General Studies Paper I: New Book

http://www.flipkart.com/general-studies-civil-services-preliminary-examination-paper-1-2014-1st/p/itmdpf9fynss9rgc?pid=9788192679600&ref=d8372227-68a0-4a75-b63b-75ca4eb9b320&srno=t_4&otracker=from-search&query=access+publishing

Cover page of my latest book on IAS Prelims General Studies in English--now available on Flipkart and at leading bookstores all over India soon. In Kolkata, one may contact 'Swastik' bookstore on College Street (+919051874376) to buy this book at a whooping 40% discount.

Click here to buy this book:

http://www.flipkart.com/general-studies-civil-services-preliminary-examination-paper-1-2014-1st/p/itmdpf9fynss9rgc?pid=9788192679600&otracker=from-search&srno=t_3&query=general+studies+access+publishing&ref=d8a169c4-3455-411b-8983-64edb634454c

or call +919051874376 (Swastik Book Stall, College Street, Kolkata)

Cover Page of my latest book on IAS Prelims General Studies in Hindi published by Access Publishing, New Delhi--available on Flipkart and at leading bookstores all over India. Leading experts in different subjects are co-authors of this book. Price: Rs.1265. For details, visit http://accesspublishing.in/

Cover Page of my latest book on IAS Prelims General Studies in English published by Access Publishing, New Delhi--available on Flipkart and Amazon.in and at leading bookstores all over India. Leading experts in different subjects are co-authors of this book. Price: Rs.1265. For details, visit http://accesspublishing.in/

Economics, Development Economics and Indian Economics for Civil Services Main Exam, 2013

Economics, Development Economics and Indian Economics for Civil Services Main Exam, 2013

·         Paper-V

General Studies -II (Governance, Constitution, Polity, Social Justice and International relations) of 250 marks which may include following topics:

·         Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

·         Development processes and the development industry- the role of NGOs, SHGs, various groups and associations, donors, charities, institutional and other stakeholders

·         Welfare schemes for vulnerable sections of the population by the Centre and States and the performance of these schemes; mechanisms, laws, institutions and Bodies constituted for the protection and betterment of these vulnerable sections.

·         Issues relating to development and management of Social Sector/Services relating to Health, Education, Human Resources.

·         Issues relating to poverty and hunger.

·         Paper-VI

General Studies -III (Technology, Economic Development, Bio-diversity, Environment, Security and Disaster Management) of 250 marks which may include following topics:

·         Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.

·         Inclusive growth and issues arising from it.

·         Government Budgeting.

·         Issues related to direct and indirect farm subsidies and minimum support prices; Public Distribution System- objectives, functioning, limitations, revamping; issues of buffer stocks and food security; Technology missions; economics of animal-rearing.

·         Food processing and related industries in India- scope and significance, location, upstream and downstream requirements, supply chain management.

·         Land reforms in India.

·         Effects of liberalization on the economy, changes in industrial policy and their effects on industrial growth.

·         Infrastructure: Energy, Ports, Roads, Airports, Railways etc.

·         Investment models.

My course is available online.

http://www.wiziq.com/courses/course-detail.aspx?cInfo=MP7Z4Xew36%2bmqNwJe8ZajLTjabcZo%2bTGwvCoh33YRP4oi53HCIOX1RKX1jJJ70cYgUrs4cYZ6wlcY5KKTWpg9pt9GsgOictavgUq86nP0d8cNRX0YFvdkSt5VASAxK0AN4L0szVVJHA%3d

Follow me on WizIQ

IAS Study Room

             

               

IAS Study Room-Join Through Wiziq

http://www.wiziq.com/course/21874-economic-and-social-development-for-upsc-ias-mains

Important Announcement

 IAS Study Room is now available on WizIQ: A Portal for Online Education

Now you can join IAS Study Room through online education portal  http://www.wiziq.com/iasstudyroom. Prepare Economics for IAS General Studies (Prelims and Mains) by joining online educational portal http://www.wiziq.com/iasstudyroom.

About the online educator:
Economics Professor; Ex-Civil Servant (Ex-Magistrate); Stood Fourth in the University with a First Class; NET Qualified; Guest Professor, Institute for Civil Services Aspirants; Author of a Manual for IAS Prelims (in English and Hindi) (forthcoming); Prize winner in CSR Essay Competition; Author of undergraduate text book; Teaching Civil Service Aspirants for the last 10 years;Edited one magazine for competitive examination;Providing special training for interview for written-test qualified candidates at different institutes; Author of a IAS Mains General Studies Economics (in English and Hindi) (forthcoming), Has own Blog for IAS aspirants: iasstudymat.blogspot.com (nearly 23000 visitors so far)  

CIVIL SERVICES (MAIN) EXAMINATION, 2012: Final Results

CIVIL SERVICES (MAIN) EXAMINATION, 2012 results are out.

TOP position has been taken by Female candidate, Ms. Haritha V. Kumar (Roll No.075502). She has done B.Tech (E&C) from Kerala University. This is her 4th attempt.

2nd rank is of Shri V. Sriram (Roll No.494891). He has done MBBS from Kerala University. This is his 2nd Attempt.

3rd position is bagged by another Female candidate Ms. Stuti Charan (Roll No.038970). She has done B.Sc from Jodhpur University and PG Diploma in Personnel & Marketing Management from IIPM, Delhi.This is her 3rd attempt.

TOP position in GENERAL, ST and SC categories have been secured by Female candidates. Amongst top 25 candidates there are 13 Male and 12 Female candidates.

The result also showcases the pan-India distribution of successful candidates of this Examination. Amongst the top 25 candidates, there are candidates claiming domicile from as many as 12 States/UTs i.e. Andhra Pradesh, Bihar, Chandigarh, Delhi, Haryana, Jammu & Kashmir, Karnataka, Kerala, Maharashtra, Rajasthan, Tamilnadu, & Uttar Pradesh.

The family background of top 25 candidates shows diverse representation from all walks of life with their parents being Farmer, Teacher, Businessman, Govt. servant, Doctor, Advocate, Professor & Civil servant.

Amongst top 25 candidates 6 have made to the merit list in their 1st attempt; 9 in 2nd attempt; 8 in 3rd attempt; and 01 each in 4th & 6th attempts. As many as 04 have already been recommended to services other than IAS on the basis of Civil Services Examinations of previous years.

Of the top 25 candidates - 12 appeared from Delhi; 4 from Thiruvanathapuram, 2 each from Chennai & Hyderabad; and 1 each from Jammu, Mumbai, Jaipur, Chandigarh and Allahabad Centres.

Final cut off marks in UPSC Civil Services Exams 2011

Information sought by someone through RTI and provided by UPSC regarding the final cut off, marks obtained by last person per category in 2011 Civil Services Exams.

Category	Marks obtained
	CSP 2011 (out of 400)	CS( Main) (out of 2000)	Finally recommended (out of 2300)
GEN	198	842	1090
OBCs	175	822	1059
SC	165	807	1023
ST	161	798	1009
O H	135	767	1008
V I	124	767	1047
H I	096	663	911

Civil Services General Studies Manual for Preliminary Examination, 2014 Edition

 New IAS General Studies Preliminary Manual  being published by Access Publishing, New Delhi will be out in June/July, 2013. An editorial board comprising experts in this field is contributing and editing different sections. The section relating to Economics, named 'Economic and Social Development' of India is contributed by S.Maitra. This manual will be helpful for State Civil Services Exams also. The manual will be in both English and Hindi. It will be available all over India  through book shops and online portals. Watch out for further announcement in leading national dailies. Watch out this blog for sample chapters of the new book.

ANNOUNCEMENT: NEW IAS GENERAL STUDIES MANUAL IN ENGLISH AND HINDI

A all new IAS General Studies Manual from a very reputed publisher of Delhi is going to hit the market in a couple of weeks. The contribution from my part relates to the section 'Economic and Social Development' of India. The manual will be in both English and Hindi. Its arrival in the market will be announced in leading national dailies. It will be available all over India  through book shops and online portals.

New Pattern of Civil Services Exam 2013

Section-I
PLAN OF EXAMINATION
The competitive examination comprises two successive stages:
(i) Civil Services (Preliminary) Examinations (Objective Type) for the selection of candidates for Main Examination; and
(ii) Civil Services (Main) Examination (Written and Interview) for the selection of candidates for the various services and posts.
2. The Preliminary Examination will consist of two papers of Objective type (multiple choice questions) and carry a maximum of 400 marks in the subjects set out in subsection (A) of Section-II. This examination is meant to serve as a screening test only; the marks obtained in the Preliminary Examination by the candidates who are declared qualified for admission to the Main Examination will not be counted for determining their final order of merit. The number of candidates to be admitted to the Main Examination will be about twelve to thirteen times the total approximate number of vacancies to be filled in the year in the various Services and Posts. Only those candidates who are declared by the Commission to have qualified in the Preliminary Examination in the year will be eligible for admission to the Main Examination of that year
provided they are otherwise eligible for admission to the Main Examination.
3. Candidates who obtain such minimum qualifying marks in the written part of the Main Examination as may be fixed by the Commission at their discretion, shall be summoned by them for interview for a Personality Test vide sub-section ‘C’ of Section-II. Marks obtained in the papers will be counted for ranking. The number of candidates to be summoned for interview will be about twice the number of vacancies to be filled.
Marks thus obtained by the candidates in the Main Examination (written part as well as interview) would determine their final ranking. Candidates will be allotted to the various Services keeping in view their ranks in the examination and the preferences expressed by them for the various Services and Posts.

Section-II
Scheme and subjects for the Preliminary and Main Examinations
A. Preliminary Examination
The Examination shall comprise two compulsory papers of 200 marks each.
NOTE (i) Both the question papers will be of the objective type (multiple choice questions).
(ii) The question papers will be set both in Hindi and English. However, questions relating to English Language Comprehension skills of Class X level will be tested through passages from English Language only without providing Hindi translation thereof in the question paper.
(iii) Details of the syllabi are indicated in Part A of Section III.
(iv) Each paper will be of two hours duration. Blind candidates will however; be allowed an extra time of twenty minutes at each paper.

Section-III

SYLLABI FOR THE EXAMINATION

PART-A

PRELIMINARY EXAMINATION

The Examination shall comprise two compulsory papers of 200 marks each.

Paper I - (200 marks) Duration : Two hours

Current events of national and international importance.

History of India and Indian National Movement.

Indian and World Geography - Physical, Social, Economic Geography of India and the World.

Indian Polity and Governance - Constitution, Political System, Panchayati Raj, Public Policy, Rights

Issues, etc.

Economic and Social Development Sustainable Development, Poverty, Inclusion, Demographics,

Social Sector initiatives, etc.

General issues on Environmental Ecology, Bio-diversity and Climate Change - that do not require

subject specialization.

General Science.

Paper II- (200 marks) Duration: Two hours

Comprehension

Interpersonal skills including communication skills;

Logical reasoning and analytical ability

Decision-making and problem-solving

General mental ability

Basic numeracy (numbers and their relations, orders of magnitude, etc.) (Class X level), Data

interpretation (charts, graphs, tables, data sufficiency etc. - Class X level)

English Language Comprehension skills (Class X level).

Note 1 : Questions relating to English Language Comprehension skills of Class X level (last item in the Syllabus

of PaperII) will be tested through passages from English language only without providing Hindi translation

thereof in the question paper.

Note 2 : The questions will be of multiple choice, objective type.

B. Main Examination
The written examination will consist of the following papers:
Paper-I
Section 1 Essay 200 Marks
Section 2 English Comprehension
& English Précis 100 Marks
(Of Matriculation/ Xth standard
level)
Paper-II
General Studies–I 250Marks
(Indian Heritage and Culture,
History and Geography of the World
and Society)
Paper-III
General Studies –II 250 Marks
(Governance, Constitution,
Polity, Social Justice and
International relations)
Paper-IV
General Studies –III 250 Marks
(Technology, Economic Development,
Bio-diversity, Environment, Security
and Disaster Management)
Paper-V
General Studies –IV 250 Marks
(Ethics, Integrity and Aptitude)
Paper-VI
Optional Subject – Paper 1 250 Marks
Paper-VII
Optional Subject – Paper 2 250 Marks
Sub Total (Written test) 1800 Marks
Personality Test 275 Marks.
Grand Total 2075 Marks
{Candidates may choose any optional subject from amongst the list of subjects given in para 2 below (Group 1).
However, a candidate can opt for the literatures of a language, indicated in Group-2 below para 2, as an optional
subject, only if the candidate has graduated in the literature of that particular language as the main subject}.
 

New Handbook of Prelims General Studies

Very soon all of my lectures will be published in a new Handbook of IAS Prelims General Studies coming out from Delhi. For further announcement keep on watching this Blog.

IAS General Studies Introductory Lecture by S.Maitra

2011 gs indian econ handout 1 from smaitra123

EMERGING GLOBAL ECONOMIC SITUATION: ITS IMPACT ON INDIA’S TRADE

Global Growth and Trade Situation: Though there was some recovery in the global economy after the 2008 crisis, the developments in US and Euro area have  worsened the global economic outlook.  The world economy has been receiving shocks at regular intervals. Accordingly, GDP growth of global economy is revised downwards to 3.3 percent in 2012 and 3.6 percent in 2013 which is down by 0.2 and 0.3   percentage points  respectively as per October 2012 projections compared to the July 2012 projections. IMF has also reduced its earlier projections for world trade in goods and services to 3.2 percent for 2012 and to 4.5 percent for 2013, drastically down by 0.6 and 0.7 percentage points respectively. There is a drastic fall in import and export projections for emerging and developing economies by 0.8 and 1.7 percentage points respectively for 2012, compared to the marginal fall for advanced economies by 0.2 and 0.1 percentage points respectively. Like the month wise export growth rates, the month-wise import growth rates of the different trading partners of India which affects the demand for India‟s exports are also not encouraging.
After the 2008 crisis, many countries could reach the pre-crisis levels of exports, but few countries could reach the pre-crisis trends of export growth. India‟s export performance has been much better than many other countries on the export front as it could not only surpass pre-crisis levels but also reach precrisis trends and maintain it for a fairly long time in the post-crisis period. But in the last few months India‟s export growth has also started to decelerate.
Indian Economic and Trade Situation: The overall growth rate of the Indian economy was 6.5 percent in 2011-12 as against 8.4 percent achieved in each of the previous two years. In 2012-13 Q1, growth was at 5.5 percent compared to 8.0 percent in 2011-12 Q1. The slowdown is attributable both to domestic as
well as global factors.  There has been a slowdown in the global economy from 5.1  percent in 2010 to 3.8  percent in 2011.  The RBI  also  followed a tight monetary policy during most of 2011-12 to rein in on inflation which contributed to the increase in the cost of borrowings. These along with reduced investment
activity  contributed to the  slowdown in the industrial sector. Overall industrial growth moderated sequentially in each of the four quarters of 2011-12 and was at 2.9 percent compared to a growth of 8.2 percent in 2010-11.  During April–August of the current fiscal,  industrial  growth was at 0.4 percent. Due to a combination of factors like industrial slowdown affecting tax revenues and higher expenditure on subsidies on fuel and fertilizers, fiscal deficit shot up to 5.8 percent of GDP in 2011-12 as against a BE of 4.6 percent of GDP.  Headline WPI inflation, though moderated from 9.56  percent in 2010-11 and 8.94 percent in 2011-12 was at 7.81 percent in September 2012.  Food inflation has particularly been a cause of concern.  Trade and current account deficits widened to 10.3 percent and 4.2 percent of GDP in 2011-12 espectively.  The sharp decline in  the rupee during Q1 (April-June) of 2012 indicates among others, supply-demand imbalance in the domestic foreign exchange market dueto widening of CAD, slowdown in FII inflows and strengthening of US dollar in the international market due to the  safe haven status of US Treasuries. Like
many other currencies rupee also depreciated though sharply by 12.7 percent against the dollar in 2011-12 and by 7.8 percent in September 2012 compared to March 2012 though it has recovered marginally in the recent past.
During 2011-12, India‟s exports  and imports registered growth rates of 21.3 percent and  32.3  percent respectively.  Rising crude oil prices, along with increase in gold and silver prices contributed significantly to the import bill resulting in a high trade deficit growth of 55.6  percent.  In April-September 2012  export  growth was negative at (-)6.8 percent.  After a growth of  10.1 percent in January 2012, export growth has been  negative or low in the subsequent months. In September 2012 it was at (-)10.8 percent.  In fact,
exports have been falling month over month even in absolute terms since May 2012. During April-September 2012, import growth was also negative at (-)4.4 percent. Trade deficit in April-September 2012-13 is lower by 0.2 percent over corresponding period of previous year.
International Trade in Services: Global exports of services have shown consistent rise in the 2000s decade with a healthy average annual growth rate of around 9.5 percent, except in 2001 and 2009 - periods of global slowdown and economic crisis. In 2011, while world exports of commercial services grew
by 12 percent in Q1, 17 percent in Q2 and 14 percent in Q3, since Q4 the slowdown started with 5 percent growth, thus resulting in an overall growth of 11 percent in 2011. While in the first quarter of 2012 world exports and imports of commercial services grew by only 3 percent and  4 percent respectively, in the second quarter of 2012 both exports and imports of services grew by zero per cent.  Thus, trade in services has also been affected by the emerging global situation.
India’s Trade in Services: In 2011-12, India‟s services export growth was 7.1 percent, services  import growth was (-)6.9  percent and net services trade growth was 31.3  percent. Among the miscellaneous category, while software services exports grew by 12.2 percent, non-software services exports grew by a
negative (-)11.2 percent. Services export growth in Q1 of 2012-13 (April-June 2012) is at a low of 2.0  percent, while services import growth is at 15.9 percent. As a result, growth in net services trade is negative at (-) 13 percent. In July and August 2012, net services trade growths were  1.3  and  (-)4.8 per cent, respectively. Thus lesser cushion is available from services trade to trade deficit this year.
The challenges and Policy options on the Trade front for India: The challenges for India on the trade front are many.  Some are due to the current emerging global situation and some are systemic and long term in nature.
Macro and long term challenges and policies: While the Government has initiated second generation reforms, in the trade sector these could include further lowering of tariffs to ASEAN levels, while carefully taking note of domestic concerns and simultaneously removing duty benefit schemes which may become redundant in a low tariff regime. While India is relatively less vulnerable to the developments in the US, EU, and other developed countries due to its diversification of exports to Asia and ASEAN, there are concerns on the bilateral trade deficit front with countries like China and Switzerland. While substantial progress has been achieved on the market diversification front, a lot more needs to be done on the product diversification front as India‟s export presence is limited in the top items of world trade. While India has made new forays in skill-and capital-Intensive exports like information technology (IT), gems and jewellery, and engineering goods, it is losing steam in its traditional areas of strength, i.e. in the labour-intensive exports like textiles, leather and leather manufactures, handicrafts, and carpets. India‟s push towards regional and bilateral agreements should result in meaningful and result-oriented FTAs and CECAs, which carefully avoid inverted duties and take care of domestic concerns.  A more conducive environment for trade in services can be created by liberalizing FDI inflows as FDI and trade in services have a close relationship given the nature of intra-firm trade of multinational parent firms with affiliates.
Rationalizing taxes in services like shipping and telecom, going forward with totalization agreements, streamlining domestic regulations like licensing requirements & procedures and technical standards can also help in the growth and export of services.
(By Dr. H.A.C. Prasad, Ministry of Finance, GOI)

Union Finance Minister's Statement on CURRENT ACCOUNT DEFICIT (CAD)

The Current Account Deficit, for the first half of the current year (2012-13) stood at US$ 38.7 billion or 4.6% of GDP.    The main contributors to the CAD were
 Exports recorded a sharp decline of 7.4%, while imports recorded a smaller decline of 4.3% leading to widening of the trade deficit. Of the imports, gold imports amounted to US$ 20.25 billion.
 This was partly made up by an increase in services exports of 4.2% and, consequently, surplus in services which amounted to US$ 29.6 billion.
 Remittances of US$ 32.9 billion.
Notwithstanding the widening of the CAD, the positive aspect is that the CAD was financed without drawing on reserves.  This was mainly due to adequate inflow of FDI (US$ 12.8 billion) and FII (US$ 6.2 billion).  In addition, external commercial borrowing amounted to US$ 1.7 billion. The net result is that we have not drawn on the foreign exchange reserves and, in fact, there is a marginal accretion of US$ 0.4 billion to the foreign exchange reserves.
As would be evident, gold imports constituted a substantial chunk of the imports and is a huge drain on the Current Account.   Suppose gold imports had been one half of the actual level, that would have meant that our foreign exchange reserves would have increased by US$ 10.5 billion. I would therefore appeal to the people to moderate the demand for gold which leads to large imports of gold. I may add that we may be left with no choice but to make it a little more expensive to import gold. This matter is under Government’s consideration.
While the CAD  is indeed worrying, I think it is within our capacity to finance the CAD, thanks to FDI, FII and ECB.  I would like to once again underscore the crucial importance of FDI and FII.  As I have said before, attracting foreign funds to India has become an economic imperative.
I am confident that even if the year ends with a slightly larger CAD than last year, we would be able to finance the Current Account Deficit without drawing upon reserves.

(Related Definition: Current Account Deficit(CAD): The current account is one of the two primary components of the balance of payments, the other being capital account. It is the sum of the balance of trade (i.e., net revenue on exports minus payments for imports), factor income (earnings on foreign investments minus payments made to foreign investors) and cash transfers.

The current account balance is one of two major measures of the nature of a country's foreign trade (the other being the net capital outflow). A current account surplus increases a country's net foreign assets by the corresponding amount, and a current account deficit does the reverse. Both government and private payments are included in the calculation. It is called the current account because goods and services are generally consumed in the current period.

A formula for calculating current accounts

Thus, one can see that a certain country's current account can be calculated by the following formula:

When CA is the current account, X and M the export and import of goods and services respectively, NY the net income from abroad, and NCT the net current transfers.)

[edit]

Excise revenue growth trails overall growth due to a narrow industrial base

By: V S Krishnan, Civil Servant


Central excise duty, one of India's major taxes, is second only to corporate tax and is expected to yield 18% of the total tax revenue of over Rs 10,70,000 crore in 2012-13. It, however, is not as buoyant as service tax (see table). 

This weakness, even in a period of high growth, owes more to the narrow industrial structure, constitutional provisions for levy of the tax and generous scheme of SSI exemptions, than to output growth trends. 

India has only 1.20 lakh units paying excise duty. This narrow industrial base stems from the Second Plan's emphasis on high-skill and high-valueadded industries. There was comparative neglect of mass consumer industries such as textiles, food processing and leather. 

India failed to develop an equivalent of China's town and village enterprises that absorbed a lot of labour from agriculture, leading to mass industrialisation. 

Pranab Bardhan, in his recent book Awakening Giants: Feet of Clay, points out that manufacturing firms (excluding private household enterprises) employing 6-9 workers contributed to 42% of industrial employment while units employing 500-plus workers absorbed a further 23%. This bipolar distribution of manufacturing firms concentrated at the two extremities of the industrial spectrum left a huge gap in the middle. 

The statute links dutiability to the 'activity of manufacture' as distinct from 'value addition' in manufacture. Alarge number of value-adding activities such as repairs and fabrication are kept out of the tax net. 

Further, the excise exemptions for small-scale units have been too generous: up to turnover of Rs 4 crore in the previous years and complete exemption up toRs 1.5 crore in the current year. However, income-tax audit and discharge of both income tax and sales tax are mandated for units with an annual turnover of Rs 60 lakh or more. 


The threshold limit of exemption of up to Rs 1.5 crore is higher than the threshold limits in the Rs 30-40 lakh in countries like South Korea, Malaysia, Thailand and Brazil. 

The other factor that makes it difficult to deduce growth in central excise revenue from trends in the industrial index of manufacturing is the mismatch between the importance of various goods segments in the excise revenue basket and the index of output. 

The top five industries for central excise revenue are petroleum and petroleum products 42%, cigarettes and other tobacco products 8%, iron and steel products 8%, cement 5% and automobiles 4%. Their weight in the manufacturing index are: petroleum and petroleum products 4%, cigarettes and other tobacco products 2%, iron and steel products 3%, cement 5% and automobiles 4%. 

Therefore, while the top five industries account for 67% of central excise revenue, they have a weight of only 18% in the manufacturing segment of the industrial index (excluding mining and electricity). 

Therefore, factors determining the growth of central excise revenues are not so much the overall growth of themanufacturing sector as the sectoral composition of this growth. This leads to a situation where central excise revenue could grow even if the manufacturing index is down, as is happening in this fiscal year It is possible that some of the conundrums may fade away in future. The introduction of the goods and services tax (GST) would broad-base the levy of central excise duty that would be based on value addition in themanufacturing sector rather than linked to the 'activity of manufacture'. 

The GST regime also proposes to lower the threshold of SSI exemptions and bring them on par with states' threshold limit of exemption of Rs 10 lakh. Finally, the implementation of the National Manufacturing Policy may, perhaps, give a fillip to development of labour-intensive industries such as textiles, food processing, leather, light metal fabrication and auto parts. 

But, for now, the narrow industrial base will continue to hobble buoyancy in the growth of central excise revenue that still mainly depends on the fortunes of the petroleum and tobacco sectors. 

More than 350 years ago, John Baptist Colbert, Louis XIV's treasury minister, pithily remarked, "The art oftaxation consists in so plucking the goose as to obtain the largest amount of feathers with the smallest amount of hissing." In India, the hissing of the smaller geese has been so loud that plucking has been confined to a few large, excluding the many small.

(Source: Economic Times, 5 January, 2013)

Kerala Vs Gujarat Model ---JAGDISH BHAGWATI & ARVIND PANAGARIYA

Kerala Vs Gujarat Model JAGDISH BHAGWATI & ARVIND PANAGARIYA ECONOMISTS

‘We Are Impressed By Modi’s Economic Policies’

Jagdish Bhagwati is university professor of economics at Columbia University. He is the author of several books including “In Defense of Globalisation”. His latest book, “India's Tryst with Destiny: Debunking Myths that Undermine Progress and Addressing New Challenges”, which he has co-authored with Arvind Panagariya, a professor of Indian economics at Columbia University, argues that growth can reduce poverty and that slow economic growth will hurt social development. In a joint response to questions from ET, the authors dwell on the message in their book, revive the Kerala Model Vs Gujarat debate and attack economists such as Nobel laureate Amartya Sen for his “anti-growth assertions”. Excerpts from an interview with Ullekh NP: 
Why do you want to compare the Kerala model of development with the Gujarat model of development? “Kerala Model” in our book is a metaphor for a primarily redistribution and statedriven development while “Gujarat Model” is the metaphor for a primarily growth and private-entrepreneurship driven development. As such the Kerala Model vs. Gujarat Model debate is a longstanding one. We show in our book, “India’s Tryst with Destiny,” that it is ultimately the Gujarat Model that has delivered in Kerala. Contrary to common claims, Kerala has been a rapidly growing state in the post-Independence era, which is the reason it ranks fourth among the larger states, according to per-capita gross state domestic product and first according to per-capita expenditure. It also suffers from the highest level of inequality among the larger states. So growth, and not redistribution, largely explains low levels of poverty. In health, Kerala's per-capita private expenditures are nearly eight times its percapita public expenditures. In education, excluding two or three tiny northeastern states, at 53%, rural Kerala has by far the highest proportion of students between ages 7 and 16 in private schools. The nearest rival, rural Haryana, has 40% of these students in private schools. 
Kerala's social indicators are still high and there isn't much gender bias in both health and education. On the other hand, in Gujarat, the female and male infant mortality rates stood at 51 and 44, respectively, in 2010-11 (The corresponding national figures were 49 and 46, respectively). No one would question the superior levels of social indicators in Kerala compared with any other state in India, let alone Gujarat. But what does that have to do with the Kerala Model? Kerala simply started at very high levels of social indicators than the rest of the country and it has maintained that lead. In 1951, literacy rate was 47% in Kerala compared with just 18% in India and 22% in Gujarat. As for the infant mortality rate (IMR), in 1971, the earliest year for which we have comparable data, it was 58 per thousand live births in Kerala, 129 in India and as high as 144 in Gujarat. Even the male-female differences you cite date back to pre-Independence era. The right question to ask is whether the Kerala Model produced perceptibly superior gains (as opposed to superior levels, which were inherited at Independence) in social indicators. The answer to this question turns out to be mostly negative, as we demonstrate in our book. 
The people of Kerala aren't perceived to be as entrepreneurial as Gujaratis are. Is it just a problem of perception? Does it mean that what suited Gujarat wouldn't suit Kerala and vice-versa? It is wrong to argue that Keralites are not entrepreneurial. In fact, we show in our book that they have had a long history of commercialisation and globalisation via trade and that the resulting prosperity is a key explanation of the high social indicators they inherited at Independence. Today also, with the long-standing inherited preference for education, skilled Kerala migrants can be found everywhere. Astonishingly, one in three households in both rural and urban Kerala has at least one member living abroad. It is not surprising therefore that remittances have pushed Kerala to the top in terms of per-capita household expenditures despite its fourth rank according to per-capita gross state domestic product. In comparison, Gujarat has less than one in fifty rural households and one in ten urban households with one or more migrants abroad. Gujarat also has had a longstanding history of a more traditional form of entrepreneurship and this entrepreneurship has flourished under the Gujarat Model. One of us (Bhagwati, in his writings on globalisation) explains that the beneficial effects of globalisation can come in different ways through trade, foreign investment or migration, depending on the circumstances of a country. Kerala and Gujarat have gained differently from prosperity resulting from their people's entrepreneurship; and in both cases, redistributive policies played at best a limited role. Indeed, in our federal structure, being more prosperous, they have been sources of revenues for inter-state transfers to the poorer states. 
Look at education: In 2011, 87.2% of Gujarati males were literate as against 70.7% of females; a gap of 17.2%. The corresponding all-India figures are 82.1% and 65.4%; a gap of 16.7%. How do you explain this? The traditional neglect of the girl child in much of India with rare exceptions such as Kerala in nearly all fields has been wellknown. In fact, one of the first economists to note the gender bias in education and nutrition was one of us (Bhagwati), in a 1973 paper in the Oxford Journal, World Development. Today, there is greater awareness of this issue than in the early 1970s. But the efforts to eliminate this bias have also run into new difficulties such as new technologies that allow the determination of the sex of the child in the early part of a pregnancy. 
Professor Bhagwati has said in an interview that growth in Gujarat is on track. So far, it hasn't shown any impact on social indicators. Do you believe in trickle-down effect? First, we have always argued that the use of the conservative phrase “trickle-down” is misleading. We prefer to use the more radical phrase “pull up”. By reducing poverty, the growth strategy increases incomes which, in turn, can be expected to improve most social indicators (though nutrition in particular may get worse if the diet shifts to less nutritious but tastier foods). Most social indicators have in fact seen a lot of progress in Gujarat and in many of these, the changes (which economists call “first difference”) in social indicators make Gujarat look pretty good indeed. Gujarat inherited low levels of social indicators and it is the change in these indicators where Gujarat shows impressive progress. The literacy rate has risen from 22% in 1951 to 69% in 2001 and 79% in 2011. The infant mortality rate per thousand has fallen from 144 in 1971 to 60 in 2001 and 41 in 2011. 
Why do you say all seems to be well in Gujarat? In literacy, too, Gujarat ranks 18th out of 35 states and Union Territories. In sex ratio, the state is way behind the national average of 940 females per 1,000 males. In poverty reduction of 8.6% in 5 years (2005-10), it is still behind states like Odisha (19.2%), Maharashtra (13.7%) and Tamil Nadu (13.1%). But you are again failing to distinguish between low levels and changes therein. On the latter criterion, which is the relevant one, Gujarat is making good progress in most areas. The additional good news is that with relatively high per-capita incomes as well as a high growth rate, it will continue to generate high and rapidly rising levels of revenues that, when combined with its good governance (which predates the current chief minister Narendra Modi), promise continued accelerated and all-around progress. 
There are more reasons to worry: 44.6% of children below the age of five suffer from malnutrition in Gujarat whereas nearly 70% of the children suffer from anaemia. States like UP and Bihar have fared better in malnutrition. Such comparisons selectively focusing on one or the other social indicator, especially their levels, are not particularly meaningful; one must consider the changes in several indicators. By that test, Gujarat has done quite well. But we also need to appreciate, and this is what one of us (Panagariya) has ceaselessly argued in recent writings, that the nutrition measurements leave a lot to be desired. 
Kerala topped the Human Development Index in 2011, followed by Delhi, Himachal Pradesh, Goa and Punjab. Why do you still criticise the Kerala model? As we have already indicated, Kerala's high social indicators are well known and they are not contested. The question we ask is: what does that have to do with the Kerala Model? To keep asserting such causality is the mark of a lazy intellect and is, besides, dangerous in its potential for misleading us to make harmful policy choices. 
Why did you zero in on the Gujarat Model of development and not Tamil Nadu Model or Maharashtra Model of development? Why are you obsessed about “debunking the myth” about the Kerala Model of development? As we have said at the beginning, Gujarat Model is a metaphor and you can surely apply it to Tamil Nadu and Maharashtra. As we have argued in the book and also above, it also applies to Kerala in large measure. Debunking the Kerala Myth is important if false arguments and rhetoric are not to be allowed to undermine developmental strategies that are more effective and have helped transform India since 1991 and created finally a substantial impact on poverty and on the welfare of the marginalised groups, as we demonstrate in our book. 
What is the message in the book? Do you both have an intellectual rivalry with Professor Amartya Sen and his school of thought? The message: growth is the single most important instrument of poverty reduction; and India needs to both accelerate growth and make it more inclusive through track-I reforms and make its redistribution programmes more effective through track-II reforms. As for our rivalry, it is with the practitioners of bad economics who are continuously at work to drive out good economics. It is interesting that, in evident riposte to the recent anti-growth assertions of Professor Sen, and taking a leaf from our extensive arguments in defence of the growth strategy, the prime minister has asserted forcefully that growth is central to the poverty-reduction agenda. Avuncular pronouncements by prominent economists, which fly in the face of the obvious and also much of the systematic evidence, are no longer enough to carry the day. 
Are you both impressed by the leadership of Gujarat CM Modi? 
On economic policies, yes. 
on Kerala Model Kerala's high social indicators are well known and they are not contested. The question we ask is: what does that have to do with the Kerala Model? To keep asserting such causality is the mark of a lazy intellect 
on Gujarat Model Gujarat inherited low levels of social indicators and it is the change in these indicators where Gujarat shows impressive progress; it is ultimately the Gujarat Model that has delivered in Kerala.

(Source: Economic Times, 2 January, 2013)