Pradhan Mantri Fasal Bima Yojana

The Union Cabinet chaired by the Prime Minister Narendra Modi  approved the New Crop Insurance Scheme,‘Pradhan Mantri Fasal Bima Yojana’ to boost the agricultural sector.
The theme of the Scheme is One Nation – One Scheme. In this, all shortcomings and weaknesses of all previous schemes were removed and incorporated with the best features of all schemes.
 Highlights of the scheme are:
• Farmers will pay a uniform premium of only 2 percent for all Kharif crops and 1.5% for all Rabi crops.
• In case of annual commercial and horticultural crops, farmers will pay a premium of only 5 percent. The balance premium, after farmers paying the premium at very low rate, will be paid by the Government to provide full insured amount to the farmers against crop loss on account of natural calamities.
• There will not be any upper limit on Government subsidy. Even if balance premium is 90%, it will be borne by the Government.
• Earlier, there was a provision of capping the premium rate which resulted in low claims being paid to farmers. This capping limited the Government outgo on the premium subsidy. Now, this capping was removed and farmers will get full sum insured without any reduction against their claim.
• The usage of technology will be encouraged to a great extent. Smart phones will be used to capture and upload data of crop cutting to reduce the delays in claim payment to farmers. Remote sensing will be used to reduce the number of crop cutting experiments.

Salient Features of Sixth Economic Census

• Covered all States and Union Territories of Indian Union
• Fieldwork conducted during January, 2013 to April, 2014 in collaboration with State/UT Governments
• Enumerated all establishments engaged in various agricultural and non-agricultural activities excluding crop production, plantation, public administration, defence and compulsory social security
• Used Enumeration Blocks (EBs) of Population Census, 2011 as the primary geographical units for collection of data
• About 7 lakh enumerators and 3 lakh supervisors deployed to collect information from the entire country comprising about 25 lakh Population Census EBs
• About 20,000 training programmes, each with a participation of around 50 persons organized
• Certain changes made in the main schedule of enquiry to guard against omission of home-based establishments or those operating from outside household without fixed structure
• Data for handicraft/handloom establishments collected for the first time
• A Standing Committee under the Chairmanship of Chief Statistician of India & Secretary, MoSPI looked into various aspects of work with technical support provided by a Working Group
• State Level Coordination Committees under the chairmanship of Chief Secretaries and District Level Coordination Committees under the chairmanship of District Collectors constituted for smooth conduct of the Census
• Overall coordination at all-India level and guidance provided by the Economic Statistics Division of CSO

Thirty Software companies detach from NASSCOM to form “iSpirt”

30 Indian software product companies have decided to form a new association called the Indian Software Product Industry Round Table, or “iSpirt”.
Why this separation:
Software companies involved in forming the new group have felt the need to create a new body which would be a group of Software Products companies rather than IT services companies like TCS, Infosys, and Wipro etc. which dominate NASSCOM. The objective is to bring all the software product companies (large and small) to share expertise and experiences, and create a larger awareness in society and government about the critical role the industry can play and something they believe they cannot effectively do under the larger NASSCOM umbrella. They have named the new body as Indian Software Product Industry Round Table, or iSpirt. Founding companies include Tally Solutions, QuickHeal, InMobi, Nucleus software, and industry stalwarts. The idea is to create and promote mass-solution software that can be bought off the shelf, like MS Windows or Office. The new association’s members want to offer education software for all schools rather than just IITs/IIMs.
The thirty founding members are led by Bharat Goenka, co-founder of Tally Solutions, Sharad Sharma, former head of Yahoo India R&D, startup mentor and founder of Brand Sigma, Naveen Tewari, founder of In-Mobi , and Vishnu Dusad, founder of Nucleus Software.
Why they are emphasizing on software products over software services?
Software services which are offered by IT service providers like TCS, Infosys cater to the needs of small number of people whereas the scalability of Software Product like Microsoft office, Tally is very high and many of its operations can be performed by the user itself.

Aircel offers ‘Mobile Money’

The Telecom operator Aircel has launched a new service called ‘Mobile Money’ in collaboration with ICICI Bank and Visa to enable its customers transfer money, pay bills and withdraw cash by using only their mobile phones—without having to make a trip to the bank or an ATM.  It is similar to Vodafone’s M-Pesa service which first pioneered to great success in Africa.
The service will be initially rolled out in Tamil Nadu, specifically for the Chennai – Tirunelveli corridor – to help migrant labourers send back money to their villages.
How does it work:
A person who wishes to transfer money from A location to B destination will have to deposit the money with a correspondent in the A area, after which an SMS is sent to the recipient confirming the transaction details. The recipient has to merely go to a banking correspondent in their respective area (B) to retrieve the cash.
This plan will work even if both parties have no ICICI bank account, with the minimum amount needed to start an account being Rs. 100. The company will make money by charging commission ranging from 1.5 to 3% on each transaction.

42% workers are now ‘middle-class’: ILO report

The middle class is rising in a big way, especially in developing countries. About 42 per cent of workers, or nearly 1.1 billion, are now ‘middle-class’, living with families on over Rs 225 ($4-13) per person per day, says a new ILO report.

By 2017, the developing world could see the addition of 390 million more workers in the middle class, the International Labour Organisation (ILO) report says.

“Over time, this emerging middle-class could give a much needed push to more balanced global growth by boosting consumption, particularly in poorer parts of the developing world,” said Steven Kapsos, one of the authors of the Global Employment Trends 2013.

Employment growth

However, the report raises a red flag for employment growth in 2013-14, even if there is a moderate pick-up in output growth.

It estimates that the number of unemployed worldwide may rise by 5.1 million to more than 202 million in 2013 and by another 3 million in 2014, half-a-million of which will be youth.

“The indecision of policy-makers in several countries has led to uncertainty about future conditions and reinforced corporate tendencies to increase cash holdings or pay dividends rather than expand capacity and hire new workers,” says the report.

GDP growth

The ILO report noted that in India, growth in investment contributed 1.5 percentage points to the overall GDP growth over the past year, down from 1.8 percentage points in 2011, while the contribution from consumption declined to 2.8 per cent versus 3.2 per cent the previous year.

Job creation, labour productivity

For countries such as India, the report called for focus on both employment creation and labour productivity.

It noted that in India, even where jobs were created, a large number of workers remained in agriculture (51.1 per cent), in the urban informal sector or in unprotected jobs (contract) in the formal sector.

The share of workers in manufacturing was just 11 per cent in 2009-10, no higher than a decade earlier.

Like many regions, growth has failed to deliver a significant number of better jobs in the formal economy.

Formal employment

Most notably in India, the share of formal employment has declined from around 9 per cent in 1999-2000 to 7 per cent in 2009-10, in spite of record growth rates, it said quoting a study.

Using a comparable definition for the latest year available, the report said the share of workers in informal employment in the non-agricultural sector stood at 83.6 per cent in India (2009-10), 78.4 per cent in Pakistan (2009-10) and 62.1 per cent in Sri Lanka (2009).

Significantly, the report noted that unemployment rates increased rapidly for high-skilled workers, especially women.

“Indians with a diploma suffer particularly, with unemployment rates reaching 34.5 per cent for women and 18.9 per cent for men during 2009-2010,” it added.

RBI hikes FII limit in Govt securities, corporate bonds by $5 billion

The Reserve Bank today hiked FII investment limits in Government securities and corporate bonds by $5 billion each, taking the total cap in domestic debt to $75 billion, with a view to bridging the current account deficit.

Further liberalising the norms, the three-year lock-in period for foreign institutional investors (FIIs) purchasing Government securities (G-Secs) for the first time has been done away with, RBI said.

The sub-limit of $10 billion for investment by FIIs and long-term investors in G-Secs stands enhanced by $5 billion, it said.

The limit in corporate debt, other than infrastructure sector, stands enhanced from $20 billion to $25 billion, RBI said.

With an increase of $5 billion in each of the two categories, FIIs and long-term investors can now invest $25 billion in G-Secs and $50 billion in corporate debt instruments, taking the total to $75 billion.

The earlier FII investment limit in G-Secs was $20 billion and for corporate debt it was $45 billion, including a sub-limit of $25 billion for infra bonds.

RBI further said: “Residual maturity condition shall not be applicable for the entire sub-limit (in G-Secs) of $15 billion but such investments will not be allowed in short-term paper like Treasury Bills, as hitherto”.

The overall FII limit of domestic debt is distributed through a host of categories across Government, corporate and infrastructure debt.

Long-term investors include sovereign wealth funds, multilateral agencies, pension funds and foreign central banks.

Government, which is battling a high current account deficit (CAD) — the gap between inflows and outflows of foreign funds — is trying to attract more foreign funds into the country.

The CAD touched a record high of 5.4 per cent in the July-September quarter of the current fiscal.

In order to check the outflow of foreign currency, the Government recently hiked the import duty on gold and also took steps to encourage mutual funds to park their gold in deposit schemes offered by banks.

As a measure of further relaxation, the RBI added that it had dispensed with the one-year lock-in period on holding infrastructure bonds.

Developing nations top global FDI index for first time in 2012: UN

Developing countries overtook their traditionally wealthier counterparts in attracting foreign direct investment for the first time last year, as industrialised nations bore the brunt of an 18 per cent plunge in FDI flows, the UN’s trade and investment think tank Unctad has said.

Last year, global foreign direct investments — when a company in one country invests for instance in production facilities or buys a business in another country — came in at $1.3 trillion, down from $1.6 trillion in 2011, Unctad’s Global Investment Trend Monitor showed.

In a dramatic shift on the global investment scale, developing countries reaped $680 billion of that, or 52 per cent of the total.

“For the first time in history, developing countries have attracted more investment than developed countries,” James Zhan, who heads UNCTAD’s investment and enterprise division, told reporters in Geneva.

The shift was largely prompted by evaporating investments in crisis-hit developed economies like the United States, European nations and Japan, which accounted for 90 per cent of the $300 billion-decline in global FDI last year, Zahn said.

“We thought we were on the way to a steady recovery, (but) the recovery has derailed,” added Zahn, who pointed out that global investment figures had turned upwards in 2010 and 2011. But amid growing market uncertainty, they fell last year to near the historic low of $1.2 trillion which came during the worst of the global financial crisis in 2009.

The US, which remains the world’s largest recipient of foreign direct investment, saw its FDI inflows slip more than 35 per cent to $147 billion, while Germany saw its net investment level plunge from $40 billion in 2011 to just $1.3 billion last year, mainly due to large divestments there.

“Developing countries also suffered from the global decline,” Zhan said, “but the decline was much more moderate.”

Asia, which raked in 59 per cent of all FDI to developing countries, saw its inflows dip 9.5 per cent, with China, the world’s second-largest recipient of such investments, registering a 3.4-per cent drop in 2012 to $120 billion.

South America and Africa meanwhile registered positive growth in FDI flows last year.

Last year’s overall drop in investments came despite the fact that the global economy grew 2.3 per cent in 2012, while worldwide trade was up 3.2 per cent.

Going forward, Unctad expects FDI flows to rise to just $1.4 trillion this year and to $1.6 trillion in 2014 — still far below the 2007 pre-crisis level of some $2.0 trillion in investments.

IMF: World Economic Growth Rate would be 3.5 percent in 2013

nternational Monetary Fund (IMF) in at update to World Economic Outlook (WEO) on 23 January 2013, projected that the global economic growth rate would be 3.5 percent in 2013. The update mentioned that the global economic growth would strengthen gradually as the limitations of the economic activities have seen a positive note with the start of the year.

Some of the major projections of IMF are

•    Global growth would reach 3.5 percent in 2013, from 3.2 percent in 2012
•    Crisis risks would narrow down but the downside risks will remain crucial
•    Main sources of growth would be the emerging markets, developing countries and the United States

Reasons that may be beneficial in betterment of the economic growth

•    The actions taken in policy making have been responsible in reducing the risk of the acute crisis situation faced in the area and the United States.
•    Actions in terms of plans taken by Japan would also be beneficial in pulling it out from a short-lived recession kind of condition.
•    The policies made by the emerging economies of the world in terms of policy making is has also shown positive outcomes with a good start in the year

The report also described that if the risks of crisis doesn’t materialize, then the expected targets of growth may be crossed and can be stronger then that is projected.

Thing that can show an impact, the growth or result into the downfall

•    Fiscal tightening, if crosses an excessive limit in United States it may have an adverse impact on the economic growth
•    Long-term stagnation of the euro-area would also have an adverse impact

Situations that hinted towards improvement in economic conditions

The economic conditions of the world had shown a positive movement in the third quarter of the 2012 and this was change brought by the performance displayed on the economic front by the emerging economies of the world as well as United States. The borrowing cost of the countries in Euro Zone was marginally better than expected but it also identified some of the weaknesses in the core Euro area. Japan was under the effect of recession in the second half of 2012, which had shown positive signs of improvement in the running year.

Forecasts and the Expected Changes

•    In terms of Euro Zone, IMF managed to downgrade its forecast as this economic situation of the region may contract a bit n 2013.
•    The report also observed slight improvement in the financial conditions of the banks and governments of the Periphery economies, occurred due to the policy actions undertaken by them but these economies has yet not improved in terms of the borrowing conditions in private sector.
•    In terms of United States, the forecast remained broadly unchanged to that of the of October 2012 WEO to 2 percent, but predicted that the support offered to the financial market would support the growth in consumption in the country
•    In terms of Japan, the near-term outlook has also remained unchanged regardless of the recession witnessed by the country in recent past and it’s expected that the monetary easing and incentive package would boost the growth in the country
•    The report projected that the developing economies and the emerging market of the world would grow by 5.5 percent in 2013 and it will remain almost same as it was predicted in October 2012 WEO.
•    In case of China, the IMF has forecasted a growth rate of 7.8 percent, 8.2 percent and 8.5 percent in 2012, 2013 and 2014 respectively. In 2011, it witnessed a growth rate of 9.3 percent.

Findings of the report and threats

•    Following the findings of the report in detail, it’s projected that the Euro Area is one of the biggest threat to the Global Economic Outlook as it poses a downside risk to the economy. If the momentum of reforms is not maintained in the Euro Area than the risk of prolonged stagnation would increase
•   To move ahead of the risk factor, adjustment programs from the periphery countries should continue and be supported by the firewall developments for prevention of the contagion and take steps towards banking union and fiscal integration, the report stated.
•   In case of United States, excessive fiscal consolidation in short term should be avoided and it should raise the debt ceiling and should move ahead to identify a credible medium-term fiscal consolidation plan, that focuses towards entitlement and tax reform.
•    In context of Japan, the report identified that it should find out a medium-term fiscal strategy as lack of such an strategy can bring risks to the stimulus package to it
•  The developing nations and emerging economies need to make fine policies to tackle the of rising domestic imbalances

The overall decrease in the forecast for the global economic growth rate is the result of the economic slowdown witnessed by the world due to the Euro Zone Crisis in existence. The Euro Zone crisis had an adverse impact on the export and import of the world, leading to great set-backs to the emerging economies of the world as well as the developed economies. Before, Euro Crisis the world also suffered from the recession that hit the United States of America in 2009. Japan also witnessed an economic slowdown after the Tsunami that hit the country in 2011 and affected the Fukushima nuclear Plant.

IMF forecasted Indian Economic Growth Rate to be 5.9 percent in 2013

The International Monetary Fund (IMF) on 23 January 2013 projected that the economic growth rate of India in 2013 would be 5.9 percent. The IMF also projected an increased growth rate of 6.4 percent for 2014 looking forward towards the gradual strengthening of the global expansion in India’s context.

In its update at the World Economic Forum (WEO), the IMF also forecasted that the global economic growth rate would be 3.5 percent, little higher than the 3.2 percent estimated earlier. As per the report of IMF, uncertainty in policy making and supply bottlenecks were one of the most visible causes that hampered the growth aspects of the economies like India and Brazil. It also stated that the scopes of easing the policy to any further extent have also gone down in these countries.

About International Monetary Fund (IMF):  

The International Monetary Fund (IMF) is an organization of 188 countries that works for fostering the global monetary cooperation, promote high employment and sustainable economic growth, facilitate international trade, secure financial stability and reduce poverty around the world. Since the end of World War II, the IMF had been playing a major role in shaping the global economy. The IMF has played a part in shaping the global economy.

Muthoot Finance wins award

Muthoot Finance Ltd has received the Golden Peacock Award for ‘Excellence in Corporate Governance’ for the year 2012 in London. The award ceremony hosted by Institute of Directors (IOD) at the London Global Convention 2012 was given on the basis of recommendations of the jury headed by Justice P.N. Bhagawati, former Chief Justice of India and member of the UN Human Rights Commission.

HDFC Bank joins hands with PUNGRAIN

HDFC Bank on September 29 joined hands with Punjab Grains Procurement Corporation Ltd (PUNGRAIN) to facilitate payment to its commission agents spread over 350 mandis in Punjab.

PUNGRAIN, in its initiative has decided to make payment to their commission agents through ‘RuPay Debit card’ and has developed the Kisan Arhtia (commission agents) information and Remittance Online Network (KAIRON) with the help of National Payment Corporation of India (NPCI).

For this project, HDFC Bank will install its Point of Sales (POS) machines in over 350 mandis to facilitate the payment to commission agents dealing in agriculture products.

It said this initiative will facilitate faster payments to them and in turn will benefit farmers.

HDFC Bank, in order to facilitate a successful implementation of this project, organised a day’s training session for nodal officers along with food inspectors of PUNGRAIN.

Government Notified FDI in Multi-Brand Retail Trading

 

Previously, Foreign Direct Investment (FDI) is prohibited in retail trading, except in single-brand product retail trading, in which FDI, up to 100%, is permitted, under the Government route, subject to specified conditions.

Now, The Government of India has reviewed the extant policy on FDI and decided to permit FDI, up to 51%, under the Government route, in Multi-Brand Retail Trading, subject to specified conditions. 

FDI is prohibited in:

(a) Lottery Business, including Government /private lottery, online lotteries, etc. (b) Gambling and Betting, including casinos etc. (c) Chit funds (d) Nidhi company (e) Trading in Transferable Development Rights (TDRs) (f) Real Estate Business or Construction of Farm Houses (g) Manufacturing of Cigars, cheroots, cigarillos and cigarettes, of tobacco or of tobacco substitutes (h) Activities / sectors not open to private sector investment e.g. Atomic Energy and Railway Transport (other than Mass Rapid Transport Systems). 

Foreign technology collaboration in any form, including licensing for franchise, trademark, brand name, management contract, is also prohibited for Lottery Business and Gambling and Betting activities.

FDI in multi brand retail trading, in all products, will be permitted, subject to some conditions, such as: 

• Fresh agricultural produce, including fruits, vegetables, flowers, grains, pulses, fresh poultry, fishery and meat products, may be unbranded. 
• Minimum amount to be brought in, as FDI, by the foreign investor, would be US $ 100 million. 
• Retail sales outlets may be set up only in cities with a population of more than 10 lakh as per 2011 Census and may also cover an area of 10 kms around the municipal/urban agglomeration limits of such cities.
• Government will have the first right to procurement of agricultural products.

The above policy is an enabling policy only and the State GovernmentslUnion Territories would be free to take their own decisions in regard to implementation of the policy. Therefore, retail sales outlets may be set up in those StateslUnion Territories which have agreed, or agree in future, to allow FDI in MBRT under this policy.

Kaushik Basu new World Bank chief economist

The World Bank on 5 September, 2012 named as its chief economist, placing a candidate from an emerging market country in a key position at the global development lender.
Basu, who was most recently chief economic adviser to the government of India, is the World Bank's second chief economist from a developing country. He replaces Justin Lin, a citizen of China, whose term expired on June 1, 2012.
Basu, who holds a Ph.D. from the London School of Economics, is on leave from his position as a professor of economics and international studies at Cornell University in New York. He previously founded the Centre for Development Economics at the Delhi School of Economics.
Emerging market countries have long pushed for more clout at the poverty-fighting World Bank and its sister institution, the International Monetary Fund.
Starting from October, Basu will serve under new World Bank President Jim Yong Kim, a Korean-American and who took the helm of the World Bank two months ago.

List of World Bank Chief Economists
● Hollis B. Chenery — 1972–1982
● Anne Osborn Krueger — 1982–1986
● Stanley Fischer — 1988–1990
● Lawrence Summers — 1991–1993
● Michael Bruno — 1993–1996
● Joseph E. Stiglitz - 1997–2000
● Nicholas Stern - 2000–2003
● François Bourguignon — 2003–2007
● Justin Yifu Lin — June 2008– June 2012
● Martin Ravallion — June 2012- (Acting Chief Economist)

NBFC-MFI norms modified

All registered non-banking financial companies (NBFCs) intending to convert themselves into non-banking financial company-micro finance institutions (NBFC-MFIs) must seek registration with immediate effect, and, in any case, not later than October 31, the Reserve Bank of India said in a notification.

The NBFCs have to maintain net-owned funds (NOF) at Rs..3 crore by March 31, 2013, and at Rs.5 crore by March 31, 2014, “failing which they must ensure that lending to the micro finance sector, that is, individuals, SHGs or JLGs, which qualify for loans from MFIs, would be restricted to 10 per cent of the total assets,” the RBI said in a notification. The RBI made some modifications in the directions issued on December 2, 2011, to NBFC-MFIs.

In order to provide encouragement to NBFCs operating in the north-eastern region, the minimum NOF is to be maintained at Rs.1 crore by March 31, 2012, and at Rs.2 crore by March 31, 2014.

General Anti Avoidance Rule (GAAR)

The General Anti Avoidance Rule (GAAR)- proposed by the then Union Finance Minister Pranab Mukherjee during the annual budget 2012-13- is anti-tax avoidance rule, drafted by the Union Government of India, which prevents tax evaders, from routing investments through tax havens like Mauritius, Luxemburg, Switzerland.
According to the draft, GAAR will come into effect from 1 April 2013. As per the guidelines, FII not opting for treaty benefits and ready to pay taxes will not come under GAAR, but those who do opt for dual taxation avoidance agreements will come under its purview.
The Union Government was forced to defer the rules until 1 April 2013, as foreign investors had expressed their reservation about the language used in the rules. Investors had maintained that the ambiguous language used in the draft of the GAAR could lead to the misuse of the rule.

 Tax Havens:

Tax havens are countries which have low tax regimes which provide individuals and business opportunities of tax avoidance or tax evasion. There are roughly 45 tax havens in the world today. In Indian context, Mauritius is considered to be the most significant tax havens or tax evading route.
In more precise words the Mauritius route can be described as a channel used by individuals and Multi National Companies to evade paying taxes in India. The tax evasion in India through this route is estimated to be in tune with 55 billion dollar, mostly attributed to the loopholes in a bilateral agreement on double taxation.

10 EU nations to push for transaction tax

Germany and nine other European Union nations will press ahead with plans to introduce a financial market transaction tax, following failed attempt for an agreement to levy it across the EU.

Finance ministers of the 27-nation EU, who met in Luxembourg on Friday, came to the conclusion that an agreement to impose the tax across the bloc will not be possible in the foreseeable future, German Finance Minister, Mr Wolfgang Schaeuble, told the media after the meeting.

Therefore, 10 nations who are willing to cooperate have decided to move forward by taking the necessary steps on the national level, and to ask the European Commission to draw up legislative proposals to introduce the tax.

Besides Germany, supporters of the tax are Austria, Belgium, France, Portugal, Slovania, Estonia, Greece, Slovakia and Spain. Under the EU rules, the proposed tax can be introduced if at least nine nations support it.

The European Commission estimates that by charging a tax between 0.01 per cent and 0.05 per cent on a broad range of finance market transactions, more than €30 billion could be raised annually.

There have been several unsuccessful attempts in the past to reach an agreement to introduce the tax in the EU as well as at the international level.

Its supporters argue that the tax is necessary to stem excessive speculations in the financial market, to reduce volatility and to involve financial institutions in sharing the costs of future financial bailouts.

The plan is vehemently opposed by Britain and Sweden, which fear that it might lead to an exodus of businesses and financial institutions from Europe and endanger growth.

White Paper on Black Money

Placed below is a link for White Paper on Black Money:

Click here to see details

3,200 MW wind energy capacity added in 2011-12

The Indian Wind Power Association has said 3200 mw of wind power generation capacity was commissioned in the country during 2011-12 in spite of tough times.

Prof. K.Kasthoori Rangaian, Chairman of the association said while the wind industry has been complaining about issues relating to grid in Tamil Nadu, the State topped with a generation capacity addition of 1087 mw capacity.

During his visit to Hyderabad to take part in National Council Meeting of IWPA on Saturday, he said investors are keen to take up wind projects in spite of difficulties, but need support.

Gujarat, Rajasthan, Maharashtra are preferred locations after Tamil Nadu. They have managed to add about 789.85 mw, 546 mw, 418 mw and 1087 mw respectively last year.

Six windy States have made rapid strides with Tamil Nadu having a capacity of 6974 MW, Gujarat following with 2942 MW, Maharashtra (2735 MW), Rajasthan (2068 MW), Karnataka (2934 MW) and Madhya Pradesh (314 MW).

The Association has requested the Andhra Pradesh Government to support them in implementing more projects by offering higher tariffs and permitting trading in Renewable Energy Certification by entering into agreements.

Review of the Economy 2011/12

Review of the Economy 2011/12

Economic growth revised down to 8.4%

The Central Statistics Office January 31 lowered the gross domestic product (GDP) growth estimate for 2010-11 to 8.4 per cent from an earlier estimated level of 8.5 per cent.

The downward revision came in the quick estimates of national income, consumption expenditure, saving and capital formation for 2010-11 released by Mr Srikant Jena, Minister of State (Independent charge) for Statistics and Programme implementation.

He said that these detailed estimates have been prepared based on the latest available data on agricultural production, industrial production, Government expenditure and also detailed data available from other source agencies.

The GDP at factor cost at constant prices in 2010-11 has registered a growth of 8.4 per cent over the previous year. The Gross National Income has registered a growth of 7.9 per cent over the previous year. The major source of growth in the GDP has been from the services sector which has grown at the rate of 9.3 per cent. The agriculture sector growth has also been impressive at 7 per cent.

The growth of the secondary sector which includes manufacturing and construction sector was 7.2 per cent. The GDP at constant prices at market prices has grown at 9.6 per cent.

The gross domestic savings at current prices in 2010-11 has been estimated at Rs 24.81 lakh crore which constituted 32.3 per cent of GDP at market prices. The savings rate in 2010-11 has declined from 2009-10.

Major reason for the decline is due to decrease in the rates of financial savings of household sector from 12.9 per cent to 10 per cent and the private corporate sector from 8.2 per cent to 7.9 per cent. The rate of savings of public sector has increased from 0.2 per cent to 1.7 per cent in 2010-11.

The Gross Domestic Capital Formation at current prices has increased from Rs 23.64 lakh crore to Rs 26.92 lakh crore in 2010-11. The rate of capital formation at current prices was 35.1 per cent in 2010-11 against 36.6 per cent during 2009-10.