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Economic Survey 2016-17Volume 2-Analysis (Part 3)
By Shyam S Kaggod
The chapters that will be covered• Chapter 1 - State of the economy – an overview
• Chapter 2 - Fiscal Developments
• Chapter 3 - Monetary Management and Financial Intermediation
• Chapter 4 - Prices & Inflation
• Chapter 5 - Climate Change, Sustainable Development and Energy
• Chapter 6 - External Sector
• Chapter 7 - Agriculture and Food Management
• Chapter 8 - Industry and Infrastructure
• Chapter 9 - Services Sector
• Chapter 10 - Social Infrastructure, Employment and Human Development
Chapter 5 – Climate change, Sustainable Development and Energy
• India and PCA
• USA has announced its withdrawal from PCA
• It becomes the third country (Syria and Nicaragua)
• India ratified the PCA on 2nd October 2016
Ch-5
Ch-5International Solar Alliance
India and Energy• Majority of the energy supplied comes from the coal/thermal
• India has set an ambitious target of generating 175 GW of RE by 2022
Ch-5
India and Energy
Ch-5
Ch-5
But!• Deprivation
• Those who do not have access
• Those who do not access to secure energy
Ch-5
Use of Electricity
Ch-5
Initiatives of the government
• UJJWALA Scheme (PMUY - Pradhan Mantri UJJWALA Scheme)
• UJJWALA Plus Scheme
• PAHAL/DBTL
• DDUGJY
Ch-5
UJJWALA Scheme
Ch-5
Thermal Vs Renewable – Social Cost Analysis
• Private costs
Ch-5
Thermal Vs Renewable – Social Cost Analysis
• Social cost of carbon / Shadow price of carbon
• Health Costs
• Cost of Intermittency
• Opportunity cost of the land
• Cost of stranded assets
• Cost of the government incentives
Ch-5
Cost of the government incentives
Ch-5
Thermal Vs Renewable – Social Cost AnalysisCh-5
Thermal Vs Renewable – Social Cost Analysis
Ch-5
Green Initiatives of the government
• NAPCC (National Action Plan on Climate Change)
• NGCO (National Green Corridor Programme)
• NGHM (National Green Highways Mission)
• FAME (Faster Adoption of Hybrid and Electrical Vehicles)
Ch-5
NAPCC
Ch-5
Chapter 7 – Agriculture & Food Management
• Status of agriculture
• Majority of agriculture is rain dependent
• Land fragmentation
• Farmers are price takers
• Marginal farmers go for mixed farming
• Indebtedness
Ch-7
Risks in Agriculture
• Production Risks• Soil Health Card
• DBT in Fertilizers
• Weather related environmental risks• Micro-Irrigation
• PMFBY
• Credit risks• Informal credit
• Interest Subvention Scheme
• Price risks, Market and Policy Risks • Supply, demand and price volatility
• Price stabilization Fund
• e-NAM
• Model APMC Act
• Agriculture Produce trading and Development Act 2017
Ch-7
Food Management
• NFSA (National Food Security Act) 2013
• DCP (Decentralized Procurement Scheme)
• OMSS (Open Market Sale Scheme)
• Food Subsidy
• Buffer Stocks
Ch-7
IIP
Ch-8
Chapter 8 – Industry & Infrastructure
Time bound closure of CPSEs Ch-8
Civil Aviation• Though there is a huge potential, India has not been able to capture
the market• ASK (Available Seat Kilometers) of India is 38%
• The domestic airlines could carry only 36% of international traffic (to and from India)
Ch-8
Civil Aviation – The reasons for such outcome• ASA (Air Service Agreements)
• 6th Freedom of Air
• 5/20 rule (changed to 0/20 rule)
• Lesser wide bodied aircrafts
Ch-8
Civil Aviation – Way Out• Privatization of Air India
• Relook at 0/20 rule
• UDAN
Civil Aviation – 6th Freedom
Ch-8
UDAN – Ude Desh ka Aam NaagrikCh-8
Ports - National Waterways-Advantages
Highways Railways Inland Waterways
Movement (1 HP) 150 kgs 500 kgs 4000 kgs
Efficiency of 1 ltr fuel 24 tkm 85 tkm 105 tkm
Cost of development High Comparatively lesser than roadways
Lowest among three
Cost of transportation Rs 2.50/km Rs 1.50/km 25 paisa/km
Carbon footprint high Comparatively lesser than roadways
Lowest (50% of that of emission of trucks)
Ch-8
Ports - Waterways – India Vs China
China India
Length of navigable water Over 1,00,000 Kms Around 14,500 Kms
Transportation through waterways
47% 03%
Number of vessels Over 2,00,000 Over 1,000
Carrying capacity in a single voyage
Around 40,000 tonnes Around 1,500 tonnes
Ch-8
Power – UDAY
• State government to take up 75% of the debt of the discoms (50% in first year and 25% in the second year)
• The state government can issue bonds in the market
• Future losses to be taken in a graded manner
• Banks to stop issuing advances for discoms to finance their losses
Ch-8
Power - UDAY (contd…)
• Targets
• AT&C losses must be brought down to 15% by 2018-19
• The gap between average cost and tariff must be bridged
• Benefits to states
• Receive additional benefits from the central government
• Additional/priority funding through certain schemes
• Supply of additional coal at specified prices
• Procurement of low cost power
• Worry for the states-increase in the fiscal deficit
Ch-8
Power – UDAY - Evaluation
• 27 states/UTs have signed up for UDAY
• 15 states have issued UDAY bonds
• Many of the states have revised their tariffs
• The FD of the states has reached to 3.6% (it could have been 2.9% if UDAY was not implemented)
Ch-8
Power – UDAY - Evaluation
Ch-8
Petroleum and Natural Gas
• HELP (Hydrocarbon Exploration and Licensing Policy)• Uniform License
• Open Acreage Policy
• Change in revenue sharing model (profit sharing to revenue sharing)
• Freedom to price
• Discovered Small Fields Policy• Production to start at the earliest in the discovered blocks
• New revenue sharing model
• 100% FDI
• Single license
• PAHAL/DBTL
• PMUY (Pradhan Mantri Ujjwala Yojana)
Ch-8
Chapter 9 – Services Sector – TFS (Trade Facilitation in Services)
• It is a proposal on the similar lines of TFA (Trade Facilitation Agreement)
• Some of the proposals under TFS are• Social security portability
• Visa fees must be transparent, reasonable and non-restrictive
• Single window mechanism for foreign investment mechanism
• Cross-border insurance to boost medical tourism
• All modes of service supply in cross-border trade must be covered
Ch-9
Tourism• In case of tourism, India has not been able to perform
Ch-9
Tourism
Ch-9
Tourism – World Heritage Sites
Tourism - Initiatives
• e-Visa
• Swachh Paryatan App
• Tourist Infoline
Ch-9
Real Estate – Reforms – RERA Ch-9
Real Estate – Reforms – Benami Transactions (Prohibition) Amendment Act 2016
• Was introduced in Lok Sabha in May 2015
• The Bill seeks to amend the Benami Transactions Act, 1988
• The Act prohibits benami transactions and provides for confiscating benami properties
• The amended definition will include
• If the transaction is made in a fictitious name
• The owner is not aware of denies knowledge of the ownership of the property
• The person providing the consideration for the property is not traceable.
Ch-9
• The act establishes four authorities to conduct inquiries or investigations regarding benami transactions• Initiating Officer • Approving Authority • Adjudicating Authority• Administrator
• Appellate Tribunal
• Penalty Provisions
Real Estate – Reforms – Benami Transactions (Prohibition) Amendment Act 2016 (Contd…)
Ch-9
Chapter 10 – Social Infrastructure, Employment and Human Development
Education
• Primary Education
• Secondary Education
• Higher Education
Ch-10
Primary Education
Ch-10
Education – Programme Interventions
Ch-10
Health
National Health Policy 2017
• Promote universal access to quality healthcare
• Increase the public spending to 2.5% of GDP by 2025
• Create PHMC (Public Health Management Cadre)
• Intervention at early detection from the childhood
• National Healthcare Standards Organization
• To increase the life expectancy to 70 years (presently 67.5 years)
• To promote local production/manufacturing incentives will be provided
• Indigenous medical equipment and technology to reduce costs
• In terms of remedies-providing multiple options such as AAYUSH
• Provide redressal mechanism-Tribunals
Ch-10
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