"Impact of Make in India"

Inheriting a faltering economy, with GDP growth rate of under 5% (2013-2014), high
inflation (9 to 11 %), fiscal deficit of $86.08 billion (2013-14), red tape and rampant
corruption, Prime Minister NarendraModi had his task cut out. His immediate challenge
was to dispel the uncertainty around the Indian economy and make it a preferred stop
for investors. The 'Make in India' campaign was, thus, launched on 25th September
2014 and is part of the government's efforts to promote India as an investment friendly
destination.
'Aim of 'Make in India'
The slogan clearly points to the government's aim to make India a global manufacturing
hub. This signals a paradigm shift in focus, from tertiary to manufacturing. The
government reckons that the next big push for the Indian economy will come from the
manufacturing sector, which recorded a declining growth rate of 0.2% in 2013-14,
according to the Ministry of Statistics and Programme Implementation. Manufacturing
contributes only 15% to India's GDP and the government wants to raise it to 25%. For
this, the government has identified 25 key sectors, which include: automobiles, auto
components, bio-technology, chemicals, defence manufacturing, electronic systems,
food processing, leather, mining, oil and gas, ports, railways, ports and textile.

Opportunity to resolve long pending issues

The 'Make in India' campaign is significant as it provides an opportunity to resolve long
pending issues such as land acquisition, unpredictable tax regime, poor infrastructure,
unreliable power supply and sluggish bureaucracy, all of which have contributed in
dissuading investors from investing in India. The focus on manufacturing will drive
growth in allied sectors as well, such as infrastructure and energy. To attract investors,
it is also important to ensure safe places away from the city where they can set up their
factories. Therefore, only a holistic plan to clear all bottlenecks, which have hindered
growth, can put Indian economy back on the accelerator.
Impact of 'Make in India'
The impact of this campaign will be felt both domestically and internationally. The
development of the manufacturing sector will create employment opportunities for the

youth of the country, alleviate poverty, attract investments, create value for Indian
goods and fix the rising trade deficit. Internationally, it will improve India's standing in
the world and investors will look at India not merely as a market but as an opportunity.
The interaction between domestic and international firms will, inevitably, help transform
domestic firms into MNCs. Just as China has emerged as the top manufacturing country
in the world (replacing US in 2010), generating an estimated $2.9 trillion in output in
2012 according to United Nations, India, too, can exploit the advantages of democracy,
demography and demand to transform itself into a self-reliant force, capable of meeting
the aspirations of its own people as well as becoming a preferred destination for foreign
funds.
Furthering his development agenda, the Prime Minister has been making an aggressive
pitch at various forums to woo not just Indian companies but foreign investors as well.
Though, it is too soon to predict the outcome of this particular campaign, the initial
signs are encouraging. Foreign governments and investors are warming up to the 'Make
in India' campaign. The US-India Business Council has identified upwards of $41 billion
for investment in India by its members in the next 3 years. Japan has pledged to invest
$33.6 billion in India within the next 5 years. China, too, has pledged investments
worth $20 billion.
The government has backed this campaign by taking steps such as:
setting up 'Invest India' (will act as the first reference point for assisting
investors)
setting up a dedicated web portal "http://www.makeinindia.com" to resolve all
queries

setting up of an expert panel to redress grievances and handle queries of global

and domestic investors within 24 hours

raising FDI caps in railways and defence production to 100% and 49%
respectively

The environment of positivity created by this campaign has significantly improved the
perception of the Indian economy.

PradhanMantri

Jan

DhanYojana

Critical

Appraisal

The objective of the Eleventh Five Year Plan (2007-12) was to achieve a faster and
more inclusive growth in order to make the poor and downtrodden people a participant
in the growth process while allowing the fruits of growth to percolate to the lowest
strata of the society. Though eleventh five year plan achieved the faster growth but
progress in making the benefits of growth reach the lowest strata of the society has
remained far from being satisfactory. Until and unless financial inclusion is made an
inalienable part of the growth process, dream of inclusive growth is hard to achieve.
For that matter, Government of India on August 28, 2014, launched one of its most
ambitious schemes, the PradhanMantri Jan DhanYojana (PMJDY), to provide bank
account to each poor in every corner of the country and thus wipe out the financial

untouchability from the country. Till January 31, 2015, as many as 12.547 crore bank
accounts of poor have been opened under the scheme and balance under such accounts
has reached more than INR10,500crores.
Salient Features of the Scheme

Under the scheme, account holders will be provided zero-balance bank account
with RuPay debit card, in addition to accidental insurance cover of INR100,000
After six months of opening of the bank account, holders can avail INR5,000 loan
from the bank.

With the introduction of new technology introduced by National Payments

Corporation of India (NPCI), a person can transfer funds, check balance through
a normal phone which was earlier limited only to smart phones so far.

Mobile banking for the poor would be available through National Unified USSD
Platform (NUUP) for which all banks and mobile companies have come together.

The scheme has simplified the Know Your Customer (KYC) norms making it easy
to open an account at private as well as public sector banks.

Other benefits of the scheme includes easy transfer of money across India,
beneficiaries of Government Schemes will get Direct Benefit Transfer in these
accounts, access to pension and insurance products etc.

PMJDY and Erstwhile Financial Inclusion Schemes

PMJDY focuses on coverage of households as against the earlier financial inclusion plan
(Swabhiman) which focused on coverage of villages. PMJDY focuses on coverage of
rural as well as urban areas. Earlier plan targeted only villages above 2000 population
while under PMJDY whole country is to be covered by extending banking facilities in
each Sub-Service area consisting of 1000 1500 households such that facility is
available to all within a reasonable distance, say about 5 Km.
Challenges
Undoubtedly, PMJDY turns out to be revolutionary scheme and was placed in the
Guinness Book of World Records for opening 1.80 crores bank accounts in a week after
the launch of the scheme. Though scheme is doing well even after the six months of its
launch, still, there are several challenges which may erupt in the course of time
Public Sector Banks (PSBs) are mainly responsible for the scheme
implementation. The scheme will increase the burden of PSBs which are already
plagued with inefficiencies and bad loans.
Monitoring of such a large scheme is a very cumbersome task. With lack of
monitoring, it is very likely that inefficiencies and red tapism may cripple the
scheme in long run making it similar to its predecessors.

Just like MNREGA was the most ambitious programme of UPA government,
PMJDY is flagship programme of NDA government. Until and unless,
discrepancies in MNREGA are resolved through social audits or other measures,
ultimate objective of PMJDY is hard to achieve as wages of MNREGA will now be
transferred into PMJDY account.

Level of financial literacy in India is far from being satisfactory. Financial illiteracy
is a significant challenge in the path of success of the scheme.

Availability of bank branches and ATMs in rural areas poses another challenge.
Though banking has been made easy but unavailability of banks and ATMS in
nearby areas may force rural folks to go to the local money lender who usually
charges exorbitant rate of interest.

Nevertheless, there is no denying of the fact that without financial inclusion, dream of
inclusive growth will remain elusive. For that matter, PMJDY is the most important
scheme launched to achieve the objective of financial inclusion.

Environment Protection & Development Can Go Hand In Hand

Since the second half of the 20th century, rapid development was witnessed across the
world which resulted in the rapid degradation of environment surrounding us. In the
quest of development, man ignored the very environment which is vital for sustaining
the life on the planet earth. The ruthless development increased the percentage of
green house gases (GHGs) in the atmosphere which led to the rise in the long term
mean temperature of the earth often called as global warming. The primary
greenhouse gases in the Earth's atmosphere are water vapor, carbon dioxide, methane,
nitrous oxide, and ozone.
GHGs and their concentration in the atmosphere is increased due to the burning of
fossil fuels, clearing of forests etc. The global warming has increased the frequency of
extreme weathers conditions like droughts, floods, cyclones etc. which would ultimately
affect the crop production in almost all countries. Since agriculture sustains the life of
the poorer sections of the society, changing weather pattern is putting their existence
as well as food security at stake.
Projections by the International Energy Agency (IEA) say that annual medium
temperatures could rise 5.3 degrees by the end of 21st century, if countries across the
world don't take action. All the governments in the world realised the need of restoring
the environment balance and therefore called for the sustainable development.
Sustainable development is defined as catering to the needs of present generation
without comprising the needs of the future generation. In India too, several measures
were undertaken to protect the environment like passing of Environment (Protection)
Act 1986 which made it mandatory to get environment clearance for any big project.
For a country like India where substantial chunk of population could hardly meet its
daily need, economic development is only pill which could pull these people from the
quagmire of poverty. For the rapid economic development of the country, new projects
like power plants, mines etc. needs to be implemented which are the core inputs for all
other industries. However, in India apart from the bureaucratic red tape, such projects
are often get stalled due to the objections by Environment Ministry. It often leads to the
confrontation between environment ministry and other ministries.

If environment protection is the basic requirement for sustaining the healthy life on the
globe, economic development is no less important to assure the quality of life of the
inhabitants of the earth. If climate change is a reality encountered by the world,
development is the basic requirement for reducing the economic and social inequality.
The only option left for the humans is to tread on the path of sustainable development
which improves life of a person without adversely affecting the environment
surrounding him. As once Mahatma Gandhi has said, Earth provides enough to satisfy
everymans need but not enough for any mans greed, sustainable development also
calls for the development in perpetuity which is not possible if the environment is
ignored.
It is true that clean technologies are bit expensive and increase the cost of production,
the polluting technologies would cost more by increasing the expenditure on healthcare.
The polluter must pay principle should be adopted universally to generate the funds for
environment protection.
It must be noted that environment protection is not to put environmentalist and
developers at the loggerheads but to make development in synergy with the
environment. In the quest of increasing the GDP, policy makers must not forget the
Green GDP. Indeed, environment protection and economic development can go and
must go hand in hand.

Skill Development in India: Not Commensurate to the Required

Growth
India is one of the youngest countries in the world where more than 65 % of its population is
below 35 years of age while in most other developed societies proportion of young population is
decreasing. In this backdrop, many jobs from the developed world are expected to be outsourced
to developing and relatively young countries like India. This is often referred as Demographic
Dividend. However, the problem with Indian workforce is that majority of them is unskilled
while the most jobs in developed world require skilled labor.
Indian government was quick to realise the potential of younger workforce of India and initiated
several schemes to impart the skills into the labour force to make them suitable for any job
outsourced by the developed countries. For that matter, National Skill Development Corporation
(NSDC) was conceived under public private partnership to develop skills commensurate to the
expanding economy. It has an equity base of INR10 crore, of which the private sector holds 51
percent, while the Government of India controls 49 percent. This makes NSDC a one-of-its-kind
public private partnership in education in India.
Currently NSDC is focussing on 21 high priority sectors & these are Automobile/autocomponents, Electronics hardware, Textiles and garments, leather goods,
Chemicals and pharmaceuticals, Gems and jewellery, Building &construction,
Foodprocessing, Handlooms and handicrafts, Building hardware and home
furnishings ,IT or software, ITES-BPO, Tourism, hospitality&ravel,
Transportation/logistics/warehousing and packaging, Organised retail, Real

estate, Media, entertainment, broadcasting, content creation, animation,

Healthcare, Banking/insurance and finance, Education/skill development
and Unorganized Sector
Meanwhile National Skill Development Coordination Board (NSDCB) was also constituted to
coordinate the skill development efforts of a large number of Central Ministries/Departments and
States. In the Central Government, around 20 Ministries are closely involved in skill
development. Most State Governments also have set up State Skill Development Missions as
nodal bodies to anchor the skill development agenda in the State.

However, things are not going as was desired. Multiple agencies have been created at
various levels spreading across approximately 20 separate ministries and 35 state
governments and union territories with overlapping and conflicting priorities. Though
National Skill Development Agency (NSDA) was created in 2013 to consolidate efforts in
this sphere, it mainly has a coordination role, lacks any effective powers and remains
significantly under-resourced. Training infrastructure and capacity is another challenge.
It is estimated that various publicly funded organizations produce 3.5 million trained
personnel per annum against the 12.8 million new entrants into the workforce each
year.
Thus a domestic skill development policy needs to be overhauled. The institutional
structure needs simplification with greater investment in training infrastructure and an
emphasis on supporting a casual labour force. There is also a needto ensure
participation of private sector in the training and skill development by virtue of a
suitable incentive policy. Apart from this, regular education is also required to be

dovetailed with the industry requirement. In the light of highly specialized nature of
jobs which would be created in future, it is required that government have to give the
top most priority to ensure the more inclusive growth in future.
Wind Energy in India - Reaching New Heights Every Day
Wind energy is the form of energy extracted from wind and is used in the production of
electrical power with wind turbines, mechanical power using windmills, for water
pumping wind-pumps and in sails for propelling ships. Its a renewable and hence a
clean source of energy. This is the only source of energy for which man doesnt require
water.
India is the only country to have a dedicated ministry for Renewable Energy. Ministry of
New and Renewable Energy (MNRE) headquartered at Lodhi Road, New Delhi is a
ministry formed in 1992 by The Government of India. The ministry has a specialized
technical institution in Chennai with the name Centre for Wind Energy Technology (CWET) under its aegis. The ministry has also formed the India National Offshore Wind
Energy Authority with an objective to enhance Indias wind power production and
consumption.
Till 2006 India had only 6270MW of Wind Power Installed capacity but later made a
steady progress and crossed the 20kMW bar taking India to fifth position in the world in
installed wind power capacity. The share of Wind energy in total installed capacity of the
country is 8.5% but it generates 1.6% of the countrys total power. Wind Energy has
the highest contribution of 66.7% in the total Renewable energy (comprising various
sources) of India.
Region wise, Tamil Nadu is the major contributor in Indias total Wind power installed
capacity i.e. 7253MW followed by Gujarat (2093MW) and Maharashtra (2976MW).
Then Rajasthan stands fourth with 2355MW of capacity and rest of the nation
contributes only 400MW. The Muppandal wind farm with total capacity of 1500MW,
amounting to 20% of the countrys capacity, is the largest wind power farm in India.

Suzlon is the market leader in wind energy segment in India with 43% of market share.
It has pioneered the advanced wind turbine technology currently in use in India. It is

also a leading manufacturer of wind turbines for the Indian Market. Other contributing
companies in this field are Subhash Limited, Minerals and Metals Trading Corporation
Limited (MMTCL), Gudimangalam Wind Farm etc.
However, future of wind energy in India is hindered by following factors
1. Initial cost for wind turbines is very high, even more than that of conventional
fossil fuel generators per MW installed
2. The controversial and tough Land acquisition policies.
3. Noise pollution these plants generate
The total power potential of India is around 300-400GW according to the Lawrence
Berkley National Laboratory while potential from Wind energy is about 102GW. In the
12th five year plan, Government of India has set a target of adding over 11GW capacity
Wind Energy Plants in the country. Ministry of New and Renewable Energy (MNRE) of
India has announced a revised estimation of the potential wind power resource from
initial estimates of 49,130 MW to 102,788 MW.
Also there are several reports about potential for off-shore wind energy hot spots in
India, which include coastal area of Gujarat, Tamil Nadu, Andhra Pradesh and Orissa.
The future of Wind energy seems bright and is definitely going to lead India towards
energy sufficiency and security.
Mangalyaan has made India proud !
It is true that necessity is the mother of invention but there are several other
milestones achieved by the human beings during the course of evolution not due to the
necessity but because of curiosity in human mind. If the human mind would have been
devoid of any curiosity about the unknown, we might still be living in the Paleolithic
age.
The latest Mangalyaan or the Mars Orbiter Mission (MOM) endeavor by the Indian Space
Research Organization (ISRO) is too driven by the curiosity about the unknown in the
outer space. In fact the rover sent to the Mars by National Aeronautics and Space
Administration (NASA) of the United States was also named as Curiosity.
During the initial stage of Mangalyaan in the backdrop of premature death of
Chandrayaan mission, there was some criticism on the ground of cost borne for such
mission by a developing country like India which can use this money for various social
needs
like
public
health,
removal
of
poverty
etc.
But the truth is that such projects are more important for a developing country like
India which had made us into the ranks of interplanetary nations. It is not an
extravagant expenditure but an investment driven by curiosity into the unknown which
may open the door of insurmountable benefits in future. Now daring to look beyond the
earth into the infinite universe, India has expanded its possibilities by infinity.
After the successful insertion of MOM into the Mars orbit on September 24, 2014, India
became the first country in the world to achieve such event in its very first attempt and
the
third
one
overall
to
do
so
after
the
US
and
Europe.

On November 5, 2013, MOM was launched by Polar Satellite Launch Vehicle (PSLV
C25) from ShriHari Kota in Andhra Pradesh. Apart from the success of this mission,
another thing which makes every Indian proud is that it is made with mainly home
grown Indian technologies. The parts of the Mangalyaan were made in small factories in
India. The main foreign contribution to this mission's success has been the irreplaceable
communications services of NASA's Deep Space Network, delivering Mars Orbiter
Mission's
messages
to
Earth.
It is the cheapest successful interplanetary mission ever carried out. The entire cost of
the mission is USD74 million (INR453 crore) which is less than the budget of Hollywood
movie Gravity which was about USD100 million (INR 612 crore). The average cost of
the mission borne by people of India is INR4.0 per person. The per kilometre cost of the
mission was less than INR 7 per km, which is less than the cost of travel by an autorickshaw
in
major
Indian
cities.
The pride generated by Mangalyaan among Indians can be judged by the frustration
caused by the mission in our western neighbor. After the success of MOM, infamous
nuclear scientist of Pakistan Abdul Qadeer Khan tweeted, India had reached Mars at a
price seven times less than that of a metro bus project while Pakistani PM Nawaz Sharif
was enjoying his US visit spending $1 lakh per day of taxpayers' money. In another
tweet, he said, "India was once a child to us in terms of technology, but corrupt
politicians arrested our scientists, closed researches on US direction." However, India
received compliments as well where website of Pakistani newspaper 'Tribune Express'
stated: "Congratulations to India. Really, we need to look at our neighbor and gauge
where
and
how
we
have
fallen
behind."
The Mangalyaan will study Mars for around six months. In addition to cameras that will
photograph Mars' surface, it is equipped with different instruments that will analyze the
planet's
atmosphere,
looking
for
methane
in
particular.
Scientists believe that, if methane is present, it could be a sign of microbial life and will
give some hints about the origin of life. Some previous crafts have detected traces of
methane,
but
the
Curiosity
rover
has
failed
to
find
any.
Thus the objective of MOM is not just to show the Indian entry into other planets but
scientific investigation as well. The mission is indeed a proud moment for every Indian
as it has expanded its horizons beyond our green planet and now not just sky but the
universe is limit.

General Awareness Topic - PM Jan Dhan Yojana: Pros and Cons

As announced during Prime Minister Narendra Modis Independence Day speech this
August, the government rolled out its ambitious financial inclusion programme, the
Pradhan Mantri Jan Dhan Yojana (PMJDY).

Aimed at improving the lives of millions of Indias poor, both in rural and urban, by
bringing them into the financial mainstream, the PMJDYs target is to open 7.5 crore
bank accounts by January 2015.
To achieve that goal, the programme will help people to open zero-balance accounts
with any bank, either public or private, with far more simple Know-Your-Customer rules
and minimal documentation. An Aadhaar card is just all required to open a Jan Dhan
account, which also comes with accident insurance benefit of up to Rs 1 lakh with each
account.
Further, accounts opened before January 26, 2015 will also get an additional life cover
of Rs 30,000. Jan Dhan account holders will also get an overdraft facility subject to
conditions.
The moot question, however, is why PMJDY? Will it help achieve governments
envisaged goals or become another lofty scheme waiting in files for its eventual death?
The case for expanding the scope of organized banking to every nook and corner of the
country is strong.
At present, only 58% of Indian households have access to banking services, which
means more than 40% of households lack access to formal credit and finance system
and therefore, are forced to depend on usurious money-lenders. Furthermore, potential
investors among them have no option but to put money in shady Ponzi schemes.
A formal bank account becoming the norm will also help the government to directly pay
all subsidies into the accounts of the poor and help plug the leaks. An efficient,
transparent and sleek system of subsidy disbursal will help the government to better
assess and implement its social welfare schemes.
Critics, however, ask: how is the scheme different from previous schemes to provide
organized access to credit to the rural and urban poor?
How the government will finance insurance premium and viability of maintaining these
bank accounts? At a time when banks are shifting to the concept of privileged access
and priority services, will banks give good service to zero-balance account customers?
Whether the government or BFSI, the taxpayer will have to share the burden of yet
another government scheme.
The initial response to the scheme has been quite encouraging with 1.5 crores account
opened on the first day. Industry too has welcomed the scheme but expects sound and
efficient implementation to create lasting impact on poverty eradication.
Following are the perceived pros and cons of PMJDY :
Pros
Expand banking, financial & insurance sectors
Allow direct cash transfer to targeted beneficiaries

Plug the leaks in subsidy system

Ensure transparency, weed out corruption

Cut avenues for black money generation

Remove the influence of money lenders & Ponzi schemes

Better data collection & assessment

Cons
Another social welfare scheme
Questionable viability of banking, insurance accounts

Priority versus freebies banking

Burden on the taxpayer

A Weak Indian Rupee: Advantages & Disadvantages

Almost a year ago, Indian National Rupee (INR) witnessed its worst time where its
value slumped to the record low nearing 69 per dollar in August, 2013. However,
gradually things improved and now the Rupee value is currently hovering around 60 per
dollar.
At one point of time, for instance in 1991 when Rupee was devalued, any fall in the
value of Rupee was never appreciated mostly because it was considered to be the blot
on the countrys prestige. How a fall in the value of national currency could bring cheers
to the nation?
Till 1991, Indias trade engagement with the rest of world was very limited and India
was considered to be a closed economy. With little contact with the outside world, the
impact of devaluation or evaluation of currency was also very limited. But after 1991,
when the era of LPG (Liberalization, Privatization and Globalization) started, a new era
was ushered where India expanded its horizons and became the part of the global
market. System of exchange rate determination was also changed 1990s when fixed
exchange rate (determined by Reserve Bank of India) was replaced by flexible
exchange rate system (determined by market forces).
As India embarked on market economy, grounds for analysing the impact of change in
Rupee value also changed. Now it is analysed on the basis of its practical impacts on
the economy.
Negative impacts of Rupee depreciation over an economy are
Depreciation strengthens inflationary forces. When the inflation rises, prices of
goods and commodities shoots up. Therefore, the purchasing power of the rupee
falls down.
A depreciation of the domestic currency results in higher import costs for the
country. Failure of a similar rise being experienced in the prices of exportable
commodities is going to result in a widening of current account deficit (CAD) of
the country.

Foreign Travel and Overseas Education becomes costlier.

The interest burden would increase on foreign currency denominated debt.

A large and rapid devaluation may scare off international investors. It makes
investors less willing to hold government debt because it is effectively reducing
the value of their holdings.

However, there are positives of the depreciation as well and many industries
cheer the depreciation
Exports become cheaper, more competitive to foreign buyers. Therefore, this
provides a boost for domestic demand.
Travel to India gets cheaper; local industry may benefit.

Those working abroad can gain more on remitting money to their homeland.

Ultimately, it assists in reducing the current account deficit.

The ability of depreciation to affect the exports and imports depends upon the demand
elasticity of goods and services exported or imported. For instance, if the oil imports are
demand inelastic i.e. price of oil has little impact on its import demand, depreciation will
have little impact on current account deficit.
Nevertheless, there are some other benefits of depreciation also which doesnt accrue
directly. Rupee depreciation raises the cost of components and goods for importdependent businesses. It puts them at a disadvantage vis--vis companies that are net
exporters. So while rupee depreciation seems to be painful in the short term, it may
turn out to be a blessing in disguise for the Indian manufacturing sector in the medium
to long term.
A cheaper rupee will incentivise Indian companies to export more besides helping them
substitute some of the costlier imported goods in the domestic market with local
products. Thus, despite strengthening the ills like inflation, Rupee depreciation has its
positives and can help in developing the manufacturing base of the economy.