Arthpedia Flashcards
AYUSH
AYUSH=Ayurveda+Unani+Siddha+Homeopathy+(Naturopathy, Sowa Rigpa/Amchi)
> Combination of ALTERNATIVE SYSTEM OF MEDICINE, earlier Indian System of Medicine.
> Includes AYURVEDA, YOGA, NATUROPATHY, UNANI, SIDDHA, HOMEOPATHY
> Objective: to PROMOTE MEDICAL PLURALISM and to introduce strategies for MAINSTREAMING the INDIGENOUS SYSTEMS of medicine.
> Union Govt > Department of AYUSH under Ministry of Health; Family Welfare.
> Most of these medical practices originated in India and outside, but got adopted in India in the course of time.
> Ayurveda is more prevalent in the states of Kerala, Maharashtra, Himachal Pradesh, Gujarat, Karnataka, Madhya Pradesh, Rajasthan, Uttar Pradesh, Delhi, Haryana, Punjab, Uttarkhand, Goa and Orissa.
> The practice of Unani System could be seen in some parts of Andhra Pradesh, Karnataka, Jammu &Kashmir, Bihar, Maharashtra, Madhya Pradesh, Uttar Pradesh, Delhi and Rajasthan.
> Homoeopathy is widely practiced in Uttar Pradesh, Kerala, West Bengal, Orissa, Andhra Pradesh, Maharashtra, Punjab, Tamil Nadu, Bihar, Gujarat and the North Eastern States and the Siddha system is practiced in the areas of Tamil Nadu, Pondicherry and Kerala.
> In September 2009 SOWA RIGPA system of medicine was also recognized as a traditional system of medicine > Sowa Rigpa, commonly known as ‘AMCHI’ is one of the oldest surviving system of medicine in the world, POPULAR IN HIMALAYAN REGION of India > practiced in Sikkim, Arunachal Pradesh, Darjeeling (West Bengal), Lahoul and Spiti (Himachal Pradesh) and Ladakh region of Jammu & Kashmir.
> Most of the FOREIGN COUNTRIES including USA, Australia, European countries etc. HAVE NOT RECOGNISED Ayurveda, Siddha and Unani, as systems of medicine, therefore practice of these systems and marketing of their products as medicines faces problems.
> The medicines of these systems are generally manufactured in India as per the standards and Good Manufacturing Practices in accordance with the Drugs and Cosmetics Act, 1940 and Rules thereunder but are often exported by the industry to such countries as food supplements or dietary supplements because of non-fulfillment of the regulatory requirements of the importing countries.
However, the efficacy and safety of drugs and therapies for various remedies is scientifically established through clinical validation carried out by the 5 Research Councils under the Ministry of AYUSH namely Central Council for Research in Ayurvedic Sciences (CCRAS), Central Council for Research in Yoga & Naturopathy (CCRYN), Central Council for Research in Unani Medicine (CCRUM), Central Council for Research in Siddha (CCRS) and Central Council for Research in Homoeopathy (CCRH).
> The Department of AYUSH, Ministry of Health and Family Welfare has been accorded the status of a Ministry with effect from 09.11.2014 by the Cabinet Secretariat.
> National AYUSH Mission (NAM) launched on 15 September 2014 as part of 12th Plan envisages better access to AYUSH services through increase in number of AYUSH Hospitals and Dispensaries, ensuring availability of AYUSH drugs and trained manpower.
Base Effect
Base Effect=IMPACT OF SUBSEQUENT RISE/FALL OF PRICE
> The base effect refers to the IMPACT OF THE RISE/fall IN THE PRICE LEVEL (i.e. last year’s inflation) IN THE PREVIOUS YEAR OVER THE CORRESPONDING RISE/fall IN PRICE LEVELS IN THE CURRENT YEAR (i.e., current inflation): if the price index had risen at a high rate in the corresponding period of the previous year leading to a high inflation rate, some of the potential rise is already factored in, therefore a similar absolute increase in the Price index in the current year will lead to a relatively lower inflation rates. On the other hand, if the inflation rate was too low in the corresponding period of the previous year, even a relatively smaller rise in the Price Index will arithmetically give a high rate of current inflation.
For example:
Price Index Inflation
2007 2008 2009 2010 2008 2009 2010
Jan 100 120 140 160 20 16.67 14.29
The index has increased by 20 points in all the three years – 2008, 2009, 2010. However, the inflation rate (calculated on year-on-year basis) tends to decline over the three years from 20% in 2008 to 14.29% in 2010. This is because the absolute increase of 20 points in the price index in each year increases the base year price index by an equivalent amount, while the absolute increase in price index remains the same. Remember, year-on-year inflation is calculated as:
Bid Rigging
Bid Rigging=COLLUDING BIDDERS
> widely known term across the world > Bidding > procurement of goods or services on the MOST FAVOURABLE TERMS & CONDITIONS.
Invitation of bids is resorted to both by Government (and Government entities) and private bodies (companies, corporations, etc.).
But the OBJECTIVE OF SECURING MOST FAVOURABLE PRICES/SERVICES/CONDITIONS MAY BE NEGATED IF THE PROSPECTIVE BIDDERS COLLUDE OR ACT IN CONCERT to influence the bidding process > Such collusive bidding is called “bid rigging” = inherently anticompetitive.
> If bid rigging takes place in Government tenders, it is likely to have severe adverse effects on its purchases and on cost effectiveness of public spending leading to inefficient use of public resources.
> It is therefore important that the procurement process is highly competitive and not affected by practices such as collusion, bid rigging, fraud and corruption.
> All over the world, bid rigging or collusive bidding is treated with severity in the law as reflected by the presumptive approach.
> Collusive bidding or bid rigging may occur in various ways by which firms coordinate their bids on procurement or project contracts.
> Origin of bid rigging is as old as system of procurement. However, an apt codification on the same may be the SHERMAN ACT, 1890 of the United States, which is considered the first codified law to look into agreements leading to bid rigging.
> Governments are most often the target of bid rigging. Bid rigging is one of the most widely prosecuted forms of collusion. Bid rigging may take various forms such as bid suppression, complimentary bidding, bid rotation, and sub contracting etc.
> In India, the COMPETITION ACT, 2002 specifically PROHIBITS COLLUSIVE BIDDING (direct or indirect) under Section 3 (3) d. It is one of the four horizontal agreements that shall to be presumed to have appreciable adverse effect on competition (AAEC). The explanation to sub-section (3) of Section 3, of the Competition Act, 2002 defines “bid rigging” as “any agreement, between enterprises or persons referred to in sub-section (3) engaged in identical or similar production or trading of goods or provision of services, which has the effect of eliminating or reducing competition for bids or adversely affecting or manipulating the process for bidding.”
> Reducing collusion in public procurement requires strict enforcement of competition laws and the education of public procurement agencies at all levels of government to help them design efficient procurement processes and detect collusion.
References
Competition Commission of India, Advocacy Booklet Series 4, Provision relating to Bid Rigging, March 2011
Charged Expenditure
Charged Expenditure=GOVT EXPENDITURE NOT REQUIRING VOTE/PERMISSION TO BE CHARGED FROM CONSOLIDATED FUND
> Indian Govt cannot spend from the Consolidated Fund unless the expenditure is voted in the lower house of Parliament or State Assemblies
> However according to Article 112 (3) and Article 202 (3) of the Constitution of India, the following expenditure does not require a vote and is charged to the Consolidated Fund. It includes SALARY, ALLOWANCE & PENSION FOR THE PRESIDENT, GOVERNORS, SPEAKER AND DEPUTY SPEAKER OF THE HOUSE OF PEOPLE, CGI , and JUDGES OF SUPREME COURTS and HIGH COURTS. They also include interest and other debt related charges of the Government and any sums required to satisfy any court judgment pertaining to the Government.
Consolidated Fund of India
Consolidated Fund of India=ALL REVENUES RECEIVED BY THE UNION GOVT
This term derives its origin from the Constitution of India. Under Article 266 (1) of the Constitution of India, all revenues ( example tax revenue from personal income tax, corporate income tax, customs and excise duties as well as non-tax revenue such as licence fees, dividends and profits from public sector undertakings etc. ) received by the Union government as well as all loans raised by issue of treasury bills, internal and external loans and all moneys received by the Union Government in repayment of loans shall form a consolidated fund entitled the ‘Consolidated Fund of India’ for the Union Government.
Similarly, under Article 266 (1) of the Constitution of India, a Consolidated Fund Of State ( a separate fund for each state) has been established where all revenues ( both tax revenues such as Sales tax/VAT, stamp duty etc..and non-tax revenues such as user charges levied by State governments ) received by the State government as well as all loans raised by issue of treasury bills, internal and external loans and all moneys received by the State Government in repayment of loans shall form part of the fund.
The Comptroller and Auditor General of India audits these Funds and reports to the Union/State legislatures when proper accounting procedures have not been followed.
Debt Consolidation and Relief Facility (DCRF)
Debt Consolidation and Relief Facility (DCRF)
> The 12th FINANCE COMMISSION (TFC) had recommended a Debt Consolidation and Relief Facility (DCRF) during its award period (01.04.2005 to 31.03.2010) to States.
> This facility provided for, 1. Consolidation of central loans from Ministry of Finance contracted till 31.3.2004 and outstanding as on 31.3.2005 for a fresh tenure of twenty years at an interest rate of 7.5% per annum and 2. Debt waiver to states based on their fiscal performance.
> The facility is subject to the condition that states enact their Fiscal Responsibility and Budgetary Management (FRBM) Acts as recommended by the Commission. Under the scheme, twenty-six states out of twenty eight states (except Sikkim and West Bengal), which had enacted their Fiscal Responsibility and Budget Management Acts, had availed of the facility of consolidation of their loans. Those states which had improved their fiscal performance could also get their eligible debt waived.
> The 13th FINANCE COMMISSION (FC-XIII) has extended the DCRF, limited to consolidation of their loans only, to the states of Sikkim and West Bengal during 2010-15, provided these states put in place their FRBM Acts as stipulated by FC-XIII. Sikkim and West Bengal have now enacted their Fiscal Responsibility Legislations.
Guillotine
Guillotine=TIMELY PASSAGE OF THE FINANCE BILL & CONCLUDING DISCUSSIONS/DEBATES ON THE BUDGET
Each year, after the Budget is presented in the floor of the Lok Sabha by the Finance Minister, the House has the opportunity to discuss the financial proposals contained in it. The process of deliberations on the Budget sets off with a general discussion followed by the Vote on Account, debating and voting on the Demands for Grants and finally, consideration and passing of the Appropriation and Finance Bills.
Guillotine refers to the exercise vide which the Speaker of the House, on the very last day of the period allotted for discussions on the Demands for Grants, puts to vote all outstanding Demands for Grants at a time specified in advance. The aim of the exercise is to conclude discussions on financial proposals within the time specified.
All outstanding Demands for Grants must be voted by the House without discussions once the guillotine is invoked.
Once the pre-specified time for invoking the guillotine is reached, the member who is in possession of the house at that point in time, is requested by the Speaker to resume his or her seat following which Demands for Grants under discussion are immediately put to vote. Thereafter, all outstanding Demands are guillotined.
Invoking the guillotine ensures timely passage of the Finance Bill and the conclusion of debates and discussions on the year’s Budget.
Household Industry Workers
Household Industry Workers
> Household Industry is defined as an industry conducted by one or more members of the household at home or within the village in rural areas and only within the precincts of the house where the household lives in urban areas.
> The larger proportion of workers in the household industry consists of members of the household. The industry is not run on the scale of a registered factory which would qualify or has to be registered under the Indian Factories Act.
> Household Industry relates to production, processing, servicing, repairing or making and selling (but not merely selling) of goods. It does not include professions such as a Pleader, Doctor, Musician, Dancer, Astrologer, Dhobi, Barber, etc., or merely trade or business, even if such professions trade or services are run at home by members of the household.
Inclusive Growth
Inclusive Growth
> The agenda for inclusive growth was envisaged in the 11th Plan document which intended to achieve not only faster growth but a growth process which ensures broad-based improvement in the quality of life of the people, especially the poor, SCs/STs, other backward castes (OBCs), minorities and women and which seeks to provide equality of opportunity to all.
> Bringing these excluded sections of the society into the mainstream of the society so that they are able to reap the benefits of faster economic growth is the kind of ‘inclusion’ which is being envisioned in the concept of inclusive growth.
> Inclusive growth means economic growth that creates employment opportunities and helps in reducing poverty.
> It means having access to essential services in health and education by the poor.
> It includes providing equality of opportunity, empowering people through education and skill development.
> It also encompasses a growth process that is environment friendly growth, aims for good governance and a helps in creation of a gender sensitive society.
> Special efforts to increase employment opportunities are essential as it is a necessary condition for bringing about an improvement in the standard of living of the people.
> Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), one of the largest social safety network in India, has improved the standard of living of people and has been able to check migration to a great extent.
> Apart from this, the Government has launched various flagship programmes like Sarva Siksha Abhiyan (SSA), National Rural Health Mission (NRHM), Bharat Nirman etc. to bring about improvement in the area of education, health and infrastructure thereby making growth more inclusive.
> The growth story of Indian economy has been remarkable in the recent years. During 2005-06 to 2007-08 it has achieved an average growth rate of 9.47%, though declined somewhat afterwards in the wake of global financial crisis. Even then it was able to maintain a decent average growth rate of 7.76% for the period 2008-09 to 2010-11. Further, it is expected that the growth is likely to average 8.2% for the Eleventh Five Year Period (2007-12) which is less than the targeted 9% but above 7.7% achieved during the Tenth Five Year plan.
> India has comfortable level of investment and savings rate to steer such a growth rate.
But in terms of Human Development Index, India is lagging behind China, Sri Lanka and many other African and Latin American countries.
> India has a rank of 119 in the HDI, UNDP (Human Development Report 2010). Similarly in terms of other indicators like poverty, unemployment and regional disparities India has lot more to do. The HDR 2010, has also come up with a new parameter to measure poverty called Multidimensional Poverty Index (MPI) replacing Human Poverty Index (HPI). India’s performance is dismal in this regard poorer than China, Sri Lanka, Kenya and Indonesia as about 41.6 per cent of India’s population (in terms of $ 1.25 a day) lives below the poverty line.
> Thus, there is a need to broadbase the economic growth, increase participation of people and share the benefits of the growth process in order to make it more inclusive.
> Reducing rural-urban gap, gender discrimination and achieving higher level of human development will also bring about inclusiveness.
> Inclusive growth can hardly ignore the environmental concerns. India’s effort in this regard is commendable as India is one of the lowest Greenhouse Gas (GHG) emitters in the world and still India has announced that, by proactive policies, it will reduce the emissions intensity of its GDP by 20-25 percent over the 2005 levels by the year 2020.
Internal and Extra Budgetary Resources (IEBR)
Internal and Extra Budgetary Resources (IEBR)=RESOURCES RAISED BY PSUs
> IEBR is an important part of the Central plan of the Government of India and constitutes the resources raised by the PSUs through profits, loans and equity.
> The global economic slowdown has affected the profits of the PSUs and has hampered their resource generation capacities.
> In 2009-10 the Total Central Plan Outlay was Rs.406, 912 crores. It consisted of the Gross Budget Support (GBS) for the Central Plan to the tune of 218,901 crores (53.8%) and IEBR of Central Public Sector Units (CPSUs) to the tune of 188,011 crores (46.2%).
> The share of government support for the Central Plan Outlay for 2011-12 continues to be high at 56.6% while the increase in IEBR has been marginal due to the global economic slowdown.
> The budgetary support to the Central Plans from 1985-86 to 2011-12 are given in the following link: http://www.planningcommission.nic.in/data/datatable/1705/final_11.pdf
Liquidity Adjustment Facility (LAF)
Liquidity Adjustment Facility (LAF)=ALLOWS BANKS TO BORROW MONEY THROUGH REPURCHASE AGREEMENTS
> Liquidity adjustment facility (LAF) is a MONETARY POLICY TOOL which allows banks to borrow money through repurchase agreements.
> Used to aid banks in adjusting the day to day mismatches in liquidity.
> Consists of repo and reverse repo operations.
> Repo or repurchase option is a collaterised lending i.e. banks borrow money from Reserve bank of India to meet short term needs by selling securities to RBI with an agreement to repurchase the same at predetermined rate and date. The rate charged by RBI for this transaction is called the repo rate. Repo operations therefore inject liquidity into the system.
> Reverse repo operation is when RBI borrows money from banks by lending securities. The interest rate paid by RBI is in this case is called the reverse repo rate. Reverse repo operation therefore absorbs the liquidity in the system.
> The collateral used for repo and reverse repo operations comprise of Government of India securities. Oil bonds have been also suggested to be included as collateral for Liquidity adjustment facility.
> Liquidity adjustment facility has emerged as the principal operating instrument for modulating short term liquidity in the economy.
> Repo rate has become the key policy rate which signals the monetary policy stance of the economy.
> The origin of repo rates, one of the component of liquidity adjustment facility, can be traced to as early as 1917 in U.S financial market when war time taxes made other sources of lending unattractive.
> The introduction of Liquidity adjustment facility in India was on the basis of the recommendations of NARSIMHAM COMMITTEE on banking sector reforms. In April 1999, an interim LAF was introduced to provide a ceiling and the fixed rate repos were continued to provide a floor for money market rates.
> As per the policy measures announced in 2000, the Liquidity Adjustment Facility was introduced with the first stage starting from June 2000 onwards > Subsequent revisions were made in 2001 and 2004 > When the scheme was introduced, repo auctions were described for operations which absorbed liquidity from the system and reverse repo actions for operations which injected liquidity into the system. However in international nomenclature, repo and reverse repo implied the reverse. Hence in October 2004 when revised scheme of LAF was announced, the decision to follow the international usage of terms was adopted.
> Repo and reverse repo rates were announced separately till the monetary policy statement in 3.5.2011. In this monetary policy statement, it has been decided that the reverse repo rate would not be announced separately but will be linked to repo rate. The reverse repo rate will be 100 basis points below repo rate. The liquidity adjustment facility corridor, that is the excess of repo rate over reverse repo, has varied between 100 to 300 basis points. The period between April 2001 to March 2004 and June 2008 to early November 2008 saw a broader corridor ranging from 150-250 and 200-300 basis points respectively. During March 2004 to June 2008 the corridor was narrow with the rates ranging from 100-175 basis points. A narrow LAF corridor is reflected from November 2008 onwards. At present the width of the corridor is 100 basis points. This corridor is used to contain any volatility in short term interest rates.
Models of Microfinance in India
Models of Microfinance in India:
The four most important Micro Finance models prevalent in India are:
Model I - individuals or group borrowers are financed directly by banks without the intervention/facilitation of any Non-Government Organisation (NGO).
Model II - borrowers are financed directly with the facilitation extended by formal or informal agencies like Government, Commercial Banks and Micro-Finance Institutions (MFIs) like NGOs, Non Bank Financial Intermediaries and Co-operative Societies;
Model III - financing takes place through NGOs and MFIs as facilitators and financing agencies;
Model IV - is the Grameen Bank Model, similar to the model followed in Bangladesh.
In India, Model II of MF constitutes three-fourths of total micro-financing where activity/joint liability/Self-Help Groups are formed and nurtured by facilitating agencies and are linked directly with banks for the purpose of receiving credit.
Non-Resident Indian Deposits (NRI Deposits)
Non-Resident Indian Deposits (NRI Deposits)
> (FEMR)Foreign Exchange Management (Deposit) Regulations, 2000 permits Non-Resident Indians (NRIs) to have deposit accounts with authorized dealers and with banks authorized by the Reserve Bank of India (RBI).
These accounts include:
1. Foreign Currency Non-Resident (Bank) account [FCNR(B) account]
2. Non-Resident External account (NRE account)
3. Non-Resident Ordinary Rupee account (NRO account)
> FCNR(B) accounts can be opened by NRIs and Overseas Corporate Bodies (OCBs) with an authorized dealer > The accounts can be opened in the form of term deposits. Deposits of funds are allowed in Pound Sterling, US Dollar, Japanese Yen and Euro > Rate of interest applicable to these accounts are in accordance with the directives issued by RBI from time to time.
> NRE accounts can be opened by NRIs and OCBs with authorized dealers and with banks authorized by RBI. These can be in the form of savings, current, recurring or fixed deposit accounts. Deposits are allowed in any permitted currency. Rate of interest applicable to these accounts are in accordance with the directives issued by RBI from time to time.
> NRO accounts can be opened by any person resident outside India with an authorized dealer or an authorized bank for collecting their funds from local bonafide transactions in Indian Rupees. When a resident becomes an NRI, his existing Rupee accounts are designated as NRO. These accounts can be in the form of current, savings, recurring or fixed deposit accounts.
*There were two more NRI deposit accounts in operation, viz. Non-Resident (Non-Repatriable) Rupee Deposit Account and Non-Resident (Special) Rupee Account. An amendment to Foreign Exchange Management (Deposit) Regulations, in 2002, discontinued the acceptance of deposits in these two accounts from 1st April 2002 onwards.
**Repatriation of funds in FCNR(B) and NRE accounts is permitted. Hence, deposits in these accounts are included in India’s external debt outstanding.
***While the principal of NRO deposits is non-repatriable, current income and interest earning is repatriable. Account-holders of NRO accounts are permitted to annually remit an amount up to US$ 1 million out of the balances held in their accounts. Therefore, deposits in NRO accounts too are included in India’s external debt.
Appropriation
Appropriation
> According to Article 114 of the Indian constitution, no money can be withdrawn from the Consolidated Fund of India to meet specified expenditure except under an appropriation made by Law. Similarly,
> State (sub-national) Governments can also draw from their Consolidated Funds only after an appropriation act is passed.
> Every year, after budgetary estimates are approved, an Appropriation Bill is passed by the Parliament/state legislature and then it is presented to the President/Governor. After the assent by the President/governor to the bill, it becomes an Act. However, if during the course of the financial year, the funds so appropriated are found to be insufficient, the Constitution provides for seeking approval from the Parliament or State Legislature for supplementary grants.
> Appropriation Accounts present the total amount of funds (original and supplementary) authorised by the Parliament/State legislature in the budget vis-a-vis the actual expenditure incurred against each head of expenditure.
> The Office of the Comptroller and Auditor General of India reports to the Union and State Legislatures any discrepancies that occur between the amounts appropriated for a particular head of expenditure and what was actually spent at the end of the financial year.
> These reports provide an indication of unrealistic budget estimates made by various departments. Any expenditure in excess of what was approved requires regularization by the Parliament/State Legislature.
> Some expenditure of Government (e.g. public debt repayments, expenditure incurred on the Judiciary etc.) is not voted by the Legislature and such expenditure is ‘Charged’ on Consolidated Fund under Article 112 (3) of the Constitution and is called CHARGED APPROPRIATION > All other expenditure is required under Article 113 (2) of the Constitution to be voted by the Legislature and is called VOTED GRANT.
Primary, Secondary and Tertiary HealthCare
Primary, Secondary and Tertiary HealthCare
- Primary Healthcare= 1st level of contact between individuals and families with the health system.
> According to *ALMA ATTA DECLARATION of 1978, Primary Health care was to serve the community for their immediate health requirements/awareness, essential health facilities, and treatment of common diseases and injuries; (care for mother and child which included family planning, immunization, prevention of locally endemic diseases, provision of food and nutrition and adequate supply of safe drinking water)
> In India, Primary Healthcare in RURAL AREAS is provided through a NETWORK OF SUB CENTRES and PRIMARY HEALTH CENTRES in rural areas,
- The Sub centre consists of one Auxiliary Nurse Midwife and Multipurpose Health worker and serves a population of 5000 in plains and 3000 persons in hilly and tribal areas.
- THE PRIMARY HEALTH CARE CENTRE (PHC), staffed by Medical Officer and other paramedical staff serves every 30000 population in the plains and 20,000 persons in hilly, tribal and backward areas. Each PHC is to supervise 6 Sub centres.
> whereas in URBAN AREAS, it is provided through HEALTH POSTS and FAMILY WELFARE CENTRES
- Secondary Health Care= 2nd tier of health system > patients from primary health care are REFERRED TO SPECIALIST in higher hospitals for treatment.
> In India, the health centres for secondary health care include DISTRICT HOSPITALS and COMMUNITY HEALTH CENTRE at block level.
- Tertiary Health Care = 3rd level SPECIALISED CONSULTATIVE CARE is provided usually on referral from primary and secondary medical care.
> Specialised Intensive Care Units, advanced diagnostic support services and specialized medical personnel are the key features of tertiary health care.
> In India, under public health system, tertiary care service is provided by MEDICAL COLLEGES and ADVANCED MEDICAL RESEARCH INSTITUTES.
Quick Employment Survey
Quick Employment Survey= LABOUR BUREAU since 2009 > ASSESS THE IMPACT OF ECONOMIC SLOWDOWN > QUARTERLY
> The ‘ Quick Employment Survey ‘ is being conducted by Labour Bureau since January 2009 to assess the impact of economic slowdown on employment in India.
> The economic slowdown which had engulfed the world economy had its implications on the domestic economy. The Indian economy showed signs of deceleration and grew at 7.8% in the first half year of 2008-09 against an average annual rate of growth of 8.6% in the preceding three years.
> The Quick Employment Surveys are quarterly surveys. The first survey was conducted in the month of January, 2009 to study the impact of slowdown on employment during the quarter Oct-Dec, 2008 > The survey was conducted in seven important sectors of the economy viz. Textiles, Metals, Automobiles, Gems & Jewellery, Transport, IT/BPO and Mining.
> The first quarterly survey covered the construction sector, However due to non-cooperation of the sample units and unavailability of reliable data, results could not be compiled and therefore the sector is not being covered in the subsequent quarterly surveys.
> The second survey was conducted in the month of April 2009 to study the impact on employment during the quarter Jan-March, 2009. In this survey, two additional sectors namely leather and handloom/ power loom were covered whereas mining sector covered during the first survey was excluded. Hence eight sectors are being covered for this survey from then onwards.
> Ten quarterly surveys have been conducted so far
The Quick Employment Survey tries to capture changes in level of employment in two categories- Direct and contract covering both manual and nonmanual workers. The trend in exporting and non exporting units is also captured. The reports and the results of the surveys may be viewed at www.labourbureau.gov.in.
Regulation of Combinations (M&As)
Regulation of Combinations=REGULATE MERGERS & ACQUISITIONS TO MAINTAIN FAIR COMPETITION
> Worldwide term used for this concept is MERGER REVIEW/ MERGER CONTROL, which is done by COMPETITION REGULATORS to prevent mergers and acquisitions that are likely to reduce competition in the market. Which might lead to higher prices, lower quality goods or services, or less innovation.
> Some countries have voluntary regimes while most have mandatory regimes > Mandatory regime implies that enterprises above defined thresholds in the concerned competition law have to mandatorily notify the competition regulator for merger clearance.
> The term ‘combination’ for the purposes of the INDIAN COMPETITION LAW, (Competition Act, 2002) Act is defined very broadly, to include any acquisition of shares, voting rights, control or assets or merger or amalgamation of enterprises, where the parties to the acquisition, merger or amalgamation satisfy the prescribed monetary thresholds in relation to the size of the acquired enterprise and the combined size of the acquiring and acquired. The thresholds are unambiguously specified in the Act in terms of assets or turnover in India and abroad.
> Entering into a combination which causes or is likely to cause an appreciable adverse effect on competition within the relevant market in India is prohibited and such combination would be void.
> The provisions relating to regulations of combinations (M&As) in the Act are in force from June 1, 2011. The main enforcement provisions of regulation of combinations are given under sections 5, 6, 20, 29, 30 and 31 of the Act.
> The review process for combination under the Act involves mandatory pre-merger notification to the Commission of combinations that exceed the prescribed threshold. In case a notifiable merger is not notified, the Commission has the option to inquire into it within one year of the taking into effect of the merger. In case such an inquiry finds appreciable adverse effect on competition, the Competition Commission of India may order de-merger which would involve social and economic costs.
> The Commission is also authorized to impose a fine which may extend to one per cent of the total turnover or the assets of the combination.
Revenue Deficit
Revenue Deficit = GAP BETWEEN CONSUMPTION EXPENDITURE/REVENUE EXPENDITURE & REVENUE RECEIPTS
> Revenue deficit is the gap between the consumption expenditure (revenue expenditure) of the Government (Union or the State Governments) and its current revenues (revenue receipts).
> It also indicates the extent to which the government has borrowed to finance the current expenditure.
> Revenue receipts consist of tax revenues and non-tax revenues. Tax revenues comprise proceeds of taxes and other duties levied.
> The expenditure incurred for normal running of government functionaries, which otherwise does not result in creation of assets is called revenue expenditure.
> Examples of revenue expenditure are Interest Payments and Servicing of Debt, Pensions and (Union government’s) expenditure on Grants-in-Aid and contributions to States and Union Territories (State Governments too incur expenditure towards Grants-in-Aid and contribution to their Local Bodies). Even though some of these grants may be used for creation of assets, all grants given by the Union Government to State Governments/Union Territories and other entities are also treated as revenue expenditure.
> In the Union Budget (2011-12) a new methodology of capturing the ‘effective revenue deficit’ has been worked out, which takes into account those expenditures (transfers) in the form of grants for creation of capital assets.
> Elimination of the revenue deficit has been a priority for Governments, both the Union and at the State-levels, as a revenue deficit may pre-empt resources which otherwise would be available for capital investments.
> Implementation of Fiscal Responsibility and Budget Management (FRBM) legislation during the period 2005-10 has helped Governments to reduce their revenue deficits to a considerable extent.
> The global slowdown in 2008-09 and 2009-10, however, affected the consolidation process.
> The 13th Finance Commission (FC-XIII) has proposed a target of elimination of revenue deficit for the Union Government by 2013-14 and for State Governments in stages, and in a manner that all States would eliminate these targets latest by 2014-15.
> The revenue deficit target set by the Thirteenth Finance Commission for the Union Government for the current fiscal year, viz 2011-12, is 2.3% of GDP. As against this, the Medium Term Fiscal Plan of the Union Government has placed this figure at 3.4%.
> Fiscal deficit is a DIFFERENCE BETWEEN REVENUE RECEIPTS + NON-DEBT CAPITAL RECEIPTS (recovery of loans, public sector disinvestment etc) on the one side and TOTAL EXPENDITURE including loans, net of repayments, on the other.
> It measures the gap between the government consumption expenditure including loan repayments and the anticipated income from tax and non-tax revenues.
> It also indicates the borrowing requirements of the government from all sources. The bigger the gap the more the government will have to borrow or resort to printing money to make both ends meet. > Indiscriminate borrowings will push the economy into debt trap, while too much deficit financing may be inflationary.
> Increasing fiscal deficit over a period of time means government expenditure is rising faster than its revenues.
> Implementation of Fiscal Responsibility and Budget Management (FRBM) legislation during the period 2005-10 has helped the Union and State governments to reduce their fiscal deficits to a considerable extent. However, the expansionary fiscal stance of these governments during the global slowdown years (2008-09 and 2009-10) resulted in fiscal deficit moving up significantly.
> The Thirteenth Finance Commission (FC-XIII) has proposed a target of attaining a 3% fiscal deficit (of GDP) for the federal government by 2013-14 and for State Governments in stages, and in a manner that all states would attain 3 % fiscal deficit (of their Gross State Domestic Product) latest by 2014-15.
Repeat House Rent Survey
Repeat House Rent Survey (RHRS) = COLLECT DATA ON HOUSE RENT TO MEASURE THE CHANGES
> Repeat house rent survey (RHRS) is a survey conducted to collect data on house rent and related charges from a fixed sample of dwellings to measure the changes in rents for a fixed standard of accommodation and amenities.
> The index calculated forms the HOUSE RENT INDEX which is a part of the Consumer Price Index CPI (IW) with a weightage of 15.27% in the total index.
> Labour Bureau which compiles the Consumer Price Index for Industrial workers conducts the repeat house rent survey in six monthly intervals which are termed as “rounds”(January to June and July to December).
> Every month is termed as sub rounds. All the dwellings covered in a sub round are surveyed in the same sub round of every round.
> For the purpose of the survey, rent along with repair and maintenance charges, service charges like water and taxes are included while electricity charges and sweeper charges are excluded.
> The unit of the survey is a dwelling which is classified as rented, self owned and rent free. Rented dwelling is defined as the entire portion of the residential accommodation hired by the family on payment. Rent free dwelling is defined as the entire portion of dwelling occupied by the family which has been provided by the employer without charging any rent. Self owned dwelling means a residential accommodation owned and occupied by the worker. The weightage of the three types of dwelling rented, self owned and rent free in the house rent index are 75.46%, 9.49% and 15.05% respectively.
> The housing index is compiled by CHAIN BASE METHOD in which changes in rent is compared with the previous period’s rent and not with the base period as in case of other items of index. This method of calculation takes care of depreciation aspect of housing.
Rupee Denominated Debt
Rupee Denominated Debt=INDIA’S TOTAL EXTERNAL DEBT DENOMINATED IN ₹
> Rupee denominated debt refers to that part of India’s total external debt which is denominated in India’s domestic currency I.e. INR ₹
> In contrast to foreign currency denominated external debt, in rupee denominated debt the currency risk (the risk arising from appreciation or depreciation of the nominal exchange rate) is borne by the creditor and not by the borrower > The contractual liability (principal and interest that is designated to be paid by the borrower as agreed upon in the debt contract) is settled in foreign currency.
> Accordingly, the borrower always pays back the foreign currency equivalent of the rupee denomination valued at the spot exchange rate prevailing at that point in time > Thus, if the domestic currency appreciates vis-à-vis the foreign currency, the creditor stands to gain vis-à-vis the borrower since he receives more dollars per unit of Rupee.
> In India rupee denominated debt comprises the following categories;
(a) Rupee Debt; Includes the outstanding defense and civilian state credits extended to India by the erstwhile Union of Soviet Socialist Republics (USSR). The repayment is primarily through exports of goods to Russia.
(b) Rupee denominated Non-Resident Indian (NRI) Deposits including the Non-Resident (External) Rupee Account (NR(E)RA) and Non-Resident Ordinary Rupee (NRO) account.
(c) Foreign Institutional Investors (FII) investment in Government Treasury-Bills and dated securities (with such investments subject to a ceiling of US$ 10 billion annually); and
(d) FII investment in corporate debt securities (with such investments subject to a ceiling of US$ 40 billion annually).
> The Quarterly Reports on India’s external debt published by the Ministry of Finance and the RBI as well as the Annual Status Report on India’s external debt (published by the Ministry of Finance) available in the website http://www.finmin.nic.in contain information on India’s rupee denominated external debt.
At end-March 2011, 19.5 percent of India’s total external debt and 12.4 percent of India’s sovereign external debt is denominated in rupees. The difference in the two figures is accounted for by the fact that the former encompasses all the four categories ((a) to (d)) listed above while the latter takes into account only (a) and (c).
Seasonality
Seasonality=DISTINCT PATTERN OF MOVEMENT IN CERTAIN ECONOMIC VARIABLES OVER A YEAR
> Certain economic variables show a distinct pattern in their movement over a year. For instance, prices of vegetables will fall in winter season every year, sales will pick up in Christmas, diwali or any other festival season.
> These patterns, in general, can be decomposed into trend, cyclical and seasonal patterns.
> If any economic variable follows regular and predictable changes which persist every calendar year in a particular month or duration of months, then this type of pattern is known as seasonal pattern.
> The presence of such pattern is known as SEASONALITY IN TIME SERIES. These are often short term, stable and predictable change that repeats over a one-year period.
> The presence of seasonality in the economic variable can sometimes make it difficult to (a) identify the exact nature of the phenomenon represented by the sequence of observations, and (b) make any forecasts (i.e., predicting the future values of the economic variable). As such, it becomes imperative that the time series (i.e., the data of any economic variable over a certain period of years) is made free from any seasonality bias in the data. The process of removing this bias in the data is known as DE-SEASONALISATION
> There are several econometric tools available to detect seasonality. Sometimes even a simple scatter plot can easily predict the existence of seasonal factors. On the other hand, ARIMA 12 (developed by census bureau of US), Census XI and Ratio to Moving Average are some of the methods by which seasonality factor can easily be removed from the series.
> In India, the Reserve Bank of India (RBI), releases every year in the month of September, seasonal factors for some of the important items, which are very helpful in de-seasonalising WPI and IIP series.
Skewflation
Skewflation = PRICE RISE OF ONE OR SMALL GROUP OF COMMODITIES OVER A SUSTAINED PERIOD OF TIME
> Economists usually distinguish between inflation and a relative price increase. ‘Inflation’ refers to a sustained, across-the-board price increase, whereas ‘a relative price increase’ is a reference to an episodic price rise pertaining to one or a small group of commodities.
> This leaves a third phenomenon, namely one in which there is a price rise of one or a small group of commodities over a sustained period of time, without a traditional designation.
> ‘Skewflation’ is a relatively new term to describe this third category of price rise.
> In India, food prices rose steadily during the last months of 2009 and the early months of 2010, even though the prices of non-food items continued to be relatively stable. As this somewhat unusual phenomenon stubbornly persisted, and policymakers conferred on how to bring it to an end, the term ‘skewflation’ made an appearance in internal documents of the Government of India, and then appeared in print in the Economic Survey 2009-10, Government of India, Ministry of Finance.
> The skewedness of inflation in India in the early months of 2010 was obvious from the fact that food price inflation crossed the 20% mark in multiple months, whereas wholesale price index (WPI) inflation never once crossed 11%.
> It may be pointed out that the skewflation has gradually given way to a lower-grade generalized inflation, with the economy in the middle of 2011 inflating at around 9% with food and non-food price increases roughly at the same level.
> Given that other nations have faced similar problems, the use of this term picked up quickly, with the Economist magazine (January 24, 2011), in an article entitled ‘Price Rises in China: Inflated Fears,’ wondering if China was beginning to suffer from an Indian-style skewflation.
> The distinction between these different kinds of inflation is important because they call for different kinds of policy response from the government. Usually, a high inflation, and in particular core inflation, is taken as a sign of aggregate demand outstripping aggregate supply and is met with monetary and fiscal policy tightening. On the other hand, a relative price increase is often treated as the market’s natural response to exogenous demand and supply shocks and many economists would argue that they are best left with no government intervention.
> Such relative-price signals are the market’s way of informing consumers and producers what to consume less and what to produce more. To impair these signals does more damage than good.
> In terms of policy, skewflation does not fall into either of the above categories neatly. Given that it is sector specific, it is not evident that it calls for monetary or fiscal policy action. On the other hand, given its sustained nature, it is not possible for government to ignore it, since it causes stress to consumers.
> It is possible to argue that a small amount of skewflation, for instance, up to 2% per annum, centred in the food and non-tradeable sector, is a natural concomitant of high growth in an emerging economy (see Economic Survey 2010-11, Government of India, Ministry of Finance). This is because, as we know from the study of empirical patterns, the purchasing power parity of poor nations tends to catch up with industrialized nations during periods of rapid growth in the former countries. So a small skewflation, usually of up to 2%, may be natural for an economy growing rapidly.
> However, if such inflation rises to higher levels, government is forced to think of a policy cocktail, consisting of aggregate demand tightening, along with measures to improve the production and supply of goods.
SME Exchange / Platform
SME Exchange / Platform = STOCK EXCHANGE DEDICATED FOR TRADING THE SHARES OF SMALL AND MEDIUM SCALE ENTERPRISES (SMEs)
> who, otherwise, find it difficult to get listed in the main exchanges.
> The concept originated from the difficulties faced by SMEs in gaining visibility or attracting sufficient trading volumes when listed along with other stocks in the main exchanges.
> World over, trading platforms / exchanges for the shares of SMEs are known by different names such as Alternate Investment markets or growth enterprises market, SME Board etc.
> Some of the known markets for SMEs are AIM (Alternate Investment Market) in UK, TSX Ventures in Canada, GEM (Growth Enterprise Market) in Hong Kong, MOTHERS (Market of the high-growth and emerging stocks) in Japan, Catalist in Singapore and the latest initiative in China - Chinext. (For comparative statistics see World Federation of Exchanges).
> In India, “SME exchange” is defined in Chapter XA of the Securities And Exchange Board Of India (Issue Of Capital And Disclosure Requirements) Regulations as a trading platform of a recognised stock exchange or a dedicated exchange permitted by SEBI to list the securities issued in accordance with Chapter XA of SEBI (ICDR) Regulations and this excludes the Main Board (which is in turn is defined as a recognized stock exchange having nationwide trading terminals, other than SME exchange).
> To be listed on the SME exchange, the post-issue paid up capital of the company should not exceed Rs. 25 Crores > This means that the SME exchange is not limited to the Small and Medium Scale enterprises which are defined under [1] The Micro, Small And Medium Enterprises Development Act, 2006 as enterprises where the investment in plant and machinery does not exceed Rs. 10 crores.
> As of now, to get listed in the main boards like, National Stock Exchange, the minimum paid up capital required is Rs. 10 cr and that of Bombay Stock Exchange is Rs. 3 cr. Hence, those companies with paid up capital between Rs. 10 cr to Rs. 25 cr has the option of migrating to the Main Board / or to SME exchange.
> The companies listed on the SME exchange are allowed to migrate to the Main Board as and when they meet the listing requirements of the Main Board and there shall be compulsory migration of the SMEs from the SME exchange, in case the post issue paid up capital is likely to go beyond Rs 25 crore limit.
Globally, most of these SME exchanges are still at an evolving stage considering the many hurdles they are facing like, declining prices of listed stocks and their illiquidity, a gradual reduction in new listings and decline in profits of the exchanges etc. For instance, AIM had three predecessors; CATALIST succeeded SESDAQ with new regulations and listing requirements. In most jurisdictions, idea of a separate exchange for SMEs have become unviable and hence tend to be platforms of existing exchanges, perhaps cross-subsidized by the main board / exchange. Similarly, in India, after the two previous attempts -Over the Counter Exchange of India and Indonext - the market regulator, Securities and Exchange Board of India (SEBI) vide its [2] circular dated May 18, 2010 has permitted setting up of a dedicated Stock exchange or a trading platform for SMEs. The existing bourses in India, BSE and NSE went live on 13 March, 2012 with a separate trading platform for small and medium enterprises (SME). BSE has named its SME platform as BSESME while NSE has named it as Emerge.
Unlike in India, many of these SME exchanges in various countries operate at a global level, due to smallness of the market, allowing for listing by both domestic as well as foreign companies. Though the names suggest that they are set up for SMEs, these exchanges hardly follow the definition of SMEs in their respective jurisdictions. Also, many of them follow a Sponsor-supervised” market model, where sponsors or nominated advisors decide if the listing applicant is suitable to be listed or not; i.e., generally no quantitative entry criteria like track record on profitability or minimum paid up capital or net worth etc are specified to be listed in these exchanges. Instead, they are designed as “buyers beware” markets for informed investors. SEBI has also designed the SME exchanges in a similar format with provisions for market making for the specified securities listed on the SME exchange.
As is the case globally, certain relaxations are also provided to the issuers whose securities are listed on SME exchange in comparison to the listing requirements in Main Board, which inter-alia include, publication of financial results on “half yearly basis”, instead of “quarterly basis”, making it available on their website rather than publishing it, option of sending a statement containing the salient features of all the documents instead of sending a full Annual Report, no continuous requirement of minimum number of shareholders though at the time of IPO there needs to be a minimum of 50 investors etc. The existing eligibility norms like track record on profits, net worth /net tangible assets conditions etc. have been fully relaxed for SMEs as is the case globally. However, no compromise has been made to corporate governance norms.
Viability Gap Funding (VGF)
Viability Gap Funding (VGF) = Grant one-time or deferred, provided to support infrastructure projects that are economically justified but fall short of financial viability.
> The lack of financial viability usually arises from long gestation periods and the inability to increase user charges to commercial levels.
> Infrastructure projects also involve externalities that are not adequately captured in direct financial returns to the project sponsor.
> Through the provision of a catalytic grant assistance of the capital costs, several projects may become bankable and help mobilise private investment in infrastructure.
> Government of India has notified a scheme for Viability Gap Funding to infrastructure projects that are to be undertaken through Public Private Partnerships. It will be a Plan Scheme to be administered by the Ministry of Finance with suitable budgetary provisions to be made in the Annual Plans on a year-to- year basis > The quantum of VGF provided under this scheme is in the form of a capital grant at the stage of project construction > The amount of VGF will be equivalent to the lowest bid for capital subsidy, but subject to a maximum of 20% of the total project cost > In case the sponsoring Ministry/State Government/ statutory entity propose to provide any assistance over and above the said VGF, it will be restricted to a further 20% of the total project cost > Support under this scheme is available only for infrastructure projects where private sector sponsors are selected through a process of competitive bidding.
> The project agreements must also adhere to best practices that would secure value for public money and safeguard user interests.
> The lead financial institution for the project is responsible for regular monitoring and periodic evaluation of project compliance with agreed milestones and performance levels, particularly for the purpose of grant disbursement.
> VGF is disbursed only after the private sector company has subscribed and expended the equity contribution required for the project.
