Revive investment to boost growth, jobs: Economic Survey

The pre-Budget Economic Survey today called for investments, especially in infrastructure, to revive growth and jobs while carrying out tax and subsidy reforms for fiscal consolidation, projecting an upto 5.9 per cent GDP growth this year.
The Survey, tabled by Finance Minister Arun Jaitley in Parliament ahead of his maiden Budget tomorrow, also suggested touch measures to shore up public finances and reduce inflation.
Among the measures suggested are massive investment in infrastructure, market-linked reforms, boost to manufacturing, tax reforms and structural changes in various sectors to bring the economy back on track.
The fiscal situation of the central government is worse than it appears, given the acceleration of inflation from 2006 to 2014, the Survey said.
Moderation in inflation would help ease the monetary policy stance and revive the confidence of investors. With the global economy expected to recover moderately, particularly on account of performance in some advanced economies, the economy can look forward to better growth prospect in 2014 and beyond, it said.
The Survey acknowledged that inflation has eased but is still above comfort level.
After tabling the Survey, Jaitley told reporters that fiscal deficit for the current year will be 4.5 per cent which needs to go down further in the next two years.
In 2014-15, the Survey claims that the economy is poised to overcome the sub-5 per cent growth of GDP witnessed in the last two years which affected in particular the industrial sector.
It, however, sounded a cautious note saying agriculture production may be impacted this year if a likely El Nino torpedoes monsoon rainfall, putting pressure on food prices.
The Survey says investment can be revived by improving long term growth prospect. For this, reforms are needed on three fronts: creating a framework for sustained and low inflation, setting public finances on a sustainable path by tax and expenditure reforms and creating the legal regulatory framework for a well functioning market economy.
First, the government must ensure a low and stable inflation rate through fiscal correction, establishing a monetary policy framework, and creating a competitive national market for food.
Initiation of reforms on these fronts will reduce inflation uncertainty and restore a stable business environment. Further lower inflationary expectations would increase domestic household financial saving and make resources available for investment.
The government must put public finances on a sustainable path through tax and expenditure reforms. Tax reforms require a Goods and Services Tax (GST), Direct Taxes Code (DTC) and more
predictable tax administration.
Expenditure reforms must focus on public goods, new designs for subsidy programmes and mechanism for accountability.
"India requires the legal and regulatory frameworks for a market economy. This requires repealing the old legacy laws and creating state capacity to market reforms," it said.
The Survey said the defining challenge in India today is that of generating employment and growth. Jobs are created by firms when firms invest and grow. Hence it is important to create environment conducive for firms to invest.
The recent business cycle downturn has seen a sharp decline in investment. Reviving investment is therefore on top of the government's priorities.
As part of fiscal consolidation, raising the tax GDP ratio above the current prevailing levels is critical for sustaining the process of consolidation in the long run as compression of expenditure beyond a certain amount can be counter productive.
Calling for a new Fiscal Responsibility and Budget Management (FRBM) Act, it said, "Fresh thinking is required on a responsible fiscal policy framework... The modified act needs to take into account business cycles and to have penalties that are strong enough so that it cannot be ignored."

India has second fastest growing services sector: Survey

India has the second fastest growing services sector in the world with a compound annual growth rate at 9 per cent, just below China's 10.9 per cent, during 2001 to 2012, the Economic Survey said today.
Among the world's top 15 countries in terms of GDP, India ranked 10th in terms of overall GDP and 12th in terms of services GDP in 2012, it said.
"India has the second fastest growing services sector with CAGR at 9 per cent, just below China’s 10.9 per cent, during the last 11-year period from 2001 to 2012," the survey said.
It said that services share in world GDP was 65.9 per cent but its share in employment was only 44 per cent in 2012.
In India, the services sector had a high share in income at 56.9 per cent in 2012 with a lower share of 28.1 per cent in employment, it added.
In 2013-14 the growth rate of the services sector at 6.8 per cent is marginally lower than in 2012-13. This is due to deceleration in the growth rate of the combined category of trade, hotels, restaurants, transport, storage and communications.
The survey, which was tabled in Parliament today, said that services in India are emerging as a prominent sector in terms of contribution to national and states' incomes, trade flows, FDI inflows and employment.
Further, it said that the immediate challenge in this sector is revival of growth.
India’s services sector which was growing at a steady rate of over 10 per cent since 2005-06 has shown subdued performance in the last three years.
Revival, it said, could be achieved through reforms and speeding up of the policy decision making, a targeted approach with focus on big ticket services.
"Some services like software and telecom were big ticket items that gave India a brand image in services. While further focus on these services is needed to retain and further our lead, the time has come to focus on some other high potential big ticket items that have high manufacturing-sector and employment linkages," it added.
Going forward, it said, 2014-15 seems to augur well for the services sector with expansion in business activity in India.
"There are also signs of revival in growth of the aviation sector with the announcement of new players like Air Asia and Tata-SIA Airline after a turbulent period of withdrawals and losses by some airlines," it added.
Indications of revival in the world GDP and trade growth in general

and of developed countries in particular, could help in revival of the tourism and shipping sectors.
"With a stable government in place and growing optimism which could translate into investment and growth, some quick reforms and removal of some barriers and obsolete regulations in the services sector could help. The downside risk however is the fragile global situation," it said

Rail Budget 2014

Rail Budget Seeks Course Correction, Avoids Populism No Increase in Rail Fare

Stress on Resource Mobilization Through PSU Surplus, FDI and PPP

Bullet Train on Ahmedabad-Mumbai Corridor Proposed, Speed of Trains to be Increased in Nine Sectors

More Thrust on Passenger Amenities, Cleanliness & Efficient Station Management

Multi Pronged Approach for Improving Safety & Security, 4000 Women RPF Constables to be Recruited

Revamping Railway Reservation System into Next Generation e-Ticketing, WI-FI Services in Major Stations & in Select Trains, Mobile based Wakeup Calls for Passengers

58 New Trains Introduced; 11 Existing Trains Extended

Railway University and Innovation Incubation Centre to be Set UP

Top Priority to Transparency, e-procurement to be made

Compulsory in Higher Purchase, Online Registration for Wagons in Next Two Months

Highest Ever Plan Outlay of Rs. 65,445 Crore with Higher Allocation for Safety Measures

Increased passenger amenities, more safety measures, timely completion of projects and increased financial discipline are the main highlights of the Railway Budget 2014-15 presented by the Minister of Railways Shri D. V. Sadananda Gowda in Parliament today.

The Budget seeks course correction in the light of mismanagement, apathy, populism in starting projects and severe fund crunch that have inflicted the railways over the years, the Minister averred. For this, structural reforms will be introduced and resources will be mobilized through PSU surplus, FDI and PPP.

The Budget proposes multi-pronged approach to make Railway journey safe and secure and comfortable for passengers. More thrust has been placed on passenger amenities, cleanliness and efficient station management. Now all major stations will have foot-over bridges, escalators, lifts etc.

On safety and security, the Budget has proposed introduction of advance technology for rail-flaw detection to check causes of accidents, a significant amount has been kept for road-over and road-under bridges and a pilot project will be launched on automatic door closing in mainline and sub-urban coaches. In order to make women safer while travelling, the Railway will recruit 4000 women constables. Coaches for ladies will be escorted.

IT initiatives get a big boost in the Budget. Revamping Railway Reservation System into Next Generation e-Ticketing will be taken up with provision of platform tickets and unreserved tickets also over internet. The Railway has proposed real-time tracking of trains and rolling stocks, mobile based Wakeup Call System for passengers, mobile based destination arrival alert and Wi-fi Services in A-1 and A category stations and in select trains. Indian Railways has also planned paperless offices

Delhi and the diaspora

As India celebrates the return of the Kerala nurses trapped in Iraq’s civil war and New Delhi intensifies the effort to bring many others home, Prime Minister Narendra Modi must create a strong institutional framework to cope effectively with the recurrent crises involving Indian citizens abroad.

Over the last decade alone, Delhi had to launch two major military operations to rescue Indian citizens from war zones abroad. In Libya (2011), Indian armed forces evacuated nearly 18,000 people. In Lebanon (2006), the Indian navy helped get nearly 2,200 Indians, Sri Lankans and Nepalese out of the war zone. There have been other cases that have drawn much public attention in recent years — the violence against Indian students in Australia, the arrest of Indian traders in southern China and students caught in fake universities in the United States, to name a few.

Dealing with the diaspora — people of Indian origin, citizens living abroad, and stateless people who originally migrated from the subcontinent — has been a major preoccupation for independent India. The expansive globalisation of the subcontinent under the Raj in the 19th century saw significant movement of Indian labour and capital beyond the subcontinent. In the decades after Independence, the lack of opportunities at home drove many Indians abroad, especially to English-speaking lands and to the Gulf, after the oil boom there from the mid-1970s. The economic reforms at the end of the 20th century did not reduce the outward flows, but have added new streams to the Indian diaspora.

If citizens’ expectations from Delhi were low in the past, Delhi is now under great pressure domestically to respond purposefully to the challenges of securing the Indian abroad. Recall the importance S.M. Krishna, external affairs minister (from 2009 to 2012) in the UPA government, attached to the issue of the Indian students in Australia, and note current External Affairs Minister Sushma Swaraj’s vigour in leading the diplomatic effort on Iraq. And don’t forget the pressure from the Kerala and Punjab governments on Delhi in the last few days. If politicians understand the new pressures from below, the media accentuates them by 24×7 coverage of any Indians in trouble beyond borders.

More Indian passport holders are living today in foreign lands for work, education and business. According to one count, in 2012, there were nearly 11 million Indian citizens abroad. There are others travelling for pleasure. The number of Indians leaving national shores, on short or long trips, has gone up from a little over four million in 2000 to nearly 15 million in 2012. There are nearly 2,00,000 students abroad today. With more than 50 per cent of the Indian economyDelhi.

The BJP has always taken an extra interest in the diaspora. The prime minister, who successfully mobilised support from overseas Indians during

the general election, is well placed to take a major initiative on getting Delhi to more effectively discharge India’s responsibilities to citizens abroad.

Unclogging India,Problems that india must focus on priority basis,for ias mains(essay)

There has been a surfeit of articles giving ideas to Prime Minister Narendra Modi on how to renew and revive India. I have read them with care and found that one simple theme that is close to his heart is not getting much attention. It is the concept of unclogging India. I list 10 ideas to unclog different parts of our nation in increasing order of difficulty. Here is my list.

First, a serious attempt should be made to unclog our jails. Even though jails are a state subject, the BJP could lead with jails in the states that it runs. Currently, the government spends about Rs 3,500 crore on jails housing some 3,80,000 inmates, about 60,000 more than the capacity of the jails. More than 60 per cent of the inmates are under trial. Many of them have been picked up for no apparent reason and have often served even more than the full term of the sentence they would have received had they been convicted for the crime for which they had been booked.

Many are street kids. This is not alright in a just India. In 2005, there was a proposal to amend Section 436A of the Criminal Procedure Code to free undertrials who had served 50 per cent of the term they had been charged with, but to no avail. Implementing this proposal would be a great start.
Second, our ability to provide justice in India requires quick adjudication.

Cases in our courts take too long. There is, of course, the need to create more courts and appoint more judges. But can we begin by applying Peter Drucker’s famous line, “whatever gets measured improves”, to our courts? Can we get all high courts and the Supreme Court to share some statistics in Parliament publicly? Simple statistics, like how many cases they adjudicate each year, how much time, on average, a case takes to reach a judgment. We can go farther and seek an inventory of cases at the start of the year, the number of cases added each year, the number closed and the end-of-year statistic. We could also separate cases into issue-based categories and track their progress by court. The nation needs to know how efficient our courts are.

Third, we need to broaden our tax base, introduce the goods and services tax and simplify our direct taxes, but we should also consider cleaning up the number of tax cases under litigation. A few simple steps could be taken. First, the department could conduct an assessment of past collections from litigated tax cases. What was the number of cases they were successful in and what was their collection percentage, on average, using a simple segmentation of cases? Could the tax department offer the past collection rate as a one-time offer to pending cases by segment to bring them to rapid closure? The other simple suggestion forboth courts and the tax department would be to find out how many cases there are between different government departments or between state-owned enterprises under tax litigation, and see if they can be sorted through arbitration.

Fourth, with emails having become prevalent, we need to ensure that all government files shift to email. Only one copy of the final order and the noting should be stored in paper. Indeed, even this can be digitised and stored electronically. The speed of file movement will change if they move by email rather than paper.

Fifth, cut the multiplicity of identifiers and allow Indians to have a single unique identifier. Avoid getting in tangled in a needless controversy over Aadhaar. Given that 680 million Aadhaar numbers have already been distributed, the government should build on this system, correct it, but not lose it. The number of things it can simplify has often been discussed and cannot be underestimated. Let us move forward and not back.

Sixth, unlock the full potential of Indian banking — corporatise public sector banks, reduce government holding to below 50 per cent but retain the government as the single largest owner. This one act will give the public sector banks autonomy and the ability to compete with freedom. It will make ours the most stable banking system in the world, with private, foreign and listed government-controlled banks serving the national interest.

Seventh, unclog the hospitals. For a country that earns a lot of money through information technology, India has been slow to go digital in core social sectors. We need to strengthen primary healthcare with technology. We need to allow patients to be treated for basic ills remotely and use the services of good midwifes. Technologies like Skype and FaceTime will allow doctors to talk to patients and see them remotely. With the help of a midwife or nurse, this can take care of basic issues.

Eighth, mend state schools. There are 8,00,000 or so primary schools in India. As in healthcare, digital remedies could be used to fix the bottom. Create 22 regional education centres by language, connect schools, provide them with TVs, beam lessons in and create a call-centre operated by teachers who can answer questions. The current teachers could act as tutors. This is not a solution for the best schools but the bottom may improve.

Ninth, unclog our cities. As the prime minister noted in one of his early speeches in Varanasi, Indian cities are filthy. We must strive to create a movement to clean them. This has many dimensions and will take time But three major areas cannot be avoided anymore: first, build cheap and clean public toilets, especially close to slums — experiments like Sulabh Shauchalaya should be expanded and used in all slum developments. Second, well-constructed waste sites close to the top 20 cities in India are critical and existing ones need to be upgraded. Finally, a full revamp of our sewage systems is long overdue. Without this, real progress will be impeded.

Tenth, digitising land records would bea major advance for India. It would take one of the most litigious assets and create a clear basis for ownership. This will be a slow-moving project but we must start somewhere to set things right.

Imagine such an “accha” India

NASA builds world's first flying observatory

NASA has fitted a 17-tonne telescope with an effective diameter of eight feet on a modified Boeing 747 jetliner that the US space agency is using as a flying observatory to study stars.

The infrared telescope called “Stratospheric Observatory for Infrared Astronomy” (SOFIA) is mounted behind a sliding door that reveals it to the skies.

The jet can stay airborne for over 12 hours and its range is up to 6,625 nautical miles (7,624 miles).

According to NASA, “The data provided by SOFIA cannot be obtained by any other astronomical facility on the ground or in space.”

SOFIA is mobile, so it can better spot transient space events like supernovae and comets.

The telescope, built with the help from German Aerospace Centre (DLR), can easily be repaired or reprogrammed when necessary.

NASA plans SOFIA — now in Germany for its last extensive maintenance and refitting leg — to launch in 2015 which will keep flying for another 20 years, wired.com reported.

Russian award for Viswanathan Anand

Chess greats Viswanathan Anand (India) and Boris Gelfand (Israel) have been selected for the Russian Federation’s ‘Order of Friendship’ award, according to a FIDE release on Friday.

The awards recognise foreign nationals’ contribution to expanding friendship and cooperation with the Russian Federation and to the development of economic, scientific and cultural ties.

Anand and Gelfand played the FIDE world chess championship match at the State Tretyakov Gallery in Moscow in 2012.