgegirders
Housing and Urban Development Corporation Limited (HUDCO)

Establishedin1970
HUDCOisaPublicSectorEnterpriseundertheMinistryofHousingandUrbanPovertyAlleviation
HeadquarteredinNewDelhi
HUDCOsfocusisonthesocialaspectsofhousingandinfrastructuredevelopment,withpreferentialaccesstodisadvantaged
One in every 16 houses in the country has availed of HUDCOs assistance
ObjectivesofHUDCOinclude
Providelongtermfinanceforhousingconstruction
Tofinanceorundertaketheestablishmentofneworsatellitetowns
Tofinanceorundertaketheestablishmentofindustrialenterprisesofbuildingmaterials
PREVIOUS WEEK: PUBLIC FINANCE
~~~~~
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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
Repositories of public finance

1. Consolidated Fund of India
1. Consistsofallrevenuereceived,loansraisedandmoneyreceivedinrepaymentofloansbytheUnionGovernment
2. AllexpenditureincurredbyGovernmentisincurredfromtheConsolidateFund
3. No money can be withdrawn from this fund except under the authority of Parliament
2. Public Account India
1. Consistsofallotherreceiptssuchasdeposits,servicefundsandremittances
2. Usuallyconsistsoffundsthatdontbelongtothegovernment,andneedtobepaidback
3. Disbursements from the Public Account do not need authorization of Parliament
3. Contingency Fund of India
1. ContainsfundsformeetingunforeseenneedsincludingsupplementaryDemandforGrants
2. TheContingencyFundisplacedatthedisposalofthePresidenttoenableGovernmenttomeeturgentunforeseenexpenditure
3. Funds released from the Contingency Fund are released pending authorization from Parliament
Sources of Revenue
Mainsourcesofrevenuearecustomsduties,exciseduties,servicetax,corporateandincometaxes
Non-taxrevenuesconsistofinterestreceipts(includinginterestpaidbyRailways),dividendandprofits
Forstates,revenueismainlyfromtaxesanddutiesleviedbythestategovernments,shareoftaxesleviedbyUnion,andgrantsreceivedfromtheUnion
Forlocalbodyfinance,theprimarysourcesarepropertytaxes,octroiandterminaltaxes
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
Union Budget
TheUnionBudgetisastatementoffinancialpositionoftheUnionGovernment
TheobjectivesoftheBudgetinclude
Coordinationofresources
10/5/2012
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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)
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
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
Value Added Tax

By definition, VAT is a tax levied on the value added at each stage of production and distribution process.Itisanidealformofconsumptiontaxationsincethe
valueaddedbyafirmrepresentsthedifferencebetweenitsreceiptsandcostofpurchasedinputs
Value Added Tax (VAT) is a general tax on commodities to replace sales tax, surcharge and other entry level taxes levied by the states and Union Territories
VATisleviedonsaleofalltaxablegoods.VATisnotleviedifsalesofgoodsarenotmadeinthecourseoffurtheranceofbusiness
VAT is collected in stages: tax paid on purchases (input tax) is rebated against tax payable on sales (output tax). Theconceptofsecondsaleorresaletaxis
doneawaywith
VATcanbecomputedusingoneofthreetechniques
Subtraction method: taxrateisappliedtothedifferencebetweenthevalueoftheoutputandthecostoftheinput
Addition method: thevalueaddediscomputedbyaddingallpaymentsthatispayabletothefactorsofproducts(wages,interestpaymentsetc)
Tax credit method:thisentailsthesetoffofthetaxpaidoninputsfromtaxcollectedonsales
India uses the tax credit method for VAT computation
AdvantagesofVATinclude
Taxevasionbecomesdifficult.Businessescompelledtokeepproperrecordofpurchasesandsales,andkeepatrailofinvoices
Avoidsproblemofundervaluing
Increaseinrevenueastaxnetwidens
Uniformityintaxregimeavoidsconfusion
Permitseasyandeffectivetargetingoftaxrates,asaresultofwhichexportscanbezero-rated
Paritywithtaxstructuresinothercountries
PREVIOUS WEEK: SMALL SCALE INDUSTRIES
~~~~~
NEXT WEEK: HOUSING IN INDIA
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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
Keywords:India,ias,upsc,civilservice,studymaterial,generalstudies,free
GOVERNMENTAL ORGANISATIONS IN THE MSME SECTOR
1. Micro, Small and Medium Enterprises Development Organisation (MSME-DO)

2. AlsoknownastheOfficeoftheDevelopmentCommissionerMSME
3. It is the apex body for assisting the government for formulating and implementing policies for the MSME sector
10/5/2012
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4. TheMSME-DOprovidesfacilitiesformanagerialconsulting,technologyupgradation,qualityandinfrastructureimprovement,andhumanresourcestrainingand
development
5. FunctionsundertheMinistryofMSME
2. National Small Industries Corporation (NSIC)
2. Helpsinthefostering,aidingandpromotionofgrowthofMSME
3. Focusesonthecommercialaspectsofoperation
4. Providesservicesintheareasofmaterialprocurement,productmarketing,technologyacquisition,improvedmanagementpracticesetc
3. Khadi and Village Industries Commission (KVIC)
2. Providesemploymentopportunitiesinruralareasbypromotionanddevelopmentofkhadiandvillageindustries
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
EDUCATIONAL INSTITUTES FOR THE MSME SECTOR
TheGovernmenthasestablishedthreenationallevelEntrepreneurshipDevelopmentInstitutes.Theseinstitutesdeveloptrainingmodules,undertakeresearchandprovide
consultancyservicesfortheMSMEsector.AlltheseinstitutesfunctionundertheMinistryofMSME
Institute
NationalInstituteforMicro,Smalland
MediumEnterprises(NIMSME)
NationalInstituteofEntrepreneurshipand
SmallBusinessDevelopment(NIESBUD)
IndianInstituteofEntrepreneurship(IIE)
Location
Established
Hyderabad
1960
Noida
1983
Guwahati
1993
PROGRAMMES FOR THE MSME SECTOR
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
Sources:BusinessPortalGoI,MinistryofMSME
PREVIOUSWEEK:INDUSTRIALPOLICIES&PROGRAMMES
~~~~~~~~~NEXTWEEK:PUBLICFINANCEININDIA
14December2009|Tags:smallscaleindustries|3Comments
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INDUSTRIAL POLICIES AND PROGRAMMES IN INDIA
Overview
IndustrialpoliciesandprogrammesinIndiafallunderthepurviewoftheMinistryofHeavyIndustryandPublicEnterprises,andtheMinistryofCommerceandIndustry
TheMinistryofHeavyIndustryandPublicEnterprisecontainstwodepartments:
DepartmentofHeavyIndustries
10/5/2012
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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
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
Indian Leather Development Programme (ILDP)

Launchedin2007
Objectivesoftheprogrammeinclude
Augmentationofrawmaterialbase
Enhancementofcapacity
Addressingenvironmentalconcerns
GlobalmarketingofIndianleather
Activitiescoveredundertheschemeinclude
Modernisationofmachinery
10/5/2012
Page 14 of 17
HardwareandITsolutions
Workersafety
Environmentalandwastemanagement
Industrial Infrastructure Upgradation Scheme
Launchedin2001
Centralgovernmenttosponsor75%ofexpenditure
Activitiescoveredundertheschemeinclude
Physicalinfrastructure(suchasroad,wateretc)
Effluenttreatment,wastedisposal
ITinfrastructure
R&Dinfrastructure
Qualityandbenchmarkinginfrastructure
Marketinginfrastructure
Industrial Park Scheme
Launchedin2002
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
Established as Maruti Udyog Limited in Feb 1981
Market leader, credited for bringing an automobile revolution in India
First Managing Direct was R.C. Bhargava
In May 2007, the GoI sold its share in the enterprise, and no longer has a stake in the company
Two manufacturing facilities: Gurgaon and Manesar (near New Delhi)
About REVA India
Largest produced electric car in the world
Introduced in India in 2001
Manufactured in Bangalore
Travels 80 km on a 8 hour charge for a running cost of Rs 0.40 per km
Automobile companies and their bases

Company
Headquarters
In India
Audi
Germany
Aurangabad
BMW
Germany
Madras
Chevrolet
USA
Pune
Fiat
Italy
Pune (joint with Tata Motors), Madras
Ford
USA
Madras
Honda
Japan
Noida
Hyundai
South Korea
Madras
Mercedes-Benz
Germany
Pune
Mitsubishi
Japan
Thiruvallur (TN)
Nissan
Japan
Madras
Renault
France
Nasik (with Mahindra), Madras (with Nissan)
Skoda (owned by VW)
Czech Republic
Aurangabad
Toyota
Japan
Bangalore
10/5/2012
Volkswagen
Germany
Page 15 of 17
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
Largest pharmaceutical company in India
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)
Bhilai steel plant is the only producer of steel rails in India
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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Represented India at the Bretton Woods Conference 1944

Sir Benegal Rama Rao

Witnessed nationalization of banks (1969)

May 1977 Nov

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STATE BANK OF INDIA

CATEGORIES OF BANKS IN INDIA

Structure of banking in India. Number of banks given in brackets

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GOVERNMENT ENTITIES IN BANKING

1. Small Industries Development Bank of India (SIDBI)

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POLICIES AND PROGRAMMES

National Urban Housing and Habitat Policy 2007

Jawaharlal Nehru National Urban Renewal Mission (JNNURM)

Interest Subsidy Scheme for Housing the Urban Poor (ISSHUP)

Swarna Jayanti Shahari Rozgar Yojana (SJSRY)

Integrated Low Cost Sanitation Scheme (ILCS)

GOVERNMENTAL BODIES AND OFFICES

National Buildings Organization (NBO)

Building Materials and Technology Promotion Council (BMTPC)

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Hindustan Prefab Limited (HPL)

Housing and Urban Development Corporation Limited (HUDCO)

Repositories of public finance

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Value Added Tax

GOVERNMENTAL ORGANISATIONS IN THE MSME SECTOR

1. Micro, Small and Medium Enterprises Development Organisation (MSME-DO)

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EDUCATIONAL INSTITUTES FOR THE MSME SECTOR

PROGRAMMES FOR THE MSME SECTOR

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Indian Leather Development Programme (ILDP)

Indian Economy | IAS Help