DOCSLIB.ORG

Second Report the Ninth Finance Commission

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text

Load more

SECOND REPORT OF THE NINTH FINANCE COMMISSION (FOR 1990-95) H O R A R Y & documentation c e n t r e National of Educatioaal PUon.r,; and Administration. 17-B f* Aurobiudo Mar*» Ne« t,«lbi-llt0l6 d o c , No ...... CONTENTS CHAPTER PAGE I. Introduction 1 II. The Approach Of The Commission For The Period 1990-95. 3 - 6 III. Assessment Of States’ Revenue Receipts And Expenditures. 7-14 IV. Reassessment Of The Forecast Of The Central Government. 15-17 V. Devolution Of Taxes, Distribution Of Additional Excise Duties And Grant In Lieu Of Tax On Railway Passenger Fares. 18-22 VI. Financing Of Relief Expenditure. 23-26 VII. Grants-ln-Aid. 27 - 32 VIII. Merger Of Additional Duties Of Excise With Basic Duties Of Excise. 33-34 IX. Debt Position Of The States And Corrective Measures. 35 - 39 X. Concluding Observations. 40 - 42 XI. Summary Of Important Recommendations And Observations. 43-46 1. Note Of Dissent And General Observations By Shri Justice A. S. Qureshi, (Member). 47 - 56 2. Note By Majority. 57 3. Note By Shri N. K. P. Salve, Chairman, Dr. Raja J. Chelliah, Member And Shri R. Keishing, Member. 57 ANNL^Vhtf. 61 -9 1 APPF 95-133 CHAPTER I INTRODUCTION 1.1 This Finance Commission, the ninth since the 5. The Commission may suggest changes, if any, to be commencement of the Constitution, was constituted by the made in the principles governing the distribution among the President by his Order (SO No.581 (E) dated the 17th June, 1987), States of - which is reproduced below:- (a) the net proceeds in any financial year of the ”ln pursuance of the provisions of article 280 of the additional duties of excise leviable under the Constitution of India, and of the Finance Commission Additional Duties of Excise (Goods of Special (Miscellaneous Provisions) Act, 1951 (33 of 1951), the Importance) Act, 1957 (58 of 1957), and President is pleased to constitute a Finance Commission consisting of Shri N.K.P. Salve, Member of Parliament, as the (b) the grants to be made available to the States in lieu Chairman and the following four other Members, namely:- of the tax under the repealed Railway Passenger 1. Shri Justice Abdus Sattar Qureshi, Fares Tax Act, 1957 (25 of 1957). Judge, Gujarat High Court - Member 6. In making its recommendations on the various 2. Dr.Raja J. Chelliah, matters aforesaid, the Commission shall adopt the Member, Planning Commission - Member population figures of 1971 in all cases where population is regarded as a factor for determination of devolution of taxes 3. Shri Lai Thanhawla and duties and grants-in-aid. Former Chief Minister of Mizoram. • Member 4. Shri MaheshPrasad - Member Secretary 7. The Commission may examine the feasibility of the merger of additional duties of excise in lieu of sales tax with 2. The Chairman and the other Members of the basic duties of excise and evolve a suitable formula for Commission shall hold office from the date on which they allocating a part of the duties of excise in respect of the goods respectively assume office upto the 30th day of June, described in column (3) of the First Schedule to the Additional 1989. Duties of Excise (Goods of Special Importance) Act, 1957 (58 3. The Commission shall make recommendations as to of 1957) for distribution among the States, in lieu of sales the following matters:- tax. 8. The Commission may make an assessment of the (a) the distribution between the Union and the States of the debt position of the States as on the 31 st day of March, 1989 net proceeds of taxes which are to be, or may be, divided and suggest such corrective measures as deemed between them under Chapter I of Part XII of the necessary keeping in view the financial requirements of the Constitution and the allocation between the States of the Centre. The corrective measures will be with particular respective shares of such proceeds; reference to investments made in infrastructure projects and (b) the principles which should govern the grants-in-aid of shall have linkage with improvements in financial and the revenues of the States out of the Consolidated Fund managerial efficiency. of India and the sums to be paid to the States which are in need of assistance by way of grants-in-aid of their 9. The Commission may review the policy and revenues under artide 275 of the Constitution for arrangements in regard to the financing of relief expenditure purposes other than those specified in the provisos to by the States affected by natural calamities and suggest such clause(1) of that article. modifications as K considers appropriate, in the existing arrangements, having regard, among other considerations, 4. In making its recommendations, the Commission to the need for avoidance of wasteful expenditure. The shall- Commission. may examine, inter-alia,. the feasibility of (0 adopt a normative approach in assessing the establishing a national insurance fund to which the State receipts and expenditures on the revenue aocount Governments may contribute a percentage of their revenue of the States and the Centre and, in doing so, keep receipts. in view the special problems of each State, if any, 10. On the matters aforesaid, the Commission shall and the special requirements of the Centre such as matte two reports, the first report covering a period of one defence, security, debt servicing and other year commencing on the 1 st day of April, 1989, by the 30th committed expenditure or liabilities; June, 1988, and the second report covering a period of five (I) have due regard to the need for providing adequate years commencing on the 1st day of April, 1990, by the 30th incentives for better resource mobilisation and June, 1989. financial discipline as well as closer linking of expenditure and revenue-raising decisions; 11. The Commission shall indicate the basis on which it has arrived at the findings and make available the State-wise OH) take into account the need for speed, efficiency and estimates of reoeipts and expenditures.” effectiveness of Gdvernment functioning and of 1.2 On his taking over as Chief Minister of Mizoram Shri Lai delivery systems for Government'programmes; and Thanhawla resigned his membership of the Commission and his resignation was accepted by the President with effect from the 0*0 k**p in view the objective of not only balancing the 24th day of January, 1989. Shri S. Venkitaramanan, Adviser to the reoeipts and expenditure on revenue aocount of Prime Minister, was appointed as a Member of the Commission, both the States and the Centre, but also generating in place of Shri Lai Thanhawla, vide the President's Order of the aur]pluses for ca ofcal investment V IMew. 1 QftQ ShriS Venltfcaranrmnanraskmfldhkmttmh— hin 2 of the Commission on his appointment as Adviser to the Governor Sikkim and Tripura (Annexure I.6). We had programmed a visit to of Karnataka. On his appointment as Secretary, Ministry of Sikkim on 20th and 21st September, 1989. The Commission, Environment and Forests, Shri Mahesh Prasad resigned his however, could not proceed beyond Siliguri, despite all its effort, membership of the Commission and Shri K.V.R. Nair was because of inclement weather in Skkim and land-slides en route appointed the Member Secretary of the Commission from the to Gangtok. The Chief Ministers of Tripura, Mizoram and 13th July, 1989. Shri R. Keishing, former Chief Minister of Nagaland were kind enough to make it convenient to visit Delhi Manipur, assumed charge as part-time Member of the and have detailed discussions with the Commission on the 8th, Commission on Saturday the 25th November, 1989. 17th and 29th November, 1989, respectively. We found visits to the States of immense value specialty because of the open and 1.3 Shri N.K.P. Safve, Chairman, and Dr. Raja J. Chelliah, free discussions with the State Chief Ministers, their Cabinet Member, continued to render part-time service. Shri Justice A.S. colleagues and officials. During these visits the State Qureshi, Member, rendered part-time service upto the 3rd Governments also arranged some field visits and we could avail August, 1989, whereafter he became a full-time Member. of the opportunity to gain first hand knowledge of the ground 1.4 Paragraph 10 of the Order dated 17th June, 1987, conditions and other factors affecting delivery of social and required the Commission to make two reports, the first report economic services and consequently expenditure needs of the covering a period of one year commencing on the 1 st day of April, State. These discussions and visits enabled us to have a better 1989, and the second report covering a period of five years understanding and appreciation of the problems of the States. commencing on the 1 st day of April, 1990. The President having During these visits to the States, the Commission also had some accepted our request to extend the date for its submission to 31 st very useful meetings with Leaders of the Opposition, Members 01 July, 1988, our first report for 1989-90 was presented to the Parliament, Members of State Legislatures, representativesfrom President on 29th July, 1988. Although the work on both the Chambers of Commerce and Industry, Associations and reports was taken up concurrently, it was possible to attend to the Federations of State Employees, economists and other •minent major issues and undertake the detailed exercises relating to the personalities. We are grateful to all the State Governments we second report only after the presentation of the first report. A visited for having made meticulous arrangements for our visits review of the progress of work made by us in April/May, 1989, and for the cooperation extended by them in full measure to the convinced us that it would not be possible to submit the second Commission and its secretariat.
Recommended publications
  • Chapter 1 INTRODUCTION 1.1 the Thirteenth Finance Commission

    Chapter 1 INTRODUCTION 1.1 the Thirteenth Finance Commission

    1 Chapter 1 INTRODUCTION 1.1 The Thirteenth Finance Commission has the unique opportunity to review and draw inferences from nearly six decades of federalism in public finance management of the nation. Based on such inferences, a much needed course correction can be initiated, reversing a trend that has been eroding the very concept of fiscal federalism. Government of Kerala would earnestly plead for such a focus in the work of this Commission. 1.2 Articles of the Constitution between 268 and 275 have designed a well-structured system whereby States get benefit from the Centre’s taxation power. The purpose is clear from the wording of Article 275 which is the final residual Article in this structure. Aid to the revenues of States is what the makers of Constitution had in mind. This really gives Finance Commission the authority to deal with the entire area where States’ revenues are applied – not just one part like non-plan revenue account expenditure. But Commissions chose to confine themselves to that area (with only one exception in recent times – Second report of the Ninth Finance Commission covering the period 1990- 95). Over the years, somehow it came to be accepted that Finance Commissions’ main task is to try and balance the non-plan revenue account of Stat es. 1.3 Whenever Commissions chose (or were asked) to look into other aspects, it was either for providing supplementary provisions for developmental expenditure (like special problem grants) or admonish States and guide them out of what was perceived to be their fiscal imprudence. The administration of such condition based grants and debt relief schemes was entrusted with Central Government Ministries.
  • FUNDS RECOMMENDED by 12Th FINANCE COMMISSION and RELEASED by GOVT

    FUNDS RECOMMENDED by 12Th FINANCE COMMISSION and RELEASED by GOVT

    FUNDS RECOMMENDED BY 12th FINANCE COMMISSION AND RELEASED BY GOVT. OF INDIA IN DIFFERENT YEARS (Rs. in Crores) Released by Recommendation Released by Recommendation Released by Recommendation Recommendation Released Recommendation Released by Recommendation Released by SL PURPOSES / SCHEMES GOI by of TFC GOI of TFC GOI of TFC of TFC by GOI of TFC GOI of TFC GOI (31.12.07) 2005-06 2006-07 2007-08 2008-09 2009-10 2005-10 1 Non-plan Revenue Deficit Grant. 488.04 488.04 0.00 0.00* 0.00 0.00 0.00 0.00 0.00 0.00 488.04 488.04 2 Central Share of Calamity Relief 226.16 226.16 232.68 232.68 239.53 239.53 246.73 324.50 254.27 0.00 1199.37 1022.87 3 Top up Grant for Education Sector 53.49 53.46 58.57 58.57 64.13 64.13 70.22 35.11 76.89 0.00 323.30 211.27 4 Top up Grant for Health Sector 31.22 31.22 34.81 34.81 38.81 19.41 43.28 21.64 48.25 0.00 196.37 107.08 5 Maintenance of Roads & Bridges. 0.00 0.00 368.77 368.77 368.77 368.77 368.77 368.77 368.77 0.00 1475.08 1106.31 6 Maintenance of Public Buildings. 0.00 0.00 97.28 97.28 97.28 97.28 97.29 48.65 97.29 0.00 389.14 243.21 7 Maintenance of Forests. 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00 0.00 75.00 60.00 8 Heritage Conservation 0.00 0.00 12.50 12.50 12.50 12.50 12.50 9.37 12.50 0.00 50.00 34.37 9 State Specific Need (a+b) 0.00 0.00 42.50 40.50 42.50 3.75 42.50 46.44 42.50 0.00 170.00 131.44 a) Chilika Lake 0.00 0.00 7.50 7.50 7.50 3.75 7.50 11.44 7.50 0.00 30.00 26.44 b)Sewerage System for Bhubaneswar 0.00 0.00 35.00 33.00 35.00 0.00 35.00 35.00 35.00 0.00 140.00 105.00 10 Grants for local bodies.
  • Political Economy of India's Fiscal and Financial Reform*

    Political Economy of India's Fiscal and Financial Reform*

    Working Paper No. 105 Political Economy of India’s Fiscal and Financial Reform by John Echeverri-Gent* August 2001 Stanford University John A. and Cynthia Fry Gunn Building 366 Galvez Street | Stanford, CA | 94305-6015 * Associate Professor, Department of Government and Foreign Affairs, University of Virginia 1 Although economic liberalization may involve curtailing state economic intervention, it does not diminish the state’s importance in economic development. In addition to its crucial role in maintaining macroeconomic stability, the state continues to play a vital, if more subtle, role in creating incentives that shape economic activity. States create these incentives in a variety of ways including their authorization of property rights and market microstructures, their creation of regulatory agencies, and the manner in which they structure fiscal federalism. While the incentives established by the state have pervasive economic consequences, they are created and re-created through political processes, and politics is a key factor in explaining the extent to which state institutions promote efficient and equitable behavior in markets. India has experienced two important changes that fundamentally have shaped the course of its economic reform. India’s party system has been transformed from a single party dominant system into a distinctive form of coalitional politics where single-state parties play a pivotal role in making and breaking governments. At the same time economic liberalization has progressively curtailed central government dirigisme and increased the autonomy of market institutions, private sector actors, and state governments. In this essay I will analyze how these changes have shaped the politics of fiscal and financial sector reform.
  • Chapter 3.Pmd

    Chapter 3.Pmd

    CHAPTER 3 Issues and Approach Introduction considerations in mind while undertaking its core task. Thus, the Thirteenth Finance Commission 3.1 The overall task of the Finance has to take account of: Commission is to discharge the mandate laid down in articles 270, 275 and 280 of the i) The need to balance the receipts and Constitution, consistent with the principles of expenditure on revenue account of all the federal finance, taking into account the current states and the Union and generating and likely future macroeconomic and fiscal surpluses for capital investment. scenarios, so as to secure fiscal stability and ii) The impact of the proposed adequate resource availability for the Centre, the states and the local bodies. implementation of the Goods and Services Tax (GST) from 1 April 2010, including its 3.2 The Presidential orders that provide the impact on the country’s foreign trade. Terms of Reference (ToR) for the Thirteenth Finance Commission can be viewed as setting iii) The need to improve the quality of public the Commission three different types of tasks. expenditure. The first or ‘core’ task of the Commission is to iv) The need to manage ecology, environment recommend distribution, between the Union and climate change consistent with and the states, of the net proceeds of taxes to sustainable development. be divided between them under Chapter I, Part XII of the Constitution of India, commonly v) The need to ensure commercial viability termed as the ‘divisible pool’. Second, the of public sector and departmental Commission has also to recommend the undertakings, as also of irrigation and allocation between the states of such proceeds.
  • Twelfth Finance Commission (2005-10)

    Twelfth Finance Commission (2005-10)

    Report of the TWELFTH FINANCE COMMISSION (2005-10) November, 2004 Report of the TWELFTH FINANCE COMMISSION (2005-10) November, 2004 Chapter 1 Introduction Appointment of the Twelfth Finance part-time member with effect from 1st July Commission 2004. The relevant notifications are at 1.1 The appointment of a finance annexures 1.1, 1.2 and 1.3. commission by the President is provided for 1.2 The Commission was originally asked under article 280 of the Constitution of to make its report available by the 31st July India. The first such commission was 2004 covering a period of five years constituted on November 19, 1951. The commencing on the 1st April 2005. eleven finance commissions, which have Subsequently, due to disruption of normal preceded the present one, have, through activities on account of preponement of their recommendations, given a definitive parliamentary election, the President, shape to fiscal federalism in our country. through his order dated 1st July 2004, The present finance commission, which is extended the tenure of the Commission up the twelfth, was appointed by the President to 31st December 2004, but required the of India on 1st November, 2002 under the report to be made available by chairmanship of Dr. C. Rangarajan, the then 30th November 2004 (notification at Governor of Andhra Pradesh. The President annexure 1.4). also appointed two full-time members, namely, Shri T. R. Prasad, IAS (retd.), Terms of Reference (TOR) former Cabinet Secretary, Government of 1.3 The President vide the notification India and Prof. D. K. Srivastava of National dated 1st November, 2002 (annexure 1.1) Institute of Public Finance & Policy mandated the Commission to do the (NIPFP) and one part-time member, namely, following: Shri Som Pal, Member, Planning Commission.
  • Fifth Delhi Finance Commission 2016-2021

    Fifth Delhi Finance Commission 2016-2021

    Fifth Delhi Finance Commission 2016-2021 Report October 2017 Contents Glossary v List of Annexures viii Chapter 1: Summary of Major Recommendations 1 Chapter 2: Introduction 19 Chapter 3: Issues and Approach 25 Chapter 4: Recommendations of Previous Finance Commissions 39 Chapter 5: Finances of Government of Delhi 53 Chapter 6: Receipts of the Municipalities 87 Chapter 7: Expenditure of the Municipalities 169 Chapter 8: Debt Liabilities of the Municipalities 251 Chapter 9: Assessment of the Finances of the Municipalities and Scheme of Devolution 257 Chapter 10: Accountability, Audit and Oversight 283 Chapter 11: Governance Reforms and Capacity Enhancement 293 Chapter 12: Best Practices of the Municipalities 307 Annexures 315 References 375 iii GLOSSARY AAI Airports Authority of India CGST Central Goods & Services Tax ABAS Accrual Based Accounting System CNG Compressed Natural Gas ACA Additional Central Assistance CPC Central Pay Commission AGR Annual Growth Rate CPI Consumer Price Index AIILSG All India Institute of Local Self Government CPSUs Central Public Sector Undertakings AMRUT Atal Mission for Rejuvenation and Urban CR Cycle Rickshaw Transformation CRF Central Road Fund ANM Auxiliary Nurse cum Midwife CSE Conservancy and Sanitation Engineer Annex Annexure CSO Central Statistics Office ARD Administrative Reforms Department CST Central Sales Tax ARMA Auto Regressive Moving Average CTC Community Toilet Complex ARV Annual Rental Value DCA Deputy Controller of Accounts ASHA Accredited Social Health Activist DCB Delhi Cantonment Board
  • Weekly GK Banking Capsule 2019 1

    Weekly GK Banking Capsule 2019 1

    Weekly GK Banking Capsule 2019 1 | P a g e Weekly GK Banking Capsule 2019 WEEKLY GENERAL KNOWLEDGE BANKING & FINANCE CAPSULE (3rd to 9th March 2019) Banking News Intelligence and other technological capabilities of Hitachi AIIB approves loan for Andhra Pradesh Rural Roads Project. to SBI Payment Services. A loan agreement of USD 455 million was signed India and World Bank Signs Loan Agreement. between the Asian Infrastructure Investment Bank (AIIB) The Government of India, the State Government of and the Government of India for financing the Andhra Chhattisgarh and the World Bank signed a $25.2 Million Pradesh Rural Roads Projects. Loan Agreement to support the State’s Reforms in These projects will connect 3,300 habitations with a Expenditure Management. population of more than 250, and benefit around 2 The Chhattisgarh Public Financial Management and million people. Accountability Program, which is the First Bank-Financed It is the third project in Andhra Pradesh signed by the State-Level Project in Chhattisgarh in nearly a decade, AIIB after two projects in Power Sector and Water will also help the State strengthen its Direct Benefit Sector. Transfer (DBT) and Tax Administration Systems. This support will cover Expenditure Planning, Investment Asian Infrastructure Investment Bank Management, Budget Execution, Public Procurement, President: Jin Liquin and Accountability. Headquarters: Beijing, China India signs loan agreement with World Bank for Uttarakhand Disaster Recovery Project. SBI and Hitachi jointly launched digital payments platform. India has signed a loan agreement with the World Bank for State Bank of India (SBI) and Hitachi Payment Services Pvt 96 Million US dollars for additional financing of Ltd, a wholly-owned subsidiary of Hitachi Ltd has launched Uttarakhand Disaster Recovery Project.
  • VIDHI CENTRE for LEGAL POLICY Fiscal Federalism in India: Some

    VIDHI CENTRE for LEGAL POLICY Fiscal Federalism in India: Some

    Draft for Delivery VIDHI CENTRE FOR LEGAL POLICY New Delhi 23 Sept. 2015 Fiscal Federalism in India: Some Reflections Y.V. Reddy1 Friends, I had a brief exposure to the expertise available with Vidhi Centre for Legal Policy in connection with the work relating to the 14th Finance Commission. I was impressed with their professionalism and commitment. I, therefore, felt that my admiration for their valuable work should be demonstrated by my participating in this event, to release the Briefing Book on Cooperative Federalism. This book is valuable because it addresses specific issues of contemporary relevance, and suggests approaches around which discussions may take place, and way forward contemplated. This book, therefore, should be of interest to a broad range of policy-makers, academics and jurists. The book gives a succinct account of the concept of cooperative fiscal federalism currently under intense debate. Theory of fiscal federalism and its practice in India is one but important element of cooperative federalism and it is well documented in great detail by many eminent scholars. In particular, my friend, Professor M. Govinda Rao is an acknowledged authority on the subject. I cannot add anything more today to what has been written by him on the subject. One of the reasons for considerable contemporary debate on the subject of this book is the report of the 14th Finance Commission, and perhaps, I am expected to dwell on it. Having been a co-author of the report, it may not be appropriate for me to explain, elaborate or defend, what has been stated. So, I consulted the organizers on what I should do.
  • Public Finance and Policy

    Public Finance and Policy

    Introduction to the Institute 39TH ANNUAL REPORT 2014-2015 NAT ONAL OF UBLIC FINANCE I NSTITUTE POLICY & page | 1 NIPFP Annual Report 2014-2015 ANNUAL REPORT APRIL 1ST, 2014 – MARCH 31ST, 2015 PRINTED AND PUBLISHED BY: THE SECRETARY NATIONAL INSTITUTE OF PUBLIC FINANCE AND POLICY AN AUTONOMOUS RESEARCH INSTITUTE UNDER THE MINISTRY OF FINANCE, GOVERNMENT OF INDIA 18/2, SATSANG VIHAR Marg, SPECIAL INSTITUTIONAL AREA (NEAR JNU), NEW DELHI 110067 TEL.: 011 26569303, 26569780, 26569784 FAX: 91-11-26852548 EMAIL: [email protected] WEBSITE: www.nipfp.org.in COMPILED, CONCEPT, DESIGN & EDITED BY: SAMREEN BADR COVER DESIGN, TEXT DESIGN ARTWORKS & PRINTED BY: VAP EMAIL: [email protected] TEL: 09811285510 NATIONAL INSTITUTE OF PUBLIC FINANCE AND POLICY, NEW DELHI PROVIDING POLICY ADVICE SINCE 1976 2 | page Introduction to the Institute CONTENTS Introduction to the Institute5 Annexures List of Studies 2014-2015i Research Activities17 ii NIPFP Working Paper Seriesv Fiscal/Taxation-related Studies of Central and ii Internal Seminar Series v State Government19 iii Macroeconomic and Financial Sector Policy List of Governing Body Members as on 31.3.2015i Studies20 x List of Priced Publicationsx State Development Studies 24 iv Published Material of NIPFP Facultyx Other Studies28 ix New Projects initiated30 List of Staff Members as on 31.3.2015x Workshops, Seminars, Meetings and xv Conferences3 List of Sponsoring, Corporate, Permanent and 1 Ordinary Members as on 31.3.2015x Training Programmes38 xxi Finance and Accountsx NIPFP Publications (2014-2015)39
  • Ajai Chopra and Charles Collyns Long-Term Growth I Response to the 1991 Crisis I Results of Adjustment I Fiscal Initiatives 2 Structural Reforms 2 the Road Ahead 3

    Ajai Chopra and Charles Collyns Long-Term Growth I Response to the 1991 Crisis I Results of Adjustment I Fiscal Initiatives 2 Structural Reforms 2 the Road Ahead 3

    OCCASIO NAL PAPE R 134 India: Economic Reform and Growth Ajai Chopra, Charles Collyns, Richard Hemming, and Karen Parker with Woosik Chu and Oliver Fratzscher INTERNAT IONAL MONETARY FUND Washington DC December 1995 ©International Monetary Fund. Not for Redistribution © 1995 International Monetary Fund Cataloging-in-Publication Data India: economic reform and growth/Ajai Chopra ... [et a1.].­ Washington, D.C. :International Monetary Fund, 1995 p. em.- (Occasional Paper, ISSN 0251-6365; 134) Includes bibliographical references. ISBN l-55775-539-6 l. India - Economic policy- 1980- . 2. Structural adjustment (Economic policy)- India. 3.Investments- India. I.Chopra, Ajai. II.Series: Occasional paper (InternationalMonetary Fund) ; no. 134. HC 435.2.163 1995 Price: US$15.00 (US$12.00 to full-time faculty members and students at universities and colleges) Please send orders to: International Monetary Fund, Publication Services 700 19th Street, N.W., Washington, D.C. 20431, U.S.A. Tel.: (202) 623-7430 Telefax: (202) 623-7201 Internet: [email protected] recycled paper ©International Monetary Fund. Not for Redistribution Contents Page Preface vii Abbreviations ix Overview Ajai Chopra and Charles Collyns Long-Term Growth I Response to the 1991 Crisis I Results of Adjustment I Fiscal Initiatives 2 Structural Reforms 2 The Road Ahead 3 II long-Term GrowthTrends 4 Ajai Chopra Output, Investment, and Macroeconomic Conditions 4 Education, Labor, Employment, and Poverty 7 Growth, Accumulation, and Productivity 9 Results of India-Specific Studies 13
  • The Post-Reform Performance of the Manufacturing Sector in India*

    The Post-Reform Performance of the Manufacturing Sector in India*

    Manufacturing Sector Post-reform Performance in India The Post-reform Performance of the Manufacturing Sector in India* Kaliappa Kalirajan Abstract Foundation for Advanced Manufacturing played an important part in sustaining India’s eco- Studies on International Development nomic growth in the 1970s and 1980s. The economic reforms of National Graduate Institute for the early 1990s did not lead to sustained growth of the manufac- Policy Studies (FASID/GRIPS) 2–2, Wakamatsucho turing sector. After an acceleration in the mid-1990s, growth Shinjuku-Ku slowed in the decade’s second half. The analysis presented in this Tokyo 162–8677 paper reveals that manufacturing-sector growth in the post- Japan [email protected] reform period is “input driven” rather than “efficiency driven,” with significant levels of technical inefficiency. The paper advocates Shashanka Bhide policies to improve production efficiency by encouraging invest- National Council of Applied Economic Research ment in research and development, technical training for workers, 11 I.P. Estate and technology-aided managerial processes. New Delhi 110002 India [email protected] and Institute for Social and Economic Change Nagarabhavi 1. The setting: Growth and competitiveness of India’s Bangalore 560072 India manufacturing sector India’s nonagricultural sectors produced 75 percent of the overall output of the country’s economy in 1993–2002. Of these nonagricultural sectors, manufacturing accounted for 23 percent of total GDP; the electricity, water supply and gas, mining, and construction subsectors accounted for 9 percent; and the service sector, comprising all other subsectors, accounted for the remaining 43 percent. Thus, manufacturing, when considered a single group of activi- ties, is a major sector in the Indian economy.
  • Speech of Dr. Manmohan Singh, Minister of Finance, Introducing the Budget for the Year 1995-96*

    Speech of Dr. Manmohan Singh, Minister of Finance, Introducing the Budget for the Year 1995-96*

    SPEECH OF DR. MANMOHAN SINGH, MINISTER OF FINANCE, INTRODUCING THE BUDGET FOR THE YEAR 1995-96* Highlights — Proposal to establish Rural Infrastructural Development Fund — Providing Rural Credit Facilities to SCs and STs — Proposal to support Village Industries — Extending Financial Assistance to Small Scale Industries — Proposal to set up North Eastern Development Bank (NEDB) — Proposal to launch a new Anti-poverty Scheme — Scheme to promote Social Insurance — Proposal to establish an Independent Regulatory Authority for the Insurance Industry — Proposal for Tax Holiday — Implementation of Integrated Urban Poverty Eradication Programme Sir, I rise to present the Budget for 1995-96. Four years have passed since our Government, under the leadership of Prime Minister Shri P.V. Narasimha Rao, took office in the midst of an Budget, 1995-96 Total Receipts — Rs. 1,67,151 crore Total Expenditure — Rs. 1,72,151 crore Deficit — Rs. 5,000 crore * Lok Sabha Debate, 15.3.1995, cc. 204-228. 1401 1402 FINANCE MINISTERS’ BUDGET SPEECHES unprecedented economic crisis. Our immediate task was to save the nation from a relentless slide into the abyss of falling production, soaring inflation and deepening poverty. We dealt swiftly with the immediate crisis and we also worked towards a broader objective of shifting the economy on to a path of rapid, employment-generating growth. Our aim was to raise India to her rightful place in the comity of nations. Sometimes, in the heat of political debate, we lose sight of what has already been achieved. Let me take a few minutes to outline how far we have come since those grim days of 1991: • The growth of our economy had fallen to less than one per cent in 1991-92.