India population - some key finds

Topic : Demographics (Prelims)/ Population and associated issues (Mains GS Paper I)

In this section, we investigate about some of the important features of the population. Again we would be depending upon the Census data for our analysis.

Sex-ratio (or female sex ratio)

• It is the number of females per 1000 of males.
• Sex ratio in India is 940 according to Census 2011. It was 933 according to Census 2001 ie the ratio has improved. (A latest update to Census 2011 has determined the sex-ratio as 943)
• The rural sex-ratio is 947 while the urban sex-ratio is 926.
• State-wise, Kerala records the best sex ratio with a figure of 1084 while Haryana is the worst performer with a figure of 877. Moreover, only Kerala and Puducherry are the states/UTs that comprises of more females than males.

Child-sex ratio 

• It is the number of females per 1000 males in the age group 0-6 years of the population.
• Child-sex ratio in India is 914 according to Census 2011. It was 927 according to Census 2001 ie the ratio has declined. (A latest update to Census 2011 has determined the child sex-ratio as 919) 
• Mizoram with a value of 971 is the best performer, while Haryana with a value of 830 is the worst performer.

The above data implies that, though the sex ratio has improved from the previous decade, it is set to dip in the future decades due to the effect of a falling child sex-ratio. Another observation is the poor sex-ratio in urban areas compared to rural areas. This is mainly attributed to urban in-migration that is mainly constituted by the rural male youth.

Reasons for neglect of girl-child and and low child sex ratio

• Patriarchal mentality prevalent in the society that believes the girl child to be a burden. In many societies, lineage and inheritance runs through the male line.
• Lack of education and poverty, especially in rural areas.
• Exorbitant dowry demand. 

This leads to the neglect of the girl child right from her birth. This has resulted in umpteen number of female foeticides/infanticides in India. This has been further catalysed by

• Small family norm - if every family is to have fewer children, there is a greater anxiety that at least one of them should be male. 
• easy availability of sex determination tests and pre-conception sex selection facilities.

Programmes/policies

• Beti Bachao Beti Padhao (Save girl child, Educate girl child) - to address the dipping child sex-ratio and empower the girl-child in the country.
• National Policy for the Empowerment of Women, 2001 and other women empowerment programmes.
• Pre-Conception and Pre-Natal Diagnostic Techniques Act, 1994 - For regulation and prevention of misuse of diagnostic techniques and prohibition of sex selection.

The following are important initiatives to ensure safety and protection of women

• Domestic Violence Act, 2005
• Prevention of Women Against Sexual Harassment at Work-place Act
• Criminal Law (Amendment) Act - stringent punishment for sexual harassment included in the Code of Criminal Procedure. Age of consensual sex raised to 18 years.
• Nirbhaya Plan - has an important component in ensuring the safety of women in public transport.

Literacy rate

Who is considered a literate ?
Any citizen who is at least 7 years old and who can read and write in any language.

Data on literacy rate

• Literacy rate of India is 74.04 % according to Census 2011. This was 64.8 % in 2001.
• Male literacy rate is 82.14%, while the Female literacy rate is 65.46%.  Significantly, the females who became literate during the last decade has outnumbered the males. But gender gap in outcomes still persists as the data shows.
• State-wise Kerala recorded the highest literacy rate of 93.91% while Bihar, with a value of 63.82% is the worst performer. 
• Again, Kerala tops in female literacy rate (91.98%), while Rajasthan has the lowest value (52.66%)

A low literacy rate has resulted in not so good socio-economic indicators like high population growth, ill-health etc. Moreover the persisting gender gap (that is more than 10%) in literacy has resulted in gender inequality in all sectors. 

Programmes/policies:

• Sarva Shiksha Abhiyaan - Universalisation of primary education
• Education Guarantee Scheme, "Back to School" camp - for school drop-outs
• National Literacy Mission - or Saakshar Bharath - for adult education ie for those above 15 years of age.

Urbanisation

India's urban areas have acted as the engines of growth, no surprise we witness expansion of urban-settlements.

What is an urban settlement?
The Census of India considers 3 criteria to identify an urban area.

• Minimum population of 5000
• Minimum density of population of 400 person per square km
• At least 75% of the male working - population should be involved in non-agricultural activities.

Such an area is considered as a Census town.

Further, the Government can give recognition to Census towns under a law or statute. It can also declare any cantonment (military) area as urban. Such areas are called as Statutory towns and may consist of urban bodies like municipalities, corporations or notified town-area committees.
According to Census 2011, India consists of 4041 Statutory towns and 3894 Census towns.

Data on urban population

• Urban population in India is 31.16% of the total (Census 2011). This was 27.78% in 2001. 
• The urban population added in the last decade outnumber the rural population added.
• State-wise, Maharashtra has the highest absolute population while Sikkim has the least.
• In percentage terms, Goa tops the list with 62.17% of its total population as urban, while Himachal Pradesh has the lowest value of 10.04%.
• The huge in-migrations to cities have resulted in sprawling of urban areas (with a core and suburbs), otherwise known as urban agglomerations. These have increased from 384(in 2001) to 475 (in 2011).
• Million cities(with a population of more than one million) have become 53.
• Megacities that has a 5 million plus population are eight in number viz. Mumbai, Delhi, Kolkata, Chennai, Bangalore, Hyderabad, Ahmedabad, Pune. 
• Mumbai is the largest city in terms of population. But, the Delhi NCR is the largest urban agglomeration if we include its suburbs like Gurgaon, Faridabad, Noida etc. 

The reasons for the large urban sprawls are two fold

• the push factors in rural areas ie the poor conditions and lack of employment avenues prompt the rural population to out-migrate to urban areas.
• the pull factors in urban areas ie better employment avenues and living conditions attract the rural population to urban areas.

Concerns:

• Uneven growth of urban areas.
• Institutional and structural failures that result from poor planning.
• Growth of slums that are deprived of legal recognition and hence neglected.
• Deterioration of environment and quality of life.

Programmes/policies

• AMRUT (Atal Mission for Rejuvenation and Urban Transformation) - An urban renewal mission, (replacing JNNURM) with a special focus on a healthy environment covering 500 cities.
• Smart Cities mission - developing 100 select smart cities by improving urban services and infrastructure management.
• Housing for All or Pradhan Mantri Aawaas Yojana - 2 crore homes to be made available by 2020, especially for the weaker sections in the slums.
• Shyamaprasad Mukherjee Rurban Mission - Providing basic infrastructure and community facilities  in rural areas. This would replace the earlier PURA (Providing Urban amenities in Rural Areas)

India Population - the age structure

Topic : Demographics (Prelims)/ Population and associated issues (Mains GS Paper I)

While the last article spoke about population growth, here we discuss about the composition of Indian population. We will be doing the analysis with the help of the available statistical data. If for the last article we used the Sample Registration System, here we will depend upon the Census - 2011. The main idea of this article would be the age-based classification of Indian population and the related implications.

On the basis of age, the population can be classified into three :

• Child population
• Working age population
• Old age population

Child population

Age : 0 - 14 years.

Percentage of total population(Census 2011)  - 31%

But this is very high in the Northern states of Bihar (40%) and Uttar Pradesh (36%), This generally follows from the high birth rate (CBR) in the above states. 

Concerns :

1. Child mortality - The Under 5 Mortality Rate (U5MR) in India is 49, short of the MDG goal of 42. The EAG + Assam are the worst performers while the South and the West are showing better indicators. The details of this issue given in the previous article.

2. Health and nutrition- A majority of health and malnutrition issues stem from the lack of proper care during pregnancy, birth and the infant stage. Hence health includes the reproductive health of the mother and the child health ie Reproductive and Child Health (RCH).

Another issue is marriage at a very young age, leading to pregnancy during the adolescent age. Adolescent Fertility Rate (AFR) or the number of births per 1000 women in the age-group 15-19 years is 32.45 according to a World Bank report of 2013.

On malnutrition, the National Family Health Survey(NFHS) gives the most authentic data. But the latest data (NFHS-4) is yet to be released. But the provisional data available with the Ministry of Women and Child Development indicates that India has drastically reduced the number of under-weight, stunted and wasted children from the 2005-06 levels. Also the number of infants below 6 months who are exclusively breastfed has dramatically shot up.

Data	2005 – 06	2013 - 14
Under-weight (< 5 yrs)	43.5	30.1
Stunted (< 5 yrs)	47.9	38.8
Wasted  (< 5 yrs)	20	15
Infants exclusively breastfed	46.4	71.6

Stunted - Shorter than standard height identified by WHO.

Wasted - low weight for height.

4. Drinking water and sanitation - Lack of proper sanitation facilities and contaminated water is leading to diseases like tropical enteropathy and diarrhoea. This leads to lack of proper absorption of food. Thus, even though nutritious food is given, the child may suffer from malnutrition.

5. Education - includes Early Childhood Care & Education (ECCE) followed by Primary Education.
Early childhood is defined as the period from conception through eight years of age. It is during the early years that children develop the cognitive, physical, social and emotional skills that they need to succeed in life. In India, particular focus is given to children in the age group 0 - 6 years.
After this comes the primary education, that is for children in the age group of 6 - 14 years.
The concern here are the poor facilities and a low quality of primary education. The Annual Survey of Education Report (ASER) has outlined substandard learning level among children in primary schools.

Programmes/policies:
Here are a few initiatives to plug the gaps in this sector.

• Reproductive and Child Health (RCH) - under NRHM - Infant and young child breast feeding
• Integrated Child Development Scheme (ICDS) - Nutrition for both children and pregnant mothers. Pre-school education in the category 3-6 years.
• Swachh Bharath Abhiyaan - to achieve complete sanitation and clean drinking water.
• Right to Education Act - Free and compulsory education for all children in the age group 6 - 14 years.
• Sarva Shiksha Abhiyaan - Universalisation of primary education ie from Class I to VIII, and ensuring nutrition of children.

Working age population

Age : 15 - 64 years
Percentage of total population(Census 2011)  - 64%
(some latest official documents refer to the working age as 15 - 59 years and the corresponding proportion is 62%)
This includes the population involved in economic activity. India has the greatest number in this class. In other words, we can tell India currently has a good demographic dividend.
Demographic dividend - The proportion of the working age population among the total.
As per the UNFPA it means the economic growth potential that can result when the share of the working-age population (15 to 64) is larger than the non-working-age share of the population (14 and younger, and 65 and older).
Youth population - Current median age (or the average) of India is 24 years and India is assumed to have the largest youth population by the year 2020. Again region-wise differences exist. Median age in Northern states is 21 while in Southern states like Kerala and TN it is around 31, almost a 10 year age gap. The northern states seems to have a younger population including children.

Concerns :

1. Education  - Low enrollment and lack of quality in secondary (Class IX - XII) and higher education ( graduation and above).
Gross Enrolment Ratio (GER) - It denotes the total enrollment in higher education among the population in the age group of 18 - 23 years. India currently has a GER is 20.4 (according to the All India Survey on Higher Education by the Ministry of Human Resources and Development) that is very low.

2. Skill development - Majority of youth population is uneducated and unskilled. They end up in the informal sector like construction. This large section need to be given formal education and training.
Among the formally trained people, 63% from Southern and Western states like Kerala, Maharashtra, and TN according to  the "State of urban youth of India 2012" report.

Programmes/policies:

• Rashtriya Madhyamik Shiksha Abhiyaan (RMSA) - providing universal access to secondary level education by 2017.
• Rashtriya Uchhathar Shiksha Abhiyaan (RUSA) - Improving the GER (in higher education) to 30% by 2020.
• National Policy on Skill Development and Entrepreneurship 2015( otherwise known as "Skill India") - to remove the disconnect between the demand and supply of skilled man-power under a separate ministry of Skill Development and Entrepreneurship.

Old age population

The Census has considered those above 60 years (rather than 65 years) as old aged. This is in line with the retirement age in formal employment.
Age group - Above 60 years.
Percentage of total population (Census 2011) - 8.5%
Again there are state-wise differences. Kerala with an elderly population of 13% tops the list while the Northern states figure at the end. According to the "Report on the Status of Elderly"  compiled jointly by the UNFPA and HelpAge India International, people aged above 60 yrs in India is currently 100 million and this would become 323 million by 2050, constituting one-fifth of the total population by then.

Concerns:

1. Health - Lack of facilities - both clinical and community - to treat age-related problems.

2. Social protection - Lack of finance post working age, due to absence of pension. The current pension schemes (old-age pension, widow pension, disability pension) involves very low amounts and are not properly targeted. The old-aged are further subjected to harassment by their relatives or others. The women are at a greater risk, since majority of them are dependent on their male counter-parts throughout their life-time.

3. Isolation - This need to be read together with the nuclearisation of families. Census 2011 point out that the number of households has increased substantially in the last decade, and the number of persons per household has come down substantially. There is no emotional support for the old-aged in such a situation.

Programmes/policies :

• Maintenance and Welfare of Parents and Senior Citizen Act, 2007 - to claim monthly maintenance for parents and senior citizens.
• National Programme for the Health-Care of the Elderly (NPHCE) - to provide preventive, curative and rehabilitative services to the elderly persons at various level of health care delivery system of the country.
• Atal Pension Yojana - for citizens in the unorganised sector after 60 years of age. The earlier Swavalamban scheme to be merged.

In short, the Government has its task cut out for transforming a favourable demographic dividend into a grand success. This requires timely interventions in all the age-groups. Thus the current situation presents both a crisis and an opportunity. A well handled crisis becomes an opportunity while a mis-handled opportunity becomes a crisis. Hence it is up to us to choose among these.

Population growth - the features and factors

Topic : Demographics (Prelims)/Population and associated issues (Mains GS Paper I)

Now let us do a little bit of data mining. Population studies comes with chunks of information that is quite difficult to analyse. The biggest problem is what sources to depend upon. The best method is to use the latest official data for your analysis. I would suggest the Census of India, the Sample Registration System (SRS), and the National Family Health Survey (NFHS) as the documents to depend upon.(the recently released Socio-Economic Caste Census also seems to be a good one). But since they come up with a lot of raw data, the challenge is to choose the useful information and to interpret those.  

To begin with, let us study about the various dimensions of the population growth in India.  As a matter of fact, India recorded a population of 127,42,39769 on last July 11 ie the World Population Day. With a growth-rate of 1.6 per cent a year, she is set to become the most populous nation overtaking China by the year 2031. 

Phases of population growth - The democratic transition model.

The growth rate of population is characterised by 3 main parameters :

Crude Birth Rate (CBR) : the number of live births occurring per 1,000 mid-year total population, in a given geographical area.

Crude Death Rate (CDR) : the number of deaths occurring per 1,000 mid-year total population, in a given geographical area.

Natural Change (NC) : CBR - CDR (measured per 1000 population). This denotes the net increase in population.

The different phases of population growth have been depicted in the following model.

Phase I - High stationary. Both CBR and CDR high and almost equal.

Phase II - Early expanding. Declining CDR on account of better health facilities that improves the life expectancy of the most vulnerable demographic group - children. But CBR remains the same since it requires behavioural changes for its control. This phase is marked by a rapid increase in population.

Phase III - Late expanding. CBR declines on account of better economic conditions, improved women's status and access to contraception. Still it is considerably higher than CDR resulting in a moderate population growth.

Phase IV - Low stationary. The population stabilises with both CBR and CDR being equal and low.

Now where is India placed in this model. For this analysis, we consider the decadal growth rate of population (ie increase over a 10 year period that coincides with the Census).

Phase I -  the period till 1920 when the decadal growth was either very low or even negative due to factors such as famines and epidemics.

Phase II - 1920 - 1980. Though slow in the initial decades, population increased at a rapid pace with the highest decadal growth of 24.80 during the 1961-71 period. 

Phase III - After 1980, the rate has been steadily declining and has reached 17.64 in the 2001-2011 period. 

Thus we can say that India is in  the IIIrd Phase of Democratic Transition. It is assumed that the population will get stabilised and reaches Phase IV by 2045. But a few are also arguing that this would get delayed further by a decade.

Determining growth - the alternate method

There is another way to determine population growth using the following two parameters:

Total Fertiltity Rate (TFR) : the average number of children that would be born per woman if all women lived to the end of their childbearing years and bore children according to a given fertility rate at each age.

Replacement Rate (RR) : the number of children each woman needs to have to maintain current population levels or what is known as zero population growth for her and her partner. In developed countries, the necessary replacement rate is about 2.1. The extra .1 child per woman is due to the potential for death and those who choose or are unable to have children. In less developed countries, the replacement rate is around 2.3 due to higher childhood and adult death rates.

Now Growth Rate can be approximately the difference between TFR and RR. This implies that as the TFR approaches the RR, the population is assumed to be stabilised. 

In India, the Sample Registration System gives the official data for birth, death and fertility rates. According to SRS-2013, the TFR in India is 2.3. The good news is that all but nine states have achieved a rate below this. Most of the states in the south and west have low TFRs while the EAG (Empowered Action Group - includes the states of Bihar, MP, UP, Rajasthan, Odisha, Chattisgarh, Jharkhand and Uttarakhand) states plus Assam have the worst values. While West Bengal records the least TFR at 1.6, the states of Bihar and Uttar Pradesh have values of 3.4 and 3.1 respectively. This implies that growth rate is high in many states in northern and eastern India, while it is low in the southern and western States.

Population stabilisation through the National Population Policy, 2000 (NPP)

The NPP was launched in 2000 with three broad objectives, which are as follows:

Immediate - Address the unmet needs of contraception, healthcare infrastructure and health personnel and to provide integrated service delivery for basic reproductive and child health.

Unmet need represents those sexually active women, who do not want more children or want to delay the next child, but still do not have any access to any contraceptive methods. 

The methods include contraceptive pills, condoms and intra-uterine devices (copper T) for spacing between pregnancies while female and male sterilisation (known as tubectomy and vasectomy respectively) are two permanent techniques. The family planning techniques are skewed towards sterilisation, that too female sterilisation thus restricting the choices of an ordinary woman. In addition to the National Family Welfare Programme (NFWP) , the GoI has introduced the Reproductive and Child Health (RCH) to fill this anomaly. But, it requires a behavioural change through proper IEC (Information Education and Communication)

Medium-term - Bring TFR to replacement levels by 2010 through implementation of inter-sectoral operational strategies. This objective is yet to be achieved as TFR hovers around 2.3 now.

Long-term - Population stabilisation by 2045, at a level consistent with sustainable economic growth, social development and environmental protection.

Other factors affecting the population growth

Here we discuss three indicators that have a bearing on the population growth. However, they are better identified as socio-economic indicators of a region. 

1. Infant Mortality Rate (IMR) - Number of infant deaths per 1000 live births. (Infant implies below one year age). 

2. Child Mortality Rate or Under 5 Mortality Rate (U5MR) - Number of child (under 5 years of age) deaths per 1000 live births.  

In India, southern and western States have been performing well while the EAG (Empowered Action Group) states and Assam have the worst indicators. As per the Sample Registration System (SRS) 2013, the Infant Mortality Rate (IMR) of India is 40 per 1,000 live births while the Under-5 Mortality Rate (U5MR)  is 49 per 1,000 live births. The Millennium Development Goal - 4 (MDG 4) envisages to reduce child mortality by two-thirds between 1990 and 2015. For India, the target is an IMR of 29 and an U5MR of 42. Considering the current levels, India will fall short of its targets.

But 15 States/UTs have already achieved IMR of 29 while 11 have achieved U5MR of 42. Kerala tops in both the indicators, with a value 12 and 14 respectively, while the states of Assam and Madhya Pradesh are the worst performers in both the categories.

Another important observation is that the neo-natal deaths (ie. below one month) account for around 56 per cent of Under-5 deaths in India which is much higher than the global average of 44 per cent. The progress in reduction of neo-natal mortality (below one month) has been slow and this is affecting India's achievements in the other brackets. As per the “State of the World’s Mothers Report, 2013” , India carries the greatest "birthday mortality risk" with more than three lakh newborns dying on their first day, every year.

The major causes of neonatal deaths are Infections such as Pneumonia, Septicemia and Umbilical Cord infection; prematurity i.e birth of newborn before 37 weeks of gestation and Asphyxia i.e. inability to breathe immediately after birth that leads to lack of oxygen.

The major causes of child and infant mortality are neonatal causes, pneumonia  and diarrhoeal diseases

3. Maternal Mortality Rate (MMR) - annual number of female deaths per 100,000 live births from any cause related to or aggravated by pregnancy or its management (excluding accidental or incidental causes). The age bracket is generally 15-49 years.

As per the SRS 2012, which is the latest available data, the Maternal Mortality Rate (MMR) in India is 178. The Millennium Development Goal - 5 (MDG 5) envisages to reduce maternal mortality rate by three-fourths between 1990 and 2015. In the case of India, this transforms into an MMR of 109 by the end of 2015 which remains an impossible task considering the current levels.

But three states - Kerala, Maharashtra and Tamil Nadu have achieved the goal. While Kerala tops the list with a value of 66, Assam languishes at the end.

The major medical causes of maternal deaths are haemorrhage, Sepsis, Abortion, Hypertensive disorders, Obstructed labor and “other causes”  like anaemia

Besides this, some of the socio economic determinants of infant, child and maternal mortality are illiteracy, low socio-economic status, early age of marriage, lack of women empowerment, poor environmental conditions e.g. sanitation, hygiene etc, lack of potable water, high parity, preference for home deliveries by family members or village dai and poor access to health facilities etc.

Under National Health Mission (which has been formed by integrating NRHM and NUHM), key steps have been taken to reduce IMR, U5MR and MMR. The major programmes are :

Janani Suraksha Yojana (JSY) - Promotion of institutional deliveries.

Janani Shishu Suraksha Karyakram - To supplement cash assitance under JSY to mitigate the burden of out of pocket expense incurred by mother and new-born

Navjaat Shishu Suraksha Karyakram - To promote basic new-born care and resuscitation

Integrated Management of Neo-natal and Childhood Illness (IMNCI)

India faces a double challenge - of stabilising the population, and ensuring that they grow healthy. Currently the population is stuck up in a vicious cycle of weak mothers giving birth to weak children. This trend need to be done away with, to achieve a healthy population that would steer the nation to glory.

Next : The composition of Indian population

Highlights of the Indian Economic Survey 2014-15

This article presents a bird's eye view of the Indian Economic Survey. I have selected 10 important topics with their explanations as given in the official document.

1. The re-surging Indian economy

The Indian economy that has been sagging are showing enough signs of a revival.
Four reasons have been attributed to it:

• A stable Government and its policies like deregulating diesel prices, raising gas-prices, Direct Benefit Transfer Scheme and a set of progressive legislations (GST, land acquisition, coal bill etc.)
• Decline in oil price and inflation : Oil prices have declined on account of over production across the globe and lack of demand in economies like the US which has the shale gas alternative now. The decline in oil prices have a cascading effect on the domestic economy thus bringing down the cost of goods in the value chain. The dip in the Wholesale Price Index is a good indicator.
• Monetary easing by the RBI : This is evident in the reduction of policy rate (REPO rate). It has resulted in the circulation of more money in the economy.
• Good prospects of monsoon :  This would provide a good boost for agriculture which is still the breadwinner for the majority of Indians.

2. Incrementalism Vs "Big Bang reforms" - the way ahead

An important question is whether we require Big Bang reforms to bring in growth?
Big bang reforms occur in the aftermath of major crises. In a robust democracy like India, where multiple actors and institutions are involved, it should be an exception rather than a norm. Moreover the economy is already showing good signs of a revival.

But issues like ramping up investment and rationalizing subsidies require decisiveness from the part of the Government. Hence what is required is boldness in sectors where the policy levers can be easily pulled combined with persistent incrementalism in other areas.

3. Moderation in inflation - a positive sign.

The following are the major reasons for the lowering inflation rates in India.

• Falling crude oil prices that have a cascading effect on the economy.
• Agriculture - Decline in global agricultural prices. Increases in domestic support prices to be moderate. Decelerating rural wage growth further relaxing inflationary pressures. An efficient system that would help in better price discovery of agricultural goods is the need of the hour.
• Inflation expectations - This implies the expectation or rather apprehension of house-holds about inflation. The inflation expectations that were persistently above actual inflation, but has dropped in the latest survey. This will moderate wage setting and thus reduce inflation.

4. The macro-economic trilemma

A rather new crisis confronting the RBI and other central banks in developing economies because of their integration with the global economy. It means that a country cannot have a stable exchange rate, free movement of capital and independent monetary policy, all at the same time. In India's case, the RBI does not have complete control over the money supply because of the influence of the global economy. This is explained below:
Suppose RBI increases the interest rate to curb inflation (monetary policy). This would attract foreign investment because of better returns. The coming of foreign capital would lead to injection of domestic currency in the market. The rise in availability of money would again result in inflation. Thus the vicious cycle repeats. RBI is trying to insulate the domestic economy by building up large foreign exchange reserves.

5. The JAM number trinity solution

The anti-poverty programmes that are subsidy based are in fact hurting the poor in an indirect manner. Both the central and state governments subsidises a wide range of products with the expressed intention of making these affordable for the poor. It includes rice, wheat, pulses, sugar, kerosene, LPG, naphtha, water, electricity, fertiliser, iron ore, railways. But most of these programmes are poor in targeting or are weak in their implementation. According to the latest NSSO data, the leakages in kerosene distribution via PDS amount to 41%, while those are 15% and 54% for rice and wheat respectively.

The JAM or Jan Dhan, Aadhaar Mobile trinity presents a technological alternative to improve the economic lives of the poor. The targeted, unconditional direct transfers would plug leakages on the one hand, while avoid the negative influence of intermediaries on the other. This is being implemented not just for the PDS but also for the anti-poverty programmes like the NREGA and NSAP. The Jan Dhan Yojana resulted in opening up Aadhar-linked bank accounts in many rural households. Mobile phones that have deeply penetrated in India and almost hit the 1 billion mark are assumed serve as the best platforms for information dissemination and cash transfers. Thus the three systems - Jan Dhan, Aadhaar and mobile would play a greater role in bettering the lives of the common man.

6. The balance sheet syndrome with Indian characteristics

Though the Government has accorded the private sector a crucial role in the economic growth and formulated the policies in this regard, private investment is yet to pick up due to many reasons.

The Indian corporate sector is weighed down by over-indebtedness and weak profitability. This is seen in the very low interest cover ratio (implies the cash flows are not even sufficient to pay back interest) and the high debt to equity ratio of many firms. There is no easy resolution of over-indebtedness due to the weak bankruptcy institutions. Further an unviable Public-Private-Partnership model and a deteriorating banking system adds to the woes of the private sector.

On top of all these, there is a typical Indian mentality of risk aversion which leads to absence of bold decisions during a crisis (known as inertial decision making). This is very evident in the case of Public Sector Banks which are reluctant to lend in a situation of rising NPAs, due to their greater accountability and Governmental oversight.

Hence for the short and medium term the public sector has a greater role to play since they can absorb shocks better. Public investment should happen not just in social and rural sectors but also in basic infrastructure like railways.

7. "The difficulty of exit" challenge

It is important that we are not just prudent enough to run a firm, but are also prepared in its clean-up if such an unexpected situation arises. There should be efficient mechanism to handle firms that are over-indebted. The weak institutions related to bankruptcy have resulted in delayed restructuring of projects. The stalled projects persist for years and constitute around 7-8 percent of GDP.
The Asset Reconstruction Companies which are partly owned by banks themselves and the Debt Recovery Tribunals are either over-burdened or inefficient. The SARFAESI Act for asset reconstruction and recovery, though seems to be strong in principle, but is weakly enforced in practice, While the big-defaulters walk scot-free, it is the small borrowers and the SMEs who face the heat under this legislation.

8. The double financial repression of the banks

The Indian banking system is affected by financial repression both on the asset side and the liability side, and hence the name double financial repression.

• Asset side : Financial repression on the asset side of the balance sheet is created by the statutory liquidity ratio (SLR) requirement that forces banks to hold government securities, and priority sector lending (PSL) that forces resource deployment in less than-fully efficient ways. Banks require deregulation(from SLR) and diversification of their assets (relaxing PSL) to tackle this challenge.
• Liability side : Financial repression on the liability side has arisen from high inflation since 2007, leading to negative real interest rates. This implies that interest rates charged by banks are in fact cancelled out by the rising inflation and this results in negative real interest rates. Another issue is the sharp reduction in financial savings of the households mainly due to the presence of alternate saving instruments like land and gold.

9. Manufacturing sector and  the "Make in India" challenge

Three major policy changes have been suggested:

• Improving the business environment by making regulations and taxes less onerous, building infrastructure, reforming labour laws, and enabling connectivity
• Industrial policy - providing subsidies, lowering the cost of capital, and creating special economic zones (SEZs)
• Protectionist policy for ensuring tradability of manufacturing - shielding domestic manufacturing from foreign competition via tariffs and local content requirements; and provide export-related incentives. This might invite the wrath of global institutions like the WTO. Another idea to eliminate negative protectionism, seen in the exemption of Countervailing duty(CVD) to imported goods that make them cheaper than the domestic goods.

10. The weakening of Indian exports

This is attributed to a few internal and external factors:

• A slowdown in global growth that has resulted in reduced demand. The sluggish growth in China and the Eurozone crisis are two major reasons.
• The rise of mega-regional trade agreements - Trade is gradually getting regionalised with the global institutions like WTO being replaced by powerful trade blocks. The Trans-Pacific Partnership (TPP) and the Trans Atlantic Trade and Investment Partnership (TTIP) are the major organisations formed under the leadership of the US, while China is pushing ahead the Regional Comprehensive Economic Partnership (RCEP) that mainly includes the Asian countries. For India, maintaining the status-quo, runs the risk of being excluded from from these large integrated potential markets. On the other hand, joining them would result in greater liberalisation obligations than any of the present Free Trade Agreements which India has signed with other nations.
• Domestic factors affecting the manufacturing and services sector. While the manufacturing is affected by weak infrastructure and challenging labour laws, the rising wages and the lack of skilled labour are the major worries in the service sector.