Telling good #subsidies from bad The challenge, never easy for any country, is to identify the good ones while avoiding the addictive bad ones

Time was when changes in taxes, especially those on consumer goods, dominated the general speculation about annual Budgets in India. Over the last decade, that concern has given way to one about the fiscal deficit and the contribution of #subsidies to it. This has come about as much because of the realisation that taxes would affect the consumer prices at the margin, as by the realisation that increasing deficits caused by mounting subsidies could potentially destabilise the entire economy. Notwithstanding the recently changed macroeconomic numbers, this is in effect what happened between 2011 and 2013. The central deficit rose to 5.2 per cent of gross domestic product (GDP) on the back of higher subsidies for petroleum products. Subsidies by themselves rose sharply to over two per cent of GDP. In broad terms, these factors together were largely responsible for the lacklustre performance of the Indian economy.

The new government has moved towards market-determined diesel prices and raised passenger rail fares, long overdue. These steps were thought of as precursors of a larger restructuring of subsidies. Yet it would be premature to expect that the forthcoming Budget will contain bold proposals in this direction, for two reasons. First, subsidies and entitlements are easy to dole out, but infinitely more difficult to reduce and nearly impossible to remove in any society. Second, the recent electoral trauma in Delhi the Bharatiya Janata Party suffered at the hands of an unabashedly populist Aam Aadmi Party despite committing to match the freebies promised by the latter would make the government extremely wary of any steps that would attract the criticism of being anti-poor.

The classic libertarian economic philosophy of Friedrich von Hayek may have gained converts and acclaim in the last four decades, but even the most capitalistic economies of the United States and Germany have deeply entrenched subsidies as major parts of key economic activities. Both the United States and the European Economic Community have elaborate farm support programmes that subsidise farm incomes. These are major bones of contention at all international trade negotiations. In addition, every major economy offers some form of protection to favoured industries and protects its export turf zealously. All Western countries have in place substantial social-welfare programmes to protect the retirees and the not-so well off without seemingly compromising their commitment to free economies. An entirely market-determined price structure for goods and services is to be found only in the fiction of Ayn Rand.

India has had a long history of subsidising virtually everything, dating back to the planned economy days of early independence. Subsidies were provided indiscriminately. For example, irrigation water has almost always been charged nominally for all users. Power tariffs, rail fares, postal charges, public health facilities and education have all been priced well below what they cost. In the early 1960s, the newly established elite Indian Institutes of Technology charged Rs 200 a year for tuition and Rs 100 a year for rooms, ridiculously low even in those days. The benefit went mostly to upper-middle-class families who could pay many multiples of those figures for quality education.

The Economic Survey 2013-14 observes, "Subsidy programmes are particularly problematic when they hamper changes in prices and the consequent shifts in resource allocation which must take place." The Prime Minister's Economic Advisory Council had said in April 2013, "The open-ended nature of petroleum subsidies resulted in an explosive increase in subsidy burden." Considerable evidence exists that continuing high subsidy for urea has caused imbalance in fertiliser application, with possible adverse consequences for yields. Similarly, free irrigation water and negligible charges for electricity for pump sets in most states have resulted in large, avoidable usage of this increasingly scarce resource. The ever present problems of misdirection of subsidies, away from those who need it most, and the enormous possibilities of leakage are too well-known for elaboration.

But not all subsidies are wasteful or uneconomic. Toward the latter part of the last decade, this writer was involved in a programme to combat malaria in Tanzania, the single largest cause of death and morbidity in most of Africa. One recommendation that met with approval of all concerned - the government, the US president's initiative, and international charities such as the Global Foundation and the Bill and Melinda Gates Foundation - was the supply of insecticide-soaked bed nets at highly subsidised prices of under $1 each. The logic that this made the bed nets affordable for even the poorest and resulted in far lower deaths and morbidity, as also improved productivity, was readily evident and accepted. Five years later, it was reported that similar programmes had been started in other African countries as well with most encouraging results.

At home, free or subsidised supply of solar panels and batteries for lighting homes would reduce the need for kerosene for this purpose and reduce the burden on the already overloaded power utilities. Solar-powered fractional horse-power pumps could lift water in areas of high water table, which covers almost the entire Gangetic plain and many parts of coastal India. That would reduce the recurring cost of energy and capital cost of drawing long, low-tension power lines.

On a larger scale, cheap and efficient urban commuter transport made possible by subsidising its capital cost reduces the much larger recurring cost of work-related travel for their users and saves fuel. It also cuts urban congestion and pollution. We may complain about the Delhi air quality and the Mumbai congestion. But they would be infinitely worse without the Delhi Metro or the Mumbai locals.

Operation Flood, among the greatest Indian development successes, followed an imaginative approach. The European Economic Community, as it then was, was planning to gift India $1 billion worth of dairy commodities in the mid-1960s. Their free or subsidised distribution in India would have depressed the local market and killed all incentive. Instead, these commodities were recombined and sold as milk at market prices. The money was then used to set up large dairy-processing plants in districts, 70 per cent as loan and 30 per cent as grant. Farmers received free extension and price benefits of modern processing marketing, but no operating subsidies. That has propelled India to be the leading milk producer in the world.

Subsidies are like cholesterol, bad for the most part, but some good ones can be greatly helpful. They are mostly for one-time expenses, rather than recurring ones. The issue, never easy for any country, is to identify the good ones while avoiding the addictive bad ones.

#14thFinanceCommission (FFC) Report Tabled in Parliament;,samveg ias

14th #FinanceCommission (FFC) Report Tabled in Parliament; FFC Recommends by Majority Decision that the States’ Share in the Net Proceeds of the Union Tax Revenues be Raised to 42% Which is a Huge Jump from the 32% Recommended by the 13th Finance Commission

Article 280 of the Constitution of India requires the Constitution of a Finance Commission every five years, or earlier.  For the period from 1st April, 2015 to 31st March, 2020,  the 14th Finance Commission (FFC) was constituted by the orders of President on 2nd January, 2013 and submitted its report on 15th December, 2014.  The Finance Commission is required to recommend the distribution of the net proceeds of taxes of the Union between the Union and the States (commonly referred to as vertical devolution); and the allocation between the States of the respective shares of such proceeds (commonly known as horizontal devolution).  With regard to vertical distribution, FFC has recommended by majority decision that the the States’ share in the net proceeds of the Union tax revenues be 42%. The recommendation of tax devolution at 42% is a huge jump from the 32% recommended by the 13th Finance Commission.  The transfers to the States will see a quantum jump. This is the largest ever change in the percentage of devolution. In the past, when Finance Commissions have recommended an increase, it has been in the range of 1-2% increase. As compared to the total devolutions in 2014-15 the total devolution of the States in 2015-16 will increase by over 45%.  The consequence of this much greater devolution to the States is that the fiscal space for the Centre will reduce in the same proportion. As recorded in Chapter-8 of FFC’s Report, amongst other demands of the States, the States had demanded both an increase in share of tax devolution, and a reduced role of CSS.  In Paras 8.6 & 8.7 of its Report, the FFC has noted that “8.6:Another dominant view has been that a majority of the resources should flow in the form of tax devolution­­--- ” “8.7: An overwhelming majority of States have suggested reducing the number of CSS as well as outlays on them---.”  FFC has taken the view that tax devolution should be primary route of transfer of resources to States. It may be noted that in reckoning the requirements of the States, the FFC has ignored the Plan and Non-Plan distinction; it sees the enhanced devolution of the divisible pool of taxes as a “compositional shift in transfers from grants to tax devolution” (Para 8.13 of  FFC Report).  Thus, basically the FFC Report expects the CSS, in fact Central assistance to State Plans as a whole, to reduce and be replaced by greater devolution of taxes.  Keeping in mind the spirit of cooperative federalism that has underpinned the creation of  National Institution for Transforming India (NITI), the Government has accepted the recommendation of the FFC to keep the States’ share of Union Tax proceeds (net) at 42%.  In recommending horizontal distribution, the FFC has used broad parameters of population (1971) and changes of population since, income distance, forest cover and area.  The details of this criteria and the weight assigned to them are given in Annexure-1.  The State-wise share of the divisible pool of Central taxes, in percentage terms, is given in Annexure-2.  As service tax is not levied in J&K, the share of the States, in percentage terms has been calculated separately by FFC.  These are given inAnnexure-3.  The Finance Commission is also required to recommend on ‘the measures needed to augment the Consolidated Fund of a State to supplement the resources of the Panchayats and Municipalities in the State on the basis of the recommendations made by the Finance Commission of the State’. FFC  has recommended distribution of grants to States for local bodies using 2011 population data with weight of 90% and area with weight of 10%. The grants to States will be divided into two, a grant to duly constituted Gram Panchayats and a grant to duly constituted Municipal bodies, on the basis of rural and urban population.  FFC has recommended grants in two parts; a basic grant, and a performance grant, for duly constituted Gram Panchayats and municipalities. The ratio of basic to performance grant is 90:10 with respect to Panchayats and 80:20 with respect to Municipalities.  FFC has recommended out a total grant of Rs 2,87,436 crore for five year period from 1.4.2015 to 31.3.2020. Of this the grant recommended to Panchayatas is Rs 2,00,292.20 crores and that to municipalities is Rs 87,143.80 crores. The transfers in the year 2015-16 will be Rs 29,988 crores.  Inter-se share of each state in respect of local bodies grant is at Annexures-4 and 5.  The Government has accepted the recommendations of the Finance Commission with regard to grants to local bodies. The Finance Commission is also required to ‘review the present arrangements as regards financing of Disaster Management with reference to the National Calamity Contingency Fund and the Calamity Relief Fund and the funds envisaged in the Disaster Management Act, 2005 (Act 53 of 2005), and make appropriate recommendations thereon’.  FFC has recommended that up to 10 percent of the funds available under the SDRF can be used by a State for occurrences which State considers to be ‘disasters’ within its local context and which are not in the notified list of disasters of the Ministry of Home Affairs.  The FFC has noted in Para 10.26 as follows:  “The financing of NDRF has so far been almost wholly through the levy of cess on select items, but if the cess are discontinued or when they are subsumed under the Goods and Services Tax (GST) in future, we recommend that the Union Government consider ensuring an assured source of funding for NDRF”.  In view of the above, with regard to disaster relief, the Government has decided that the percentage share of the States will continue to be as before, and that the flows will also be of the same order, as in the existing system; and that, once GST is in place, the recommendation of FFC on disaster relief would be implemented in the manner recommended by the Finance Commission.    The Finance Commission is also required to make recommendation regarding the principles governing grants-in-aid of the States’ revenues, by the Centre. As noted by the FFC in Para 11.28, while calculating grants to the States they “have departed significantly from previous Finance Commissions, by taking into consideration a States’ entire revenue expenditure needs without making a distinction between Plan and Non-Plan”.  Taking thus into account the expenditure requirements of the States, the tax devolution to them, and the revenue mobilization capacity of the States, the FFC have recommended “Post-Devolution Revenue Deficit Grants” of a total of Rs. 1,94,821 crores, for the five year period.  The States of Andhra Pradesh, Assam, J&K, Himachal Pradesh, Kerala, Manipur, Meghalaya, Mizoram, Nagaland, Tripura and West Bengal (a total of 11 States) have been identified for receiving these revenue deficit grants.  The details are given in Annexure-6. The Government has accepted the recommendation in principle.  To summarize, the Grants-in-Aid to the States total to Rs. 5.37 lac crores is given in the Table given below:    Grants-in-Aid to States (Rs. crore) 1 Local Government(all States) 287436 2 Disaster Management(all States) 55097 3 Post-devolution Revenue Deficit     (11 States) 194821 Total 537354  As stated above, the compositional shift recommended by the FFC would substantially impact Central Assistance. In this regard, para 7.43 of the FFC Report states as follows : “Plan revenue expenditure of States is financed by States’ own resources, borrowing and Plan grants from the Union. The Plan grants include normal Central assistance, which is untied,additional Central assistance for specific-purpose schemes and transfers,special Plan assistance,special Central assistance,Central Plan schemes and CSS.For the purpose of our assessment of Plan revenue expenditure of States, we have included expenditure incurred on State Plans and States’ contribution to CSS. This excludes Union expenditure on CSS, central Plan schemes and North Eastern Council Plan schemes and externally aided projects financed through grants from the Union.  We have estimated the 2014-15 base year Plan revenue expenditure (as defined above) for each State, applying an annual growth rate of 13.5 per cent over 2012-13 and 2013-14.  For the purpose of our projection period, we have assumed an annual growth rate of 13.5 per cent over base year estimates for all the States, implying that the Plan revenue expenditure will increase at the same rate as the GDP growth rate.”  Based on the above, over 30 Centrally Sponsored Schemes have been identified which ought to have been transferred to the States because expenditure on them has already been taken into account as State expenditure, in arriving at the greater devolution of 42% to the States.    However, keeping in mind that many of these schemes are national priorities, and some are legal obligations (such as MGNREGA) and in order to underline the Central Government’s continued support to national priorities, especially with regard to schemes meant for the poor, most of these are proposed to be continued.  The Government has decided that only 8 Centrally Sponsored Schemes be delinked from support from the Centre.           Certain programmes of the Government will have to continue unaltered as they are either legal/Constitutional obligations, or are privileges available to the elected representatives for welfare of their constituents. Further, and more importantly it is proposed that the Union Government may continue to support   certain programmes which are for the benefit of the socially disadvantaged in an unaltered manner from its own resources.  In respect of various Centrally sponsored schemes, the sharing pattern will have to undergo a change with States sharing a higher fiscal responsibility for scheme implementation.  Details of changes in sharing pattern will have to be worked out by the administrative Ministry/Department on the basis of available resources from Union Finances. Other recommendations of the FFC         In addition to the recommendations regarding Vertical, and Horizontal devolution and grants, the FFC has made certain other recommendations. These relate to cooperative federalism, Goods & Services Tax, Fiscal Consolidation Roadmap, Pricing of Public Utilities and Public Sector Enterprises. The recommendations of the Finance Commission will be examined by the Government in due course in consultation with the concerned stakeholders.

Minimum Support Price

Major recommendations contained in the Report of National Commission for Farmers (NCF) are: i) Asset Reforms covering land, water, livestock, fisheries and bio-resources. (ii) Farmer-friendly Support Services including setting up of Bio-Technology Regulatory Authority and National Agricultural Bio-security System, thrust on extension services including agro-metrology, training and knowledge connectivity, credit and insurance, and remunerative marketing opportunities, inputs and services. iii) Curriculum reforms in the Agriculture Universities in order to promote entrepreneurship amongst the students. iv) Approach towards Special Categories of Farming, increase in farmers’ income through cooperative farming, contract farming, promoting small holders’ estates in order to improve viability of small and marginal farmers and entrusting the Panchayat Raj Institutions with responsibility for agriculture. v) National Loan Use Advisory Service to provide timely advice to farmers about optimum use of land, taking into account the climatic and market conditions. vi) Setting up of market Price Stabilization Fund and Agriculture Risk Fund and coverage of farmers under a comprehensive National Society Security Scheme. vii) Creation of a National Food Security and Sovereignty Board and a well defined Food Security Policy. viii) Rural non-farm livelihood initiatives to create non-farm employment opportunities in rural areas. ix) MSP should be at least 50% more than the weighted average cost of production. Based on the draft prepared by the NCF and after consultations with State Governments and the Central Ministries concerned, Government of India approved the National Policy for Farmers (NPF), 2007. Government monitors the status of implementation of the plan of action prepared for operalisation of NPF 2007. Action on major recommendations has been completed. NCF’s recommendation that the Minimum Support Price (MSP) should be at least 50% more than the weighted average cost of production was not accepted by the Government as MSP is recommended by Commission of Agricultural Costs and Prices (CACP) on objective criteria, considering a variety of relevant factors and prescribing an increase of at least 50% of cost may distort the market.

National Sports Awards Schemes Revamped

The Ministry of Youth Affairs and Sports has revised the Schemes of Rajiv Gandhi Khel Ratna Award, Arjuna Award, Dhyan Chand Award and Dronacharya Awards. In the revised Schemes, following major amendments have been made: (i) Selection Committee for Arjuna Award will be headed by Retired Judge of Supreme Court/High Court. (ii) A sportsperson of eminence/sports administrator/sports expert belonging to para sports will be member in Selection Committee for Arjuna Awards. (iii) Not more than one sportsperson of eminence/coach from a particular sports discipline shall be a member of the Selection Committee to avoid any bias in favour of a particular discipline. (iv) Nomination agencies are expected to send nominations of most deserving sportsperson(s)/coach(es) irrespective of whether sportspersons/coaches have applied to them for awards. Last year, Selection Committee for Arjuna Awards headed by Shri Kapil Dev made several suggestions for improving the Scheme of Arjuna Awards. Most of the suggestions have been accepted by the Government. In the marks criteria, more marks will be given for medals won in individual events. For team events, marks will be computed taking into consideration strength of the team. For Rajiv Gandhi Khel Ratna, Arjuna Awards and Dronacharya Awards, the weightage for performance in sports events has been reduced from 90% to 80% and weightage of marks to be given by the Selection Committee for factors like profile and standard of sports events has been increased from 10% to 20%. This will increase say of the Selection Committee in the process of selection and give sufficient paly to the profile and standard of sports events in determination of awardees. Following decisions have also been taken: (i) Proceedings of Selection Committee will be videographed. (ii) Detailed internal Standard Operating Procedures (SOPs) prepared to deal with nominations received from NSFs etc. (iii) Views of discipline experts to be obtained for shortlisted nominations in team game

Exercise Surya Kiran VIII Commences in Nepal

The Eighth India-Nepal Battalion level Combined Military Training named  Exercise Surya Kiran-VIII, commenced on 23 Feb 15 at Integrated Army Training Centre, Saljhandi, Nepal, with an impressive opening ceremony that saw the unfurling of the National Flags of both countries.             The Nepalese Contingent was represented by a Battalion from an Infantry Division of Nepalese Army while Indian side was represented by an equivalent strength from a Mountain Brigade.   Major General Padam Villas Karki of Nepalese army welcomed the Indian soldiers and urged both contingents to achieve optimum cohesion and interoperability to achieve military objectives of the exercise. He stressed upon importance of free exchange of ideas and concepts between the troops and the necessity to learn each other’s experiences.             The focus of the ongoing exercise is to carry out Counter Insurgency and Counter Terrorist Operations in mountainous and jungle terrain and to practice facets of Humanitarian Assistance and Disaster Relief including actions to be taken during Pandemic, Epidemic and various other humanitarian assistance situations. Aviation aspects and environmental conservation are also included in the scope of this exercise. The two week long exercise will see the contingents hone their tactical and technical skills in countering insurgency and terrorism. State of the art equipment for surveillance and tracking, specialist weapons for close quarter battle with terrorists, explosives and IED detectors, as well as the latest communication equipment are being fielded by both sides. Both sides will train, plan and execute a series of well developed combined tactical drills for neutralisation of likely threats that may be encountered in Counter Insurgency / Counter Terrorism operations.

PM’s address at the first International Ramayana Mela

The Prime Minister, Shri Narendra Modi, today said that the time has come for us to realize the potential of soft power as an important strategy for external affairs and foreign relations. He was speaking after inaugurating the first International Ramayana Mela at FICCI Auditorium, in New Delhi. The Prime Minister said that world affairs are no longer on one track. Soft power is becoming increasingly critical in world affairs across the world, he said. He said that India should leverage its great traditions and culture in forging ties with countries around the world in a way that is deeper, more personal, and therefore, far more powerful. The Prime Minister said that all countries that have Gautam Buddha, Ram, and Ramayana as part of their own culture have a bond with India that transcends diplomatic ties. In the domain of soft power, he said, India has a lot to offer to the world. The Prime Minister spoke of the days when the television serial “Ramayana” used to air on Indian television and said that this tale brought together people across ages and geographies. Giving the example of Jatayu in Ramayana as a character who strove to protect a woman’s honour with “अभय” and “निर्भय” (fearlessness), he said that the story of Ramayana has a message at its core that remains relevant today, in this case, that of respect for women. The Prime Minister said that the concept of “Ram Rajya” was a vision that is relevant to this day: • It held an important message for health sector today: “अल्पमृत्यु नहिं कवनिउ पीरा। सब सुंदर सब बिरुज सरीरा।।“, i.e. None dies prematurely, all are physically healthy and strong. • It held a message for social harmony: “सब नर करहिं परस्पर प्रीती। चलहिं स्वधर्म निरत श्रुति नीती॥“, i.e. There is social harmony and an environment of mutual trust and love amongst all. All are fulfilling their dharma, their responsibility. • Of the conduct of citizens, it envisioned, “सब उदार सब पर उपकारी। बिप्र चरन सेवक नर नारी॥“, i.e. All are generous and giving. All men and women are in service of others. • Of social conduct, it said: “बयरु न कर काहू सन कोई। राम प्रताप विषमता खोई।।“, i.e. Under Ram’s grace, all disparities and differences melt down and none engage in enmity. The Prime Minister said that the Ramayana, thus, held the wisdom behind every aspect of an ideal society. He added that we need to overcome the view that connection with Delhi is connection with India, as India is a large and diverse nation. In this respect, he said, that the International Ramayana Mela is a positive beginning for connecting with the small towns and cities of India, thus truly connecting with the real India. Union Minister for External Affairs, Smt. Sushma Swaraj, was present on the occasion and outlined the format of the International Ramayana Mela in her opening remarks.

govt priority:Address by the President of India

Address by the President of India, Shri Pranab Mukherjee to the Joint Session of both houses of Parliament

Honourable Members, 1.       In this New Year full of aspirations and hope, I welcome you to the Joint Sitting of the Two Houses of the Parliament with the belief that your deliberations will be productive and useful. 2.       Dr. Shyama Prasad Mukherjee had said, “the greatest strength of India is her rich spiritual and civilizational heritage”. The core values of our civilization emphasize universal good - welfare of all human beings. The fundamental tenet of my Government is Sabka Saath Sabka Vikas– All Together, Development of All. Within a span of nine months, my Government has articulated and embarked on a comprehensive strategy for unleashing the full potential of our country and its precious resource of 125 crore people. Measures have been initiated to stir action in a range of fields from sanitation to smart cities, poverty elimination to creation of wealth, skill development to conquering space, tapping demographic dividend to diplomatic initiatives, enhancing ease of doing business to putting in place a stable policy framework, empowering individuals to ensuring quality infrastructure, ending financial untouchability to making the country a manufacturing hub, containing inflation to stimulating economy, igniting minds to ensuring inclusive growth, promoting cooperative federalism to encouraging a competitive spirit among the states. A strong beginning has been made. A promising future awaits us. Honourable Members, 3.       Poverty is a bane to dignified human existence. Development is actualized only when the last person gets a sense of fulfillment, especially, regarding his minimum needs. Pandit Deendayal Upadhyaya had laid emphasis on holistic development of each and every human being - Ekatm Manavata darshan (Integral Humanism). My Government is pledged to work for the welfare of the poor, the marginalized and the vulnerable sections of the society. 4.       Financial inclusion is critical to poverty elimination. My Government launched an ambitious Pradhan Mantri Jan Dhan Yojana to provide universal access to banking facilities – a bank account, having in-built accidental insurance with a Rupay debit card. I am happy to state that the coverage under the scheme is close to 100% with a record 13.2 crore new bank accounts being opened, 11.5 crore Rupay debit cards being issued and over ` 11,000 crore being deposited. This unprecedented target was achieved in less than six months, making it the largest such programme globally. 5.       To ensure that the benefits of developmental programmes reach the last intended beneficiary without leakages and impediments, Direct Benefit Transfer Programme is being implemented with renewed vigour. The biggest Direct Cash Transfer programme in the world, PAHAL, for transfer of LPG subsidy, has been extended across the country from 1st January, 2015, so far covering 75% of the user-households. In all, 35 schemes have been brought under Direct Benefit Transfer architecture. Special emphasis is attached to make Aadhar enrolment coverage universal. Honourable Members, 6.       Swachhata is an article of faith for my Government. Swachhata will have an overarching impact on the overall quality of life and well-being of a person, particularly the poor. Swachh Bharat Mission has been launched to achieve a Clean and Open Defecation Free India by October, 2019. Government has rolled out ‘Swachh Vidyalaya’ programme and is committed to construct a toilet in every school before 15th August, 2015. Swachhatahas a cascading impact on national development and the potential to generate wealth from waste. Sanitation and the idea of Swachhata require changing the mindset of the people. My Government exhorts each and every individual to be an active participant in this mission. I appeal to all honourable Members of Parliament to spend at least fifty percent of their MPLADS funds on Swachh Bharat Mission. 7.       India lives in her villages. My Government attaches the highest priority to sustainable socio-economic growth of rural areas. MGNREGS can be a powerful weapon to combat rural poverty. While implementing MGNREGS with renewed vigour, emphasis is being placed on improving quality and durability of assets under the programme, besides mandating that at least sixty percent of expenditure be directed for creation of agricultural infrastructure. In keeping with my Government’s focus on “Skill India”, “Deen Dayal Upadhyaya Grameen Kaushal Yojana” and “Deen Dayal Upadhyaya Antyodaya Yojana” have been announced. Saansad Adarsh Gram Yojana launched in October 2014, focuses on integrated and holistic development of our villages with active involvement of Members of Parliament. 8.       Housing is a fundamental requirement for dignified living. My Government is steadfast in fulfilling the aspirations of all households, particularly the poorest of the poor, to have a dwelling unit under the Mission “Housing for All” by 2022, marking 75 years of our independence. A set of fiscal and non-fiscal incentives have been devised to leverage the value of land holding with government and to afford flexibility to State Governments in designing their own customized housing programmes. To aid investment in housing sector, my government has liberalized FDI policy; increased tax incentives for housing loans and enhanced the corpus of National Housing Bank. 9.       My Government attaches paramount importance to safeguard the interest of farmers and families affected by land acquisition.  While taking utmost care to protect the interest of farmers, including their compensation entitlements, the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act has been suitably refined to minimize certain procedural difficulties in acquisition of land inevitably required for critical public projects of infrastructure and for creation of basic amenities like rural housing, schools and hospitals, particularly in remote areas. Honourable Members, 10.       Kisan is the sentinel of our food security. Annadaata Sukhibhava has been one of our fundamental civilizational values. My Government attaches enormous importance to the wellbeing of farmers. This will need value-added agriculture, market reform, use of technology and improving productivity in areas with untapped potential. The year 2015 has been designated as International Year of Soils. In view of the critical role of soil for productivity and farm output, a Soil Health Card Scheme has been launched. Price stabilization fund with a corpus of ` 500 crore has been set up for perishable commodities. To address the irrigation requirements of every village in an effective and sustainable manner, Pradhan Mantri Krishi Sinchai Yojana, is being launched. Extension programmes have been devised targeting resource-poor, small and marginal farmers, particularly focusing on organic farming and green house technology. Rashtriya Gokul Mission has been launched with the objective of conserving and developing indigenous cattle breeds. 11.     Food Processing has immense potential for generating employment in rural areas, particularly for the landless poor, besides guaranteeing remunerative price for the farm-produce. Creating infrastructure in rural areas to minimize supply chain losses is a priority. A special fund of ` 2000 crore to provide affordable credit to the units in 72 notified food parks has been made operational. Two Mega Food Parks, at Tumkur and Fazilka, each to provide direct/indirect employment to 30,000 people have been commissioned in the last 6 months. 12.     Former Prime Minister Shri Atal Bihari Vajpayee had said and I quote: “Poverty has multiple effects. Besides impacting our economy, it corrodes our democracy”.Inclusive growth covering the poorest of poor from the most vulnerable and disadvantaged sections of our society is my Government’s topmost priority. Thrust has been given to streamlining scholarships schemes for students from SC, ST, OBC, and minority communities to ensure timely disbursement to the beneficiaries. Government has set up a new Venture Capital Fund for SC entrepreneurs. To upgrade skill and training in traditional arts/crafts of minorities, a new scheme “Upgrading the Skill and Training in Traditional Arts/Crafts for Development (USTTAD)” is being launched. Outcome based integrated approach has been adopted for tribal development under the Van Bandhu Kalyan Yojana. Nanaji Deshmukh Scheme is being launched for construction of Hostels for Denotified, Nomadic and Semi-Nomadic Tribes. Honourable Members, 13.     Education is the priority of priorities for my Government. ‘Padhe Bharat Badhe Bharat’ has been launched to improve foundational learning outcomes. An initiative to map the entire country on a GIS platform to identify habitations without schools, has been taken. Pandit Madan Mohan Malviya National Mission on Teachers and Teacher Training has been launched to empower and increase the capacity of teachers. TheRashtriya Avishkar Abhiyan has been announced to imbibe scientific temper among students. To ensure access to education in the remotest areas, Ishan Vikas and Ishan Uday schemes have been started with focus on students of North-Eastern regions. My Government has formulated National Sports Talent Search Scheme for encouraging sporting talent amongst children in the age group of 8 to 12 through National Sports Development Fund and Target Olympic Podium. 14.     India has the largest population of youth in the world. Majority of her population is already in the working age group. To tap this demographic dividend and to bridge the demand-supply gap in skilled workforce, my Government has created a new Ministry of Skill Development and Entrepreneurship with the theme “Hunar hai to Kalyan hai”. A new “National Policy for Skill Development and Entrepreneurship” is on the anvil to align skilling initiatives with global standards. Focus will be on the youth from deprived households in rural areas. Public-Private Partnership is being fostered to create skill development models and channelize CSR funds into skilling activities. Honourable Members, 15.     My Government is committed to providing affordable and accessible health care to all its citizens, particularly the vulnerable sections, in an efficient and equitable manner. To reduce preventable deaths, India New Born Action Plan has been initiated and four new vaccines have been approved. ‘Mission Indradhanush’ has been launched to achieve universal immunization with special focus on 184 high priority districts across the country. To create an inclusive, enabling and empowering environment for Persons with Disabilities, my Government has launched new scholarship schemes for students with disabilities. A national help line with toll free number has been launched for those who need help against drug de-addiction and for rehabilitation. 16.     My Government has recently elevated the erstwhile department of AYUSH to a full-fledged Ministry with an objective to increase the global and local footprint of the traditional systems of healthcare, duly recognizing that our villages have been the repositories of our rich Ayurvedic heritage. National AYUSH Missionhas been launched to promote cost effective AYUSH services, strengthen the education system and facilitate availability of quality AYUSH drugs. Honourable Members, 17.     Women have had a place of reverence in our society since time immemorial. My Government has taken several measures to empower and protect the dignity of women. To provide complete support to women affected by violence, One Stop Crisis Centres, one in every State, are being set up for provision of integrated services including medical aid, police assistance, temporary shelter, and legal and psycho-social counseling. Another initiative has been the launch of Himmat, a mobile based application, to ensure women’s safety in Delhi. 18.     The unabated decline in Child Sex Ratio since 1961 is a matter of grave concern. This trend has to be reversed. To ensure survival, protection and education of the girl child, my Government has launched Beti Bachao, Beti Padhao Abhiyaan, which seeks to change mindsets to celebrate the girl child. A new small saving scheme ‘Sukanya Samriddhi Account’ has been notified for enabling the education of the girl child. A Bill to amend Juvenile Justice Act has been introduced in Parliament to reform the law relating to juvenile offences. Honourable Members, 19.     Shramik is the backbone of our economy. My Government believes in Shrameve Jayate and has taken several labour welfare measures. Apprentice Protsahan Yojana has been launched to promote apprentices in Micro, Small and Medium Enterprises in manufacturing sector. EPF subscriptions have been made portable benefiting casual workers in the unorganized sector. Under the Employees Provident Fund Act, the statutory wage ceiling and the minimum pension have been enhanced to ` 15,000/- and ` 1,000/- respectively. While my Government is fully committed to expand the job market and to promote the welfare of workers, it is also committed to bringing in transparency and accountability in enforcement of labour-related regulations. To this end, the Shram Suvidha Portal has been launched to ensure ease of doing business by allowing industry to register online and file a single online return instead of 16 separate returns. A transparent online inspection scheme has been launched. Recent amendments to the Apprentices Act, 1961 have made the legal framework friendly to both industry and employable youth. Honourable Members, 20.     Legal reform is one of the priorities of my Government. My Government believes that Governance and reforms are a combined effort of Team India, consisting of the Parliament, Union Government, State Legislatures, State Governments and the People of India. An example of this collaborative effort is the reform in the process of appointment of Judges to the High Courts and Supreme Court and the legislation to set up National Judicial Appointments Commission. The Government is also committed to repeal the obsolete and redundant laws. A Committee constituted for this purpose has identified 1741 Central Acts for repeal under various categories. 21.     Maximum Governance Minimum Government is the guiding principle of my Government. With an aim to take Governance to the doorstep of the poorest of the poor in remotest areas, focus is on simplification of official procedures and reducing the decision-making levels in Government by leveraging technology. The system of Group of Ministers has been dispensed with and emphasis is on swift decision-making. While introducing stricter and sterner measures to deal with corruption; effort is being made to ensure that sufficient safeguards are in place to protect bona fide decisions taken in public interest and to inspire confidence in the civil service. 22.     My Government is firmly committed to engage people in the process of Governance and policy-making.My Gov Online Platform, a path breaking initiative, has been launched. This platform has ensured public participation in decision-making and ideation of various national flagship programmes like Swachh Bharat Mission, Namami Gange, Pradhan Mantri Jan Dhan Yojana and NITI Aayog. 23.     My Government has envisioned an ambitious umbrella programme, Digital India, to prepare India for technology based transformation and citizen centric transparent governance with service orientation. Aadhar based attendance system and Jeevan Praman, Aadhar based Digital Life Certificate Portal, have shown that innovative use of technology can make enormous difference. Measures are being taken to accomplish digital inclusion in rural areas, small towns, north-east and other remote areas, opening up immense job opportunities in these areas. Promoting manufacturing of electronic goods has been an area of thrust. 24.     My Government is pledged to decentralization of power and as an important step in this direction, the Planning Commission has been replaced with a new body- The National Institution for Transforming India -NITI Aayog. The underlying spirit of NITI Aayog is to foster the spirit of cooperative federalism so that Union and State Governments come on a platform to forge a common national agenda for development, with thrust on empowering the impoverished. Honourable Members, 25.     As a result of my Government’s sustained efforts and series of policy initiatives, our economy is again on the high growth trajectory. According to the latest estimates, our GDP is growing at 7.4%, which makes India the fastest growing large economy in the world.  Inflation and Food inflation, in particular, are at a record low due to a number of decisive measures taken by the Government.  Fixed capital formation, which faced a near stagnation in the last few years, has increased. Capital Markets are upbeat. Our external sector is now far more resilient, particularly with a moderate current account deficit and a broadly stable rupee. Our foreign exchange reserves have been substantially augmented. 26.     While my Government has intensified efforts to bring greater efficiency and equity into the tax system, prudence in expenditure management is also high on the agenda of my Government. A Constitutional (Amendment) Bill has been introduced to bring in Goods and Services Tax that will simplify the indirect tax regime, broaden the tax base and result in better tax compliance. Honourable Members, 27.     My Government is committed to taking all possible measures to stop generation of black money, both domestically and internationally. These measures include putting in place robust legislative and administrative frameworks, systems and process with due focus on capacity building, integration of information through technology, and fast tracking prosecution. 28.     Financial Sector institutional restructuring is a priority area. My Government will expedite implementation of the recommendations of the Financial Sector Legislative Reforms Commission. SEBI’s new Foreign Portfolio Investment Regulations have established a unified, simple regulatory framework. The Insurance Laws (Amendment) Ordinance, 2014 was promulgated enhancing the foreign equity cap from 26% to 49% while safeguarding Indian ownership and control. This will enhance capital availability and ensure better access to insurance services, especially in rural areas and for economically weaker sections. Small Banks and Payments Banks are being permitted to expand the reach of the banking system. Honourable Members, 29.     My Government has taken major initiatives for improving ‘Ease of Doing Business’ through simplification and rationalization of existing rules and procedures. Leveraging IT and use of modern technologies is a key strategy. Single window in a Hub - Spoke model is being made a reality. Applying for Industrial License and Industrial Entrepreneur Memorandum can now be done online on 24x7 basis on the eBiz website. A number of entry and exit regulations have been eased out. 30.     My Government has launched the “Make in India” programme which aims to create a wholesome eco-system to transform India into a manufacturing hub. FDI in Railways has been opened up selectively to bring in much needed capital, state-of-the-art technology and global best practices. FDI in Defence has been increased to 49% subject to certain conditions. FDI norms in Construction & Development sector have been relaxed. Continuous evaluation of Inverted duties is being undertaken to make Indian industries competitive. Stress is being laid on research and innovation. While focusing our attention on manufacturing for creating more jobs, my Government will continue to work on our formidable strength in the service sector. Honourable Members, 31.     My Government is committed to realizing the true potential of entrepreneurs of India by nurturing the MSME sector. 21 MSME clusters are being supported by providing soft skills and common facilities through 965 interventions. Khadi and village industries and traditional industries clusters are initiated in border, hill and poverty-stricken areas of the country. Focus is on technology upgradation, better financial access and market linkages to MSME units. 32.     Textiles sector is the second largest employer after agriculture, providing direct employment to over 4.5 crore people. The sector also contributes one seventh of industrial production and brings more than one fourth of country’s foreign exchange inflows. The growth and all round development of this sector has a direct bearing on the improvement of our economy, particularly the poor artisans. Recent initiatives like setting up of trade facilitation centres in different parts of India, bringing textile marketing on-line, incentives for technical textiles, promotion of Pashmina, special focus on increasing the coverage in North-Eastern part of the country would lead to advancement of this sector. Honourable Members, 33.     Cities are the engines of economic growth. My Government is committed to building modern amenities and infrastructure in our urban areas. The National Urban Development Mission is being finalized, particularly focusing on water and solid waste management infrastructure. After extensive stakeholder consultations, the Smart City programme is close to finalization. These two programmes are interlinked and will prepare our nation for an increasingly urban future. Honourable Members, 34.      Robust infrastructure is critical for accelerating economic development and reviving economic growth. Indian Railways are the arteries of our economy. My Government is committed to reform and infuse new vitality into this sector through better services, improved passenger-safety, and increased movement of freight. Two Dedicated Freight Corridors (DFCs), namely, Eastern DFC and Western DFC are likely to be commissioned by 2019. Action for conducting feasibility studies for the Diamond Quadrilateral project of High Speed Trains connecting Delhi, Mumbai, Chennai and Kolkata has been taken up. Metro Rail projects have been sanctioned for Ahmadabad and Nagpur. 35.      Several policy initiatives to revive the Highway sector have been taken. “National Highways Infrastructure Development Corporation Limited” has been set up for creation of infrastructure in the North Eastern States and border regions of the country. New standards have been set to improve quality of roads, both on highways and in rural areas and electronic tolling has been introduced for hassle-free traffic on selected highways. e-Rickshaw and e-Cart have been introduced as a separate category under the Motor Vehicles Act 1988, enhancing convenience of passengers and generating thousands of jobs. 36.      My Government has taken proactive steps to promote shipping industry. These include giving life-time licenses to Indian ships, allowing Indian ships to flag out of country’s waters freely, reduction of excise duty on bunker fuel and reduction of customs duty on the steel scrap of ship breaking. Government has also formulated“Sagar Mala” Project to promote Port-led development of the coastal regions and communities. As part of“Make in India” initiative, ship designing capabilities, ship-building and ship-repair activities will be strengthened. An environment is being created to increase the Indian shipping tonnage and to reduce the transaction time on ports. An institutional arrangement for comprehensive development of National Waterways for transportation has been envisaged through the ‘Jal Marg Vikas’ Project. Honourable Members, 37.      Power sector has made commendable progress achieving 76% capacity addition by January, 2015 against the 2014-15 target of 17,830 MW. In order to provide 24x7 quality power in rural and urban areas, the Deendayal Upadhyaya Gram Jyoti Yojana with an outlay of more than ` 43,000 crore and the Integrated Power Development Scheme with an outlay of more than ` 32,600 crore, have been launched. Special attention is being paid to the un-electrified villages in remote areas. My Government has started major project for improving transmission and distribution system in the North Eastern States. We will focus on developing and strengthening the National Grid by developing high capacity power corridors. To deepen the reforms in the Electricity sector, the Electricity (Amendment) Bill 2014 has been introduced. The ambitious National Smart Grid Mission and Energy Saving Schemes have been started. 38.     My Government lays enormous emphasis on clean energy. The share of renewable energy in electricity generation is being significantly enhanced from 6% to 15% of the energy mix in the next 7 years. The scheme for setting up 25 mega Solar Parks has been approved. The implementation of the Green Energy Corridor Schemehas been accelerated. Setting up of solar generating capacities along the international borders will be a key area of attention. My Government has made successful efforts in attracting the Global investors in this sector. Similar attention is being paid to bio-mass and hydro-energy. Government will further expand India’s nuclear power capacity with the highest global standards of safety and technological standards. Honourable Members, 39.     The petroleum sector has seen major reforms. Diesel prices have been deregulated and are now market driven. The price of petrol has also been decreased by more than  ` 17 per litre. The Government has put to rest all speculation regarding the long pending issue of revising gas prices and put in place a prudent policy in national interest. The ethanol policy has been revised to promote use of ethanol in petrol and help sugarcane farmers. 40.     My Government is committed to optimum utilization and transparency in allocation of natural resources. The process for auction of coal blocks has been started in a manner which will reduce the power costs in the country, provide adequate fuel to increase power generation, enhance production of steel, cement, aluminium and other essential materials. This will also provide huge resources from allotment of mines to the mineral and coal bearing states particularly in eastern areas for accelerated development of the region. The swift and timely action taken by my government in this regard prevented the closure of mines which otherwise would have rendered thousands jobless. In coming years, my Government would make focussed efforts to expand exploration capacity and to increase domestic coal production to 1000 MTPA. Honourable Members, 41.       Water is the lifeline of human civilization. River Ganga has a very special place in the collective consciousness of our country. “Namami Gange”, an Integrated Ganga Conservation Mission has been set-up with budgetary allocation of more than ` 2000 crore. The Government is fully committed to the implementation of Interlinking of Rivers Project with due consultation process. 42.     My Government took several proactive steps for protecting wildlife and for promoting cleaner environment. Stringent emission norms for cement industry were prescribed. Real-time online monitoring of industrial units in 17 critically polluting sectors was started and National Air Quality Index launched. Compensatory Afforestation Fund Management and Planning Authority (CAMPA) would be strengthened and adequate funds released to States/UTs for aggressive afforestation and wildlife protection. Government has taken significant steps to streamline clearance processes in environmental sector by bringing in transparency and by empowering State Governments. Online application processes for Environment, Forest and CRZ Clearances were introduced from July, 2014. Honourable Members, 43.     To harness the enormous potential in the tourism sector, a new Tourism policy for growth and sustainability of tourism is on the anvil. “Tourist Visa on Arrival” enabled with Electronic Travel Authorization, has been expanded to 44 countries. Infrastructure and amenities are being upgraded in major tourist and pilgrimage destinations. River Ghats in several pilgrim destinations are being renovated. A special initiative for protecting and preserving the sanctity of our tourist destinations and monuments of national heritage has been launched. Dedicated tourist trains covering Jyotirling Circuits, Sukhmangal Circuit and Dakshin Dham Circuit have been started. A new scheme has been launched for development of tourist circuits called “Swadesh Darshan”,which includes Krishna Circuit, Himalayan Circuit, Coastal Circuit, Buddha Circuit, and North East Circuits. A Statue of Unity is being constructed to commemorate the memory of Sardar Patel. Honourable Members, 44.     My Government is committed to restore and rejuvenate the soul of cities that are home to rich cultural heritage of our country. A scheme ‘Heritage Development and Augmentation Yojana’ (HRIDAY) covering 12 cities in the first phase has been launched with the predominant objective of preserving the tangible and intangible cultural assets of these cities. A special scheme called “PRASAD” - Pilgrimage Rejuvenation and Spirituality Augmentation Drive” - has been announced for rejuvenation of 12 pilgrim centres in convergence with “HRIDAY”. Honourable Members, 45.     Terrorism and Left Wing Extremism pose a grave challenge to the internal security of our nation. My Government is firmly committed to deal with these challenges in cohesive collaboration with the affected people and Governments of the affected States in a holistic manner. 46.     Jammu & Kashmir occupies a place of enormous importance in the agenda of my Government. Government has endeavoured to create a conducive and enabling environment in the state of Jammu and Kashmir, especially for the various displaced segments of its population. This includes facilitating the rehabilitation of over 60,000 Kashmiri Pandits families.  The Government has taken effective steps in this regard. These include, inter alia, providing Government jobs, economic opportunities and security. During the recent unprecedented flood situation in the State, my Government made special efforts in collaboration with the State Government to minimize the impact of disaster and augment rehabilitation measures. The nation is deeply indebted to our armed forces and paramilitary forces for the outstanding service rendered during the relief operations to flood affected people in Jammu & Kashmir. 47.     A high state of Disaster preparedness is the key to contain loss of life and damage to the property due to any natural disaster. This has been amply demonstrated during the response to the very severe cyclone ‘HUDHUD’, by the State Governments of Andhra Pradesh and Odisha together with the Central Government. 48.     My Government is committed to implement the idea of SMART Police (Smart but Sensitive, Modern and Mobile, Alert and Accountable, Reliable and Responsive, Tech-savvy and well Trained) to provide efficient, courteous and effective citizen services and meet the operational needs of the police personnel including women police personnel. 49.     Government is accelerating the modernization of our Armed Forces, with a strong emphasis on “Make in India” in defence acquisition plans. Several initiatives have been taken to expand domestic defence industry, including liberalization of FDI for the defence sector; a new Defence Exports Strategy; a liberalized process for issuing clearances for defence exports; and a Technology Development Fund. To encourage domestic manufacturing of defence equipments and decrease import dependency, the list of Defence items which require industrial licensing has been pruned. Honourable Members, 50.     Our Space journey continues to make impressive progress. On 24 September 2014, Mangalyaan was successfully placed in the Mars Orbit, making India the first country to do so in the first attempt. We successfully launched the first experimental flight of GSLV Mark-Ill on 19 December 2014, which will enable us to launch heavier satellites in the near future. My Government is committed to use space technology and its applications in governance, social and economic development and resource management. My Government has also decided to launch a satellite for the use of SAARC countries to foster greater partnership and development of South Asian Region. 51.       My Government is committed to deeper penetration of electronic media in remote and distant areas. Auctions will be conducted for 135 vacant channels in 69 existing cities of FM Phase-II as part of first batch of FM Phase-Ill. It will also facilitate migration of FM Phase-II to FM Phase-Ill. This will take private FM radio to cities having population of more than one lakh and border towns of Jammu & Kashmir, North-eastern region and island territories in a phased manner. 52.     Our developmental challenges will continue to shape the strategic priorities in science, technology and innovation. Steps are being taken to channelize more resources for research and development in India; build world class research centres; nurture young talent and, promote international collaboration, including in the world’s largest optical ‘Thirty Meter Telescope’. Honourable Members, 53.     Recognizing that our destiny is linked with our neighbourhood, my Government has reinvigorated our relations with our neighbours and is promoting greater cooperation and integration in South Asia. At the same time, we speak clearly about our interests and are fully prepared to defend our borders and secure our people. 54.     With the visit of Chinese President Xi Jinping, we have significantly expanded our relations with our largest neighbour, China, based on mutual respect and sensitivity to each other’s concerns and interests. We have restored confidence and momentum in our time-tested strategic partnership with Russia with President Vladimir Putin’s visit. The historic visit of U.S. President Barack Obama as the Chief Guest of the Republic Day has elevated our relations with the United States to a new level. In the coming months, we intend to further deepen our cooperation with Europe. With Japan, a deeper political, economic and security relationship is at the forefront of a more active and purposeful Act-East-Policy, which is anchored in our relations with Southeast Asia and now extends to Australia and the Pacific Islands. We are also committed to deeper engagement with West Asia, Central Asia, Africa and South Americas. 55.     My Government will continue to work with others to reform multilateral institutions, including the United Nations, and seek India’s rightful place in these institutions. We will also participate actively in regional and international groupings. Honourable Members, 56.     My Government’s efforts have enhanced global recognition for India’s rich cultural heritage and traditions. On 11th December 2014, the United Nations, with a record co-sponsorship of 177 out of 193 member countries, took the historic decision to declare 21 June as ‘International Yoga Day’, exactly within 75 days of Prime Minister’s call at the United Nations General Assembly. 57.     My Government has made an unprecedented effort to reach out to the Indian community abroad, which today not only feels more connected to India, but has responded enthusiastically to the call to participate in India’s transformation, inspired by Mahatma Gandhi, whose 100th anniversary of return to India was commemorated at this year’s Pravasi Bharatiya Diwas. Our decisions on PIO and OCI card-holders have been widely welcomed by the Indian community abroad. Honourable Members, 58.     Our Parliament is the sanctum sanctorum of Democracy. The people of India, particularly the poorest of the poor in remotest areas, have reposed unflinching faith in this institution for fulfillment of their hopes and expectations. My Government will constantly endeavour for smooth conduct of legislative business and enactment of progressive laws in the Parliament which reflects the will and aspirations of the people. I urge all Members of the Parliament to discharge their solemn responsibility in a spirit of cooperation and mutual accommodation. By channelizing the patriotic energies of every citizen, we all collectively must work towards building a strong and modern India. Ek Bharat Shresth Bharat.