PROJECT REPORT ON

IMPACT OF GOVEMENT EXPANDITURE ON STANDARD OF

LIVING OF PEOPLE IN INDIA
IN PARTIAL FULFILLMENT OF
THE DEGREE AWARDED AT
M.COM PART-I (BANKING &FINANCE)
SEMESTER-I

SUBJECT NAME:ECONOMIC


SUBMITTED TO
UNIVERSITY OF MUMBAI
FOR ACADEMIC YEAR 2013 2014


SUBMITTED BY
NAME: SWATI M SONCHHTRA
ROLL NO: 56

VIVA COLLEGE OF ARTS,COMMERCE AND SCIENCE
VIRAR (WEST)
40130



















DECLARATION

I hereby declare that the project titled IMPACT OF GOVEMENT
EXPANDITURE ON STANDARD OF LIVING OF PEOPLE IN INDIA
is an original work prepared by me and is being submitted to University
of Mumbai in partial fulfillment of M.COM PART -I SEM -I
(ACCOUNTANCACY) degree for the academic year 2013-2014.

To the best of my knowledge this report has not been submitted
earlier to the University of Mumbai or any other affiliated college for the
fulfillment of M.COM degree









Date: 9.10.2013 Name: SWATI.M.SONCHHTRA

Place: VIRAR Sign:



















ACKNOWLEDGEMENT

I SWATI.M.SONCHHTRA the student of VIVA College pursuing my
M.COM I (ACCOUNTANCACY), would like to pay the credits, for
all those who helped in the making of this project.
The first in accomplishment of this project is our Principal Dr. R.D
Bhagat, Vice-Principal Prof. PrajaktaParanjape, Course Co-ordinator
Prof. NilimaBhagwat and Guide Prof. PrajaktaParanjape & teaching &
non teaching staff of VIVA college.
I would also like to thank all my college friends those who influenced my
project in order to achieve the desired result correctly.



















Index
1. Introduction
2. History and origin
3. Features
4. Nature
5. Advantages and disadvantages
6. Role
7. Function
8. Objective
9. Conclusion

























IMPACT OF
GOVERNMENT
EXPENDITURE ON
STANDARD OF
LIVING PEOPLE IN
INDIA














INTRODUCTION
Since the early 1950s, successive governments have implemented
various schemes, under planning, to alleviate poverty that have
met with partial success. Programmes like Food for
work and National Rural Employment Programme have attempted
to use the unemployed to generate productive assets and build
rural infrastructure.
[14]
In August 2005, the Indian
parliament passed the Rural Employment Guarantee Bill, the
largest programme of this type, in terms of cost and coverage,
which promises 100 days of minimum wage employment to every
rural household in 200 of India's 600 districts. The Indian
government is planning to bring in more economic reforms which
can help farmers and unskilled labourers transition into
industrialized sectors.
Life expectancy in India by States in year 2003
STATE Total MALE FEMALE
Andhra Pradesh 63.1 61.6 64.1
Assam 57.2 57.1 57.6
Bihar 60.2 60.7 58.9
Gujarat 62.8 61.9 63.7
Haryana 64.5 64.1 65.0
Himachal Pradesh 65.6 65.1 65.8
Karnataka 64.0 62.4 65.5
Kerala 73.5 70.6 76.1
Madhya Pradesh 56.4 56.5 56.2
Maharashtra 65.8 64.5 67.0
Odisha 57.7 57.6 57.8
Punjab 68.1 66.9 69.1
Rajastan 60.5 59.8 60.9
Tamil Nadu 64.6 63.7 65.7
Uttar Pradesh 58.4 58.9 57.7
West Bengal 63.4 62.8 64.3
India 61.7 60.8 62.5
Physical infrastructure
Cheap and environment friendly public transport is seen as a
necessity for India's crowded and polluted metros the New Delhi
Metro, operational since 2002 and seen as a model for other
metros.
Since independence, India has allocated nearly half of the total
outlay of the five-year plans for infrastructural development. Much
of the total outlay was spent on large projects in the area of
irrigation, energy, transport, communications and social
overheads. Development of infrastructure was completely in the
hands of the public sector and was plagued by corruption,
bureaucratic inefficiencies, urban-bias and an inability to scale
investment.
[16]
Calcutta city was the first city in India to boast of a
metro-system.Today the calcutta metro is considered among the
world's best in terms of service and infrastructure. India's low
spending on power, construction, transportation,
telecommunications and real estate, at $31 billion or 6% of GDP in
2002 has prevented India from sustaining a growth rate of around
8%. This has prompted the government to partially open up
infrastructure to the private sector allowing foreign
investment.India holds second position in the world in roadways'
construction.
]

As of 31 December 2005, there were an estimated 835,000
broadband lines in India. Low tele-density is the major hurdle for
slow pickup in broadband services. Over 76% of the broadband
lines were via DSL and the rest via cable modems.
A 2007 study by the Asian Development Bank showed that in 20
cities the average duration of water supply was only 4.3 hours per
day. No city had a continuous water supply. The longest duration
of supply was 12 hours per day in Chandigarh, and the lowest was
9 hours per day in Rajkot.
One of the critical problems facing India's economy is the sharp
and growing regional variations among India's different states and
territories in terms of per capita income, poverty, availability of
infrastructure and socio-economic development. For instance, the
difference in growth rate between the forward and backward
states was 0.3% (5.2% & 4.9%) during 198081 to 199091, but had
grown to 3.3% (6.3% & 3.0%) during 199091 to 199798.
[22]
Per
Capita Income in India varies drastically. As of 2010, New Delhi
had a Per Capita Income of $ 3,020 whereas Bihar's Per Capita
Income was at a paltry $ 445.
The five-year plans have attempted to reduce regional disparities
by encouraging industrial development in the interior regions, but
industries still tend to concentrate around urban areas and port
cities. Even the industrial townships in the interiors, Bhilai for
instance, resulted in very little development in the surrounding
areas.
[23]
After liberalisation, the disparities have grown despite
the efforts of the union government in reducing them. Part of the
reason being that manufacturing and services and not agriculture
are the engines of growth. The more advanced states are better
placed to benefit from them, with infrastructure like well
developed ports, urbanisation and an educated and skilled
workforce which attract manufacturing and service sectors. The
union and state governments of backward regions are trying to
reduce the disparities by offering tax holidays, cheap land, etc.,
and focusing more on sectors like tourism, which although being
geographically and historically determined, can become a source
of growth and is faster to develop than other sectors.

What have we learned about money in a free society? We have
learned that all money has originated, and must originate, in a
useful commodity chosen by the free market as a medium of
exchange. The unit of money is simply a unit of weight of the
monetary commodity--usually a metal, such as gold or silver.
Under freedom, the commodities chosen as money, their shape
and form, are left to the voluntary decisions of free individuals.
Private coinage, therefore, is just as legitimate and worthwhile as
any business activity. The "price" of money is its purchasing
power in terms of all goods in the economy, and this is
determined by its supply, and by every individual's demand for
money. Any attempt by government to fix the price will interfere
with the satisfaction of people's demands for money. If people
find it more convenient to use more than one metal as money, the
exchange rate between them on the market will be determined by
the relative demands and supplies, and will tend to equal the
ratios of their respective purchasing power. Once there is enough
supply of a metal to permit the market to choose it as money, no
increase in supply can improve its monetary function. An increase
in money supply will then merely dilute the effectiveness of each
ounce of money without helping the economy. An increased stock
of gold or silver, however, fulfills more non-monetary wants
(ornament, industrial purposes, etc.) served by the metal, and is
therefore socially useful. Inflation (an increase in money
substitutes not covered by an increase in the metal stock) is
never socially useful, but merely benefits one set of people at the
expense of another. Inflation, being a fraudulent invasion of
property, could not take place on the free market.
In sum, freedom can run a monetary system as superbly as it runs
the rest of the economy. Contrary to many writers, there is
nothing special about money that requires extensive
governmental dictation. He, too, free men will best and most
smoothly supply all their economic wants. For money as for all
other activities, of man, "liberty is the mother, not the daughter, of
order."Governments, in contrast to all other organizations, do not
obtain their revenue as payment for their services. Consequently,
governments face an economic problem different from that of
everyone else. Private individuals who want to acquire more
goods and services from others must produce and sell more of
what others want. Governments need only find some method of
expropriating more goods without the owner's consent.
In a barter economy, government officials can only expropriate
resources in one way: by seizing goodsin kind. In a monetary
economy they will find it easier to seize monetary assets, and
then use the money to acquire goods and services for
government, or else pay the money as subsidies to favored
groups. Such seizure is called taxation. [1]
Taxation, however, is often unpopular, and, in less temperate
days, frequently precipitated revolutions. The emergence of
money, while a boon to the human race, also opened a more
subtle route for governmental expropriation of resources. On the
free market, money can be acquired by producing and selling
goods and services that people want, or by mining (a business no
more profitable, in the long run, than any other). But if
government can find ways to engage in counterfeiting--the
creation of new money out of thin air--it can quickly produce its
own money without taking the trouble to sell services or mine
gold. It can then appropriate resources slyly and almost
unnoticed, without rousing the hostility touched off by taxation. In
fact, counterfeiting can create in its very victims the blissful
illusion of unparalleled prosperity.
Counterfeiting is evidently but another name for inflation--both
creating new "money" that is not standard gold or silver, and both
function similarly. And now we see why governments are
inherently inflationary: because inflation is a powerful and subtle
means for government acquisition of the public's resources, a
painless and all the more dangerous form of taxation.
[1] Direct seizure of goods is therefore not now as extensive as
monetary expropriation. Instances of the former still occurring are
"due process" seizure of land under eminent domain, quartering
of troops in an occupied country, and especially compulsory
confiscation of labor service (e.g., military conscription,
compulsory jury duty, and forcing business to keep tax records
and collect withholding taxes).

To gauge the economic effects of inflation, let us see what
happens when a group of counterfeiters set about their work.
Suppose the economy has a supply of 10,000 gold ounces, and
counterfeiters, so cunning that they cannot be detected, pump in
2000 "ounces" more. What will be the consequences? First, there
will be a clear gain to the counterfeiters. They take the newly-
created money and use it to buy goods and services. In the words
of the famous New Yorker cartoon, showing a group of
counterfeiters in sober contemplation of their handiwork: "Retail
spending is about to get a needed shot in the arm." Precisely.
Local spending, indeed, does get a shot in the arm. The new
money works its way, step by step, throughout the economic
system. As the new money spreads, it bids prices up--as we have
seen, new money can only dilute the effectiveness of each dollar.
But this dilution takes time and is therefore uneven; in the
meantime, some people gain and other people lose. In short, the
counterfeiters and their local retailers have found their incomes
increased before any rise in the prices of the things they buy. But,
on the other hand, people in remote areas of the economy, who
have not yet received the new money, find their buying prices
rising before their incomes. Retailers at the other end of the
country, for example, will suffer losses. The first receivers of the
new money gain most, and at the expense of the latest receivers.
Inflation, then, confers no general social benefit; instead, it
redistributes the wealth in favor of the first-comers and at the
expense of the laggards in the race. And inflation is, in effect, a
race--to see who can get the new money earliest. The latecomers--
the ones stuck with the loss--are often called the "fixed income
groups." Ministers, teachers, people on salaries, lag notoriously
behind other groups in acquiring the new money. Particular
sufferers will be those depending on fixed money contracts--
contracts made in the days before the inflationary rise in prices.
Life insurance beneficiaries and annuitants, retired persons living
off pensions, landlords with long term leases, bondholders and
other creditors, those holding cash, all will bear the brunt of the
inflation. They will be the ones who are "taxed." [2]
Inflation has other disastrous effects. It distorts that keystone of
our economy: business calculation. Since prices do not all
change uniformly and at the same speed, it becomes very difficult
for business to separate the lasting from the transitional, and
gauge truly the demands of consumers or the cost of their
operations. For example, accounting practice enters the "cost" of
an asset at the amount the business has paid for it. But if inflation
intervenes, the cost of replacing the asset when it wears out will
be far greater than that recorded on the books. As a result,
business accounting will seriously overstate their profits during
inflation--and may even consume capital while presumably
increasing their investments. [3] Similarly, stock holders and real
estate holders will acquire capital gains during an inflation that
are not really "gains" at all. But they may spend part of these
gains without realizing that they are thereby consuming their
original capital.
By creating illusory profits and distorting economic calculation,
inflation will suspend the free market's penalizing of inefficient,
and rewarding of efficient, firms. Almost all firms will seemingly
prosper. The general atmosphere of a "sellers' market" will lead to
a decline in the quality of goods and of service to consumers,
since consumers often resist price increases less when they
occur in the form of downgrading of quality. [4] The quality of
work will decline in an inflation for a more subtle reason: people
become enamored of "get-rich-quick" schemes, seemingly within
their grasp in an era of ever-rising prices, and often scorn sober
effort. Inflation also penalizes thrift and encourages debt, for any
sum of money loaned will be repaid in dollars of lower purchasing
power than when originally received. The incentive, then, is to
borrow and repay later rather than save and lend. Inflation,
therefore, lowers the general standard of living in the very course
of creating a tinsel atmosphere of "prosperity."
Fortunately, inflation cannot go on forever. For eventually people
wake up to this form of taxation; they wake up to the continual
shrinkage in the purchasing power of their dollar.
At first, when prices rise, people say: "Well, this is abnormal, the
product of some emergency. I will postpone my purchases and
wait until prices go back down." This is the common attitude
during the first phase of an inflation. This notion moderates the
price rise itself, and conceals the inflation further, since the
demand for money is thereby increased. But, as inflation
proceeds, people begin to realize that prices are going up
perpetually as a result of perpetual inflation. Now people will say:
"I will buy now, though prices are `high,' because if I wait, prices
will go up still further." As a result, the demand for money now
falls and prices go up more, proportionately, than the increase in
the money supply. At this point, the government is often called
upon to "relieve the money shortage" caused by the accelerated
price rise, and it inflates even faster. Soon, the country reaches
the stage of the "crack-up boom," when people say: "I must buy
anything now--anything to get rid of money which depreciates on
my hands." The supply of money skyrockets, the demand
plummets, and prices rise astronomically. Production falls
sharply, as people spend more and more of their time finding
ways to get rid of their money. The monetary system has, in
effect, broken down completely, and the economy reverts to other
moneys, if they are attainable--other metal, foreign currencies if
this is a one-country inflation, or even a return to barter
conditions. The monetary system has broken down under the
impact of inflation.
This condition of hyper-inflation is familiar historically in
the assignats of the French Revolution, the Continentals of the
American Revolution, and especially the German crisis of 1923,
and the Chinese and other currencies after World War II. [5]
A final indictment of inflation is that whenever the newly issued
money is first used as loans to business, inflation causes the
dread "business cycle." This silent but deadly process,
undetected for generations, works as follows: new money is
issued by the banking system, under the aegis of government,
and loaned to business. To businessmen, the new funds seem to
be genuine investments, but these funds do not, like free market
investments, arise from voluntary savings. The new money is
invested by businessmen in various projects, and paid out to
workers and other factors as higher wages and prices. As the new
money filters down to the whole economy, and the people tend to
reestablish their old voluntary consumption/saving proportions.
In short, if people wish to save and invest about 20% of their
incomes and consume the rest, new bank money loaned to
business at first makes the saving proportion look higher. When
the new money seeps down to the public, it reestablishes its old
20-80 proportion, and many investments are now revealed to be
wasteful. Liquidation of the wasteful investments of the
inflationary boom constitutes the depression phase of the
business cycle. [6]
[2] It has become fashionable to scoff at the concern displayed by
"conservatives" for the "widows and orphans" hurt by inflation.
And yet this is precisely one of the chief problems that must be
faced. Is it really "progressive" to rob widows and orphans and to
use the proceeds to subsidize farmers and armament workers?
[3] This error will be greatest in those firms with the oldest
equipment, and in the most heavily capitalized industries. An
undue number of firms, therefore, will pour into these industries
during an inflation. for further discussion of this accounting-cost
error, see W.T. Baxter, "The Accountant's Contribution to the
Trade Cycle," Economica (May, 1955), pp. 99-112.
[4] In these days of rapt attention to "cost-of-living indexes" (e.g.,
escalator-wage contracts) there is strong incentive to increase
prices in such a way that the change will not be revealed in the
index.
[5] On the German example, see Costantino Bresciani-
Turroni, The Economics of Inflation (London: George Allen and
Unwin, Ltd., 1937).
[6] For a further discussion, see Murray N. Rothbard, America's
Great Depression (Princeton: D. Van Nostrand Co., 1963), Part I.
The Impact of an Ageing Population on the Economy
One of the great achievements of the twentieth century is a
dramatic rise in life expectancy. For examples, life expectancy in
the US has increased from 45 in 1902 to 75.7 in 2004 (link).
However, increased life expectancy combined with declining birth
rates have caused many to worry about the cost of an ageing
population. Frequently, we hear about demographic time bombs
and the fear future generations will struggle to meet an ever
increasing number of retired workers and pension commitments.
But, are we correct to be worrying about an ageing population?
Firstly, in the UK, the ratio of people of working age to people
over 65 could fall from 3.7to 1 in 1999 to 2.1 to 1 in 2040. (BBC)
This suggests a very big increase in the dependency ratio and is
consequently a cause for concern because with current spending
pension commitments, it will place a higher burden on the
shrinking working population.
However, others argue it is a mistake to base calculations solely
on a fixed retirement age of 65. If life expectancy increases
dramatically, you would expect a sensible policy is to allow some
increase in the retirement age, e.g. keeping the same % of your
working life for retirement. The UK government has already made
tentative steps to raise the retirement age and increase private
sector pensions. These policies will make an ageing population
more manageable and so it could be something we can celebrate
rather than fear.
Main Impacts of an Ageing Population
Increase in the dependency ratio. If the retirement age remains
fixed, and the life expectancy increases, there will be relatively
more people claiming pension benefits and less people working
and paying income taxes. The fear is that it will require high tax
rates on the current, shrinking workforce.
Increased government spending on health care and pensions.
Also, those in retirement tend to pay lower income taxes because
they are not working. This combination of higher spending
commitments and lower tax revenue is a source of concern for
Western governments especially those with existing debt issues
and unfunded pension schemes.
Those in work may have to pay higher taxes. This could create
disincentives to work and disincentives for firms to invest,
therefore there could be a fall in productivity and growth.
Shortage of workers. An ageing population could lead to a
shortage of workers and hence push up wages causing wage
inflation. Alternatively, firms may have to respond by encouraging
more people to enter the workforce, through offering flexible
working practices.
Changing sectors within the economy. An increase in the
numbers of retired people will create a bigger market for goods
and services linked to older people (e.g. retirement homes)
Higher savings for pensions may reduce capital investment. If
society is putting a higher % of income into pension funds, it
could reduce the amount of savings available for more productive
investment, leading to lower rates of economic growth.

Evaluation of an Ageing Population
A declining birth rate also means a smaller number of young
people. This will save the government money because young
people require education and pay little, if any, taxes.
It depends on health and mobility of an ageing population. If
medical science helps people live longer, but with poor mobility,
there will be less chance to work. If people live longer and can
remain physically active for longer, the adverse impact will be
less.
Immigration could be a potential way to defuse the impact of an
ageing population because immigration is often from younger
people.
Increasing the retirement age is one solution to an ageing
population. But, the effect of a higher retirement age will not be
felt equally. Those with private savings may be able to still retire
early, those with low income paid jobs are more likely to have to
keep working. Also, the impact of longer working life will be felt
more by manual workers who will find it harder to keep working.
Population demographics have been shifting for the past few
centuries. This is not the first time we have had shifts in the age
profile of the population.
A big issue is whether spending commitments are funded or
unfunded. Many western governments fund their pension plans
through pay as you go, rather than saving national insurance
contributions.
Part of the problem is that there is currently a strong incentive for
people to retire early. The effective marginal tax rate imposed on
earnings resulting from delayed retirement has in many systems
been in excess of 60 per cent (link) These incentives have
encouraged many to take early retirement. Also, there is often a
rule prohibiting people working longer even if they wanted to. If
these incentives can be changed, we could increase the number
of people working for longer and reduce the dependency burden.
Forecast for Dependency Ratios in Different Countries



HISTORY AND ORIGIN

With one of the fastest growing economies in the world, clocked
at a growth rate of 8.3% in 2010, India is fast on its way to
becoming a large and globally important consumer economy. The
Indian middle class was estimated to be 250 million people in
2007, by McKinsey & Company.
[1]
It will reach 600 million by 2030.
According to Deutsche Research the estimates are nearly 300
million people for all Middle Class.
[2]
If current trends continue,
Indian per capita purchasing power parity will significantly
increase from 4.7 to 6.1 percent of the world share by 2015.
[3]
In
2006, 22 percent of Indians lived under the poverty line. India aims
to eradicate poverty by 2020.
[4]

According to NCAER, India's middle class population to touch 267
million in 5 yrs. Further ahead, by 2025-26 the number of middle
class households in India is likely to more than double from the
2015-16 levels to 113.8 million households or 547 million
individuals. .
[5]

The standard of living in India shows large disparity. For example,
rural areas of India exist with very basic (or even non-existent)
medical facilities, while cities boast of world class medical
establishments. Similarly, the very latest machinery may be used
in some construction projects, but many construction workers
work without mechanisation in most projects.
[6]

In 2010, the per capita PPP-adjusted GDP for India was
US$3,608.
[7]

Contents
[hide]
1 Poverty
2 Physical infrastructure
3 Regional imbalance
4 See also
5 Notes
Poverty[edit]
Main article: Poverty in India
A 24.3% of the population earned less than US$1 (PPP, around
US$0.25 in nominal terms) a day in 2005, down from 42.1% in
1981.
[8][9]
41.6% of its population is living below the new
international poverty line of $1.25 (PPP) per day, down from 59.8%
in 1981.
[8]
The World Bank further estimates that a third of the
global poor now reside in India.
On the other hand, the Planning Commission of India uses its own
criteria and has estimated that 27.5% of the population was living
below the poverty line in 20042005, down from 51.3% in 1977
1978, and 36% in 1993-1994.
[10]
The source for this was the 61st
round of the National Sample Survey (NSS) and the criterion used
was monthly per capita consumption expenditure below 356.35
for rural areas and 538.60 for urban areas. 75% of the poor are in
rural areas, most of them are daily wagers, self-employed
householders and landless labourers.
Although Indian economy has grown steadily over the last two
decades, its growth has been uneven when comparing different
social groups, economic groups, geographic regions, and rural
and urban areas.
[11]
Between 1999 and 2008, the annualised
growth rates forGujarat (8.8%), Haryana (8.7%), or Delhi (7.4%)
were much higher than for Bihar (5.1%), Uttar Pradesh (4.4%),
or Madhya Pradesh(3.5%).
[12]
Poverty rates in rural Odisha (43%)
and rural Bihar (41%) are higher than in the world's poorest
countries such as Malawi.
[13]

Since the early 1950s, successive governments have implemented
various schemes, under planning, to alleviate poverty, that have
met with partial success. Programmes like Food for
work and National Rural Employment Programme have attempted
to use the unemployed to generate productive assets and build
rural infrastructure.
[14]
In August 2005, the Indian
parliament passed the Rural Employment Guarantee Bill, the
largest programme of this type, in terms of cost and coverage,
which promises 100 days of minimum wage employment to every
rural household in 200 of India's 600 districts. The Indian
government is planning to bring in more economic reforms which
can help farmers and unskilled labourers transition into
industrialized sectors.
Life expectancy in India by States in year 2003
[15]

STATE Total MALE FEMALE
Andhra Pradesh 63.1 61.6 64.1
Assam 57.2 57.1 57.6
Bihar 60.2 60.7 58.9
Gujarat 62.8 61.9 63.7
Haryana 64.5 64.1 65.0
Himachal Pradesh 65.6 65.1 65.8
Life expectancy in India by States in year 2003
[15]

STATE Total MALE FEMALE
Karnataka 64.0 62.4 65.5
Kerala 73.5 70.6 76.1
Madhya Pradesh 56.4 56.5 56.2
Maharashtra 65.8 64.5 67.0
Odisha 57.7 57.6 57.8
Punjab 68.1 66.9 69.1
Rajastan 60.5 59.8 60.9
Tamil Nadu 64.6 63.7 65.7
Uttar Pradesh 58.4 58.9 57.7
West Bengal 63.4 62.8 64.3
India 61.7 60.8 62.5
Physical infrastructure[edit]


Cheap and environment friendly public transport is seen as a
necessity for India's crowded and polluted metros.
[
Pictured here,
is the New Delhi Metro, operational since 2002 and seen as a
model for other metros.
Since independence, India has allocated nearly half of the total
outlay of the five-year plans for infrastructural development. Much
of the total outlay was spent on large projects in the area of
irrigation, energy, transport, communications and social
overheads. Development of infrastructure was completely in the
hands of the public sector and was plagued by corruption,
bureaucratic inefficiencies, urban-bias and an inability to scale
investment.
[16]
Calcutta city was the first city in India to boast of a
metro-system.Today the calcutta metro is considered among the
world's best in terms of service and infrastructure. India's low
spending on power, construction, transportation,
telecommunications and real estate, at $31 billion or 6% of GDP in
2002 has prevented India from sustaining a growth rate of around
8%. This has prompted the government to partially open up
infrastructure to the private sector allowing foreign
investment.
[14][17][18]
India holds second position in the world in
roadways' construction.
[19]

As of 31 December 2005, there were an estimated 835,000
broadband lines in India.
[20]
Low tele-density is the major hurdle
for slow pickup in broadband services. Over 76% of the
broadband lines were via DSL and the rest via cable modems.
A 2007 study by the Asian Development Bank showed that in 20
cities the average duration of water supply was only 4.3 hours per
day. No city had a continuous water supply. The longest duration
of supply was 12 hours per day in Chandigarh, and the lowest was
9 hours per day in Rajkot.
[21]

Regional imbalance[edit]
Main article: List of regions of India
One of the critical problems facing India's economy is the sharp
and growing regional variations among India's different states and
territories in terms of per capita income, poverty, availability of
infrastructure and socio-economic development. For instance, the
difference in growth rate between the forward and backward
states was 0.3% (5.2% & 4.9%) during 198081 to 199091, but had
grown to 3.3% (6.3% & 3.0%) during 199091 to 199798.
[22]
Per
Capita Income in India varies drastically. As of 2010, New Delhi
had a Per Capita Income of $ 3,020 whereas Bihar's Per Capita
Income was at a paltry $ 445.
The five-year plans have attempted to reduce regional disparities
by encouraging industrial development in the interior regions, but
industries still tend to concentrate around urban areas and port
cities. Even the industrial townships in the interiors, Bhilai for
instance, resulted in very little development in the surrounding
areas.
[23]
After liberalisation, the disparities have grown despite
the efforts of the union government in reducing them. Part of the
reason being that manufacturing and services and not agriculture
are the engines of growth. The more advanced states are better
placed to benefit from them, with infrastructure like well
developed ports, urbanisation and an educated and skilled
workforce which attract manufacturing and service sectors. The
union and state governments of backward regions are trying to
reduce the disparities by offering tax holidays, cheap land, etc.,
and focusing more on sectors like tourism, which although being
geographically and historically determined, can become a source
of growth and is faster to develop than other sectors.
[24][25]


The University of Mumbai, established 1857, is one of the three
oldest modern state universities in India.
Brahmin gurus imparted education by means of donations and
not through charging fees or funds from the students or their
guardians. Later, temples were also centres of education.
Religious education was compulsory but secular subjects were
also taught. Students were required to be brahmacharis or
celibates. The knowledge in these orders was often related to the
tasks a section of the society had to perform. The priest class,
the Brahmins, were imparted knowledge of religion, philosophy,
and other ancillary branches while the warrior class,
the Kshatriya, were trained in the various aspects of warfare. The
business class, the Vaishya, were taught their trade and the
working class of the Shudras was generally deprived of
educational advantages. The book of laws, theManusmriti, and the
treatise on statecraft the Arthashastra were among the influential
works of this era which reflect the outlook and understanding of
the world at the time.
Secular institutions cropped up along with Hindu temples, mutts
and Buddhist monasteries. These institutions imparted practical
education, e.g. medicine. A number of urban learning centres
became increasingly visible from the period between 500 BCE to
400 CE.The important urban centres of learning were Taxila (in
modern day Pakistan) and Nalanda in Bihar, among others. These
institutions systematically imparted knowledge and attracted a
number of foreign students to study topics such as Vedic and
Buddhist literature, logic, grammar, etc. Chanakya, a Brahmin
teacher, was among the most famous teachers of Takshasila,
associated with founding of Mauryan Empire.

FEATURES

A. Externalities
In a market economy there are important differences
between public and private goods. Private goods are
considered "rival and excludable" - one person consuming
a good means that another cannot, and those who do not
pay for the good/service are excluded from consuming
them. In contrast, public goods are non-rival and non-
excludable; multiple people can enjoy them simultaneously
and non-payers are not excluded. This creates what is
called the free-rider problem, an externality that means that
non-payers cannot be excluded from enjoying the good or
service.

Externalities can be positive or negative, and they are often
used as an example of where government interference in
the economy can do good. In all cases, externalities are
positive or negative effects that are not captured by the
normal price mechanism of a market economy. Companies
that pollute, for instance, do not pay anything extra for the
damage they do to the environment. Likewise, those who
work in their yard and beautify their neighborhoods may
increase property values for others with no direct
compensation back to them.

To deal with externalities, governments can use their
powers of taxation and subsidy. Taxation can be used to
impose costs on negative actions (negative externalities)
with an eye towards reducing the occurrence and/or using
the proceeds of the tax to remediate the damage done.
Likewise, a subsidy can encourage positive externalities to
continue and expand. In practice, however, there are
considerable inefficiencies to taxation and subsidies and
they rarely produce the desired effects in a cost-effective
manner.

Externalities are not the only reason that governments
impose taxes on their citizens. Taxes fund government
operations that range from the provision of collective
services (military and police services, courts, roads, etc.) to
a variety of transfer payments that are aimed at stabilizing
economic activity (unemployment insurance and earned
income credits) and reducing poverty. (For more on the
government use of taxes and spending, check out What The
National Debt Means To You.)

B. .Taxes
When considering taxes, it is important to understand the
difference between marginal and average tax
rates. Marginal rates refer to the tax rate in effect on the last
dollar earned, while the average tax rate is the product of
total taxes paid divided by total taxable income.

There are three major types of taxes in the U.S. tax
system. Progressive taxes result in higher average rates as
income increases; personal income tax is a common
example. Regressive taxesresult in lower average tax rates
as income falls; sales tax is commonly used as an
example.Proportional taxes maintain a constant rate
irrespective of income. (To learn how taxes started in the
US, see The History Of Taxes In The U.S.)

Implications of Taxation and Government Spending
Broadly speaking, fiscal policy is the use of taxation and
government spending for the purposes of macroeconomic
goals. Fiscal policy can be expansionary, that is aimed at
growing the economy and increasing employment,
or contractionary (aimed at slowing the growth of the
economy). Expansionary fiscal policy features increased
government spending and/or decreases in the tax rates,
while contractionary policy is the opposite (lower
government spending and/or higher tax rates).

Government economic actions are not without
consequences, however.

When governments increase their spending, crowding out
can occur government spending reduces available funds
and increases the cost of capital, leading many businesses
to abandon expansion projects. Likewise, when a
government spends in excess of receipts (a deficit) and
must borrow funds to finance that deficit, crowding out can
occur.

Likewise, taxation causes problems of its own. Taxes shift
the equilibrium for goods and services away from its
optimal level, therefore reducing consumer and producer
surpluses. This reduction is called the deadweight loss and
it basically represents the net benefit that is being
sacrificed by society because of the presence of the tax.
(For more on government spending, read Do Tax Cuts
Stimulate The Economy?)

Tariffs are levies charged by a government on imported
goods. Tariffs are not as significant to economies now as in
years past; prior to the implementation of personal income
taxes, tariffs were a major source of U.S. government
revenue. There are principally two kinds of tariffs. Revenue
tariffs are taxes levied on goods that are not produced
domestically, while protective tariffs are levied on goods
that are produced domestically.

As tariffs are essentially just a type of tax, there is
deadweight loss here as well consumers pay higher
prices and consume less, and lose some of their consumer
surplus in the process. At the same time, domestic
producers increase their output.

There are definite trade-offs between government spending
and taxing. Dollar for dollar, government spending has
more impact than reducing taxes. This occurs because
consumers almost never have a marginal propensity to
consume of "1" and almost always withhold a portion of
any tax cut and save it. (To learn more about tariffs, check
out The Basics Of Tariffs And Trade Barriers.)

C. Debt and Deficits
From a macroeconomic perspective, government debt can
be thought of as future spending brought forth into present
time. Governments incur debt when their spending desires
exceed their receipts from taxes and other income sources,
and that debt is ultimately repaid through a levy of taxes in
excess of current spending.

Government debt can become problematic through both a
crowding-out effect and through thedeadweight loss of
future taxation. When governments access debt markets,
they effectively crowd out other would-be borrowers (like
corporations) and force them to pay higher interest rates to
attract willing creditors. With the higher cost of capital that
results, corporations abandon or reject expansion plans
that would otherwise have a positive expected economic
return.

Governments have virtually no means of repaying debt
other than through future taxation. While there is a
multiplier effect to government spending, high levels of
government debt essentially saddle future generations with
the deadweight loss of higher taxation with no offsetting
multiplier to the GDP from government spending (as that
spending occurred years early.




























NATURE
ACKGROUND
Although agriculture contributes only 21% of Indias GDP, its
importance in the countrys economic, social, and political fabric
goes well beyond this indicator. The rural areas are still home to
some 72 percent of the Indias 1.1 billion people, a large number
of whom are poor. Most of the rural poor depend on rain-fed
agriculture and fragile forests for their livelihoods.
The sharp rise in foodgrain production during Indias Green
Revolution of the 1970s enabled the country to achieve self-
sufficiency in foodgrains and stave off the threat of famine.
Agricultural intensification in the 1970s to 1980s saw an increased
demand for rural labor that raised rural wages and, together with
declining food prices, reduced rural poverty.
Sustained, although much slower, agricultural growth in the 1990s
reduced rural poverty to 26.3 percent by 1999/00. Since then,
however, the slowdown in agricultural growth has become a
major cause for concern. Indias rice yields are one-third
of Chinas and about half of those in Vietnam and Indonesia. With
the exception of sugarcane, potato and tea, the same is true for
most other agricultural commodities.
The Government of India places high priority on reducing poverty
by raising agricultural productivity. However, bold action from
policymakers will be required to shift away from the existing
subsidy-based regime that is no longer sustainable, to build a
solid foundation for a highly productive, internationally
competitive, and diversified agricultural sector.
ISSUES AND CHALLENGES
Slow Down in Agricultural and Rural Non-Farm Growth: Both the
poorest as well as the more prosperous Green Revolution states
of Punjab, Haryana and Uttar Pradesh have recently witnessed a
slow-down in agricultural growth. Some of the factors hampering
the revival of growth are:
Poor composition of public expenditures: Public spending
on agricultural subsidies is crowding out productivity-
enhancing investments such as agricultural research and
extension, as well as investments in rural infrastructure,
and the health and education of the rural people. In
1999/2000, agricultural subsidies amounted to 3 percent of
GDP and were over 7 times the public investments in the
sector.
Over-regulation of domestic agricultural trade: While
economic and trade reforms in the 1990s helped to improve
the incentive framework, over-regulation of domestic trade
has increased costs, price risks and uncertainty,
undermining the sectors competitiveness.
Government interventions in labor, land, and credit
markets: More rapid growth of the rural non-farm sector is
constrained by government interventions in factor
markets -- labor, land, and credit -- and in output markets,
such as the small-scale reservation of enterprises.
Inadequate infrastructure and services in rural areas.
Weak Framework for Sustainable Water Management and
Irrigation:
Inequitable allocation of water: Many states lack the
incentives, policy, regulatory, and institutional framework
for the efficient, sustainable, and equitable allocation of
water.
Deteriorating irrigation infrastructure: Public spending in
irrigation is spread over many uncompleted projects. In
addition, existing infrastructure has rapidly deteriorated as
operations and maintenance is given lower priority.
Inadequate Access to Land and Finance:
Stringent land regulations discourage rural
investments: While land distribution has become less
skewed, land policy and regulations to increase security of
tenure (including restrictions or bans on renting land or
converting it to other uses) have had the unintended effect
of reducing access by the landless and discouraging rural
investments.
Computerization of land records has brought to light
institutional weaknesses: State government initiatives
to computerize land records have reduced transaction
costs and increased transparency, but also brought to light
institutional weaknesses.

Rural poor have little access to credit: While India has a
wide network of rural finance institutions, many of the rural
poor remain excluded, due to inefficiencies in the formal
finance institutions, the weak regulatory framework, high
transaction costs, and risks associated with lending to
agriculture.
Weak Natural Resources Management: One quarter of Indias
population depends on forests for at least part of their livelihoods.
A purely conservation approach to forests is
ineffective: Experience in India shows that a purely
conservation approach to natural resources management
does not work effectively and does little to reduce poverty.
Weak resource rights for forest communities: The forest
sector is also faced with weak resource rights and
economic incentives for communities, an inefficient legal
framework and participatory management, and poor access
to markets.
Weak delivery of basic services in rural areas:
Low bureaucratic accountability and inefficient use of
public funds: Despite large expenditures in rural
development, a highly centralized bureaucracy with low
accountability and inefficient use of public funds limit their
impact on poverty. In 1992, India amended its Constitution
to create three tiers of democratically elected rural local
governments bringing governance down to the villages.
However, the transfer of authority, funds, and functionaries
to these local bodies is progressing slowly, in part due to
political vested interests. The poor are not empowered to
contribute to shaping public programs or to hold local
governments accountable.





































ADVANTAGES
1. Higher living standards i.e. an increase in real income per
head of population
2. Employment effects - growth stimulates more jobs to help
new people as they enter the labour marketIn the long term,
an economy grows because technology gets better and we get
better at producing things. In the short term, growth is an
indication that the economy is producing as much as it could be
and resources are not being needlessly wasted. With a growing
population and rising wages, the economy has to grow to create
sufficient new jobs.Professor J on Von Reenan, LSEFiscal
dividend sustained GDP growth boosts tax revenues and
provides the government with extra money to improve
public services such as education and healthcare. It makes
it easier for a government to reduce the size of a budget
deficit
1. Investment - the accelerator effect - rising demand and
output encourages investment this sustains growth by
increasing long run aggregate supply
2. Consumer and business confidence - growth has a positive
impact on business profits & confidence. A stronger
economy will help to persuade consumers that the time is
right to make major purchases
3. Growth can also help protect the environment such as low-
carbon investment, innovation andresearch and
development, resulting in more efficient production
processes to reduce costs.Ethical
consumerism and corporate social responsibility has
become important in recent years.

















Virtuous circle of growth



























DISADVANTAGES
There are economic and social costs of a fast-expanding
economy.
Inflation risk: If demand races ahead of aggregate supply the
scene is set for rising prices. Many fast growing developing
countries have seen high rates of inflation in recent years, a good
example is India
Working hours sometimes there are fears that a fast-growing
economy places increasing demands on the hours that people
work and can upset work-life balance
Structural change although a growing economy will be creating
more jobs, it also leads to structural changes in the pattern of
jobs. Some industries will be in decline whilst others will be
expanding. Structural unemployment can rise even though it
appears that a country is growing the labour force needs to be
occupationally mobile.
Environmental concerns:
Fast growth can create negative externalities for example
higher levels of noise pollution and lower air quality arising
from air pollution and road congestion
Increased consumption of de-merit goods which damages
social welfare
It can leads to a huge increase in household and industrial
waste which again creates external costs for society
Growth that leads to environmental damage may lower
the sustainable rate of growth. Examples include the destruction
of rain forests through deforestation, the over-exploitation of fish
stocksand loss of natural habitat and bio-diversity created
through the construction of new roads, hotels, retail malls and
industrial estates.
Deforestation releases more CO2 into the atmosphere each year
than all of the world's planes, trains and automobiles put together.
Globally, an area almost the size of England and Wales is cut
down every year releasing billions of tons of CO2 into the
atmosphere.
Under this programme top priority has been assigned to the
people living below poverty line (BPL). The Government has
renewed its commitment to improve the standard of living
especially of the poors by assuring employment, ameliorating
poverty, increasing food grain production and reducing income
disparities



ROLE
Leakage
The direct income for an area is the amount of tourist expenditure
that remains locally after taxes, profits, and wages are paid
outside the area and after imports are purchased; these
subtracted amounts are called leakage. In most all-inclusive
package tours, about 80% of travelers' expenditures go to the
airlines, hotels and other international companies (who often have
their headquarters in the travelers' home countries), and not to
local businesses or workers. In addition, significant amounts of
income actually retained at destination level can leave again
through leakage.
A study of tourism 'leakage' in Thailand estimated that 70% of all
money spent by tourists ended up leaving Thailand (via foreign-
owned tour operators, airlines, hotels, imported drinks and food,
etc.). Estimates for other Third World countries range from 80% in
the Caribbean to 40% in India.
Source: Sustainable Living
Of each US$ 100 spent on a vacation tour by a tourist from a
developed country, only around US$ 5 actually stays in a
developing-country destination's economy. The figure below
shows how the leakage happens.

There are two main ways that leakage occurs:
Import leakage
This commonly occurs when tourists demand standards of
equipment, food, and other products that the host country cannot
supply. Especially in less-developed countries, food and drinks
must often be imported, since local products are not up to the
hotel's (i.e. tourist's) standards or the country simply doesn't have
a supplying industry. Much of the income from tourism
expenditures leaves the country again to pay for these imports.
The average import-related leakage for most developing countries
today is between 40% and 50% of gross tourism earnings for
small economies and between 10% and 20% for most advanced
and diversified economies, according to UNCTAD.
Even in developed regions, local producers are often unable to
supply the tourism industry appropriately even if good will is
present: the 64-room hotel "Kaiser im Tirol" in Austria, an award-
winning leader in sustainable practices, cannot find organic food
suppliers in the local farming networks in the appropriate
quantity, quality and reliability, as production cycles and
processes are not compatible with its needs.
Source: Austrian Preparatory Conference for the International
Year of Ecotourism, September 2001
Export leakage
Multinational corporations and large foreign businesses have a
substantial share in the import leakage. Often, especially in poor
developing destinations, they are the only ones that possess the
necessary capital to invest in the construction of tourism
infrastructure and facilities. As a consequence of this, an export
leakage arises when overseas investors who finance the resorts
and hotels take their profits back to their country of origin.
A 1996 UN report evaluating the contribution of tourism to
national income, gross levels of incomes or gross foreign
exchange, found that net earnings of tourism, after deductions
were made for all necessary foreign exchange expenditures, were
much more significant for the industry. This report found
significant leakage associated with: (a) imports of materials and
equipment for construction; (b) imports of consumer goods,
particularly food and drinks; (c) repatriation of profits earned by
foreign investors; (d) overseas promotional expenditures and (e)
amortization of external debt incurred in the development of
hotels and resorts. The impact of the leakage varied greatly
across countries, depending on the structure of the economy and
the tourism industry. From the data presented in this study on the
Caribbean, St. Lucia had a foreign exchange leakage rate of 56%
from its gross tourism receipts, Aruba had 41%, Antigua and
Barbuda 25% and J amaica 40%.
Source: Caribbean Voice
Enclave tourism
Local businesses often see their chances to earn income from
tourists severely reduced by the creation of "all-inclusive"
vacation packages. When tourists remain for their entire stay at
the same cruise ship or resort, which provides everything they
need and where they will make all their expenditures, not much
opportunity is left for local people to profit from tourism.
The Organization of American States (OAS) carried out a survey
of Jamaica's tourist industry that looked at the role of the all-
inclusives compared to other types of accommodation. It found
that 'All-inclusive hotels generate the largest amount of revenue
but their impact on the economy is smaller per dollar of revenue
than other accommodation subsectors.'
It also concluded that all-inclusives imported more, and employed
fewer people per dollar of revenue than other hotels. This
information confirms the concern of those who have argued that
all-inclusives have a smaller trickle-down effect on local
economies. (Source: Tourism Concern)
The cruise ship industry provides another example of economic
enclave tourism. Non-river cruises carried some 8.7 million
international passengers in 1999. On many ships, especially in the
Caribbean (the world's most popular cruise destination with 44.5%
of cruise passengers), guests are encouraged to spend most of
their time and money on board, and opportunities to spend in
some ports are closely managed and restricted.
Other negative impacts
Infrastructure cost
Tourism development can cost the local government and local
taxpayers a great deal of money. Developers may want the
government to improve the airport, roads and other infrastructure,
and possibly to provide tax breaks and other financial
advantages, which are costly activities for the government. Public
resources spent on subsidized infrastructure or tax breaks may
reduce government investment in other critical areas such as
education and health.
Increase in prices
Increasing demand for basic services and goods from tourists will
often cause price hikes that negatively affect local residents
whose income does not increase proportionately. A San
Francisco State University study of Belize found that, as a
consequence of tourism development, the prices for locals
increased by 8%.
Tourism development and the related rise in real estate demand
may dramatically increase building costs and land values. Not
only does this make it more difficult for local people, especially in
developing countries, to meet their basic daily needs, it can also
result in a dominance by outsiders in land markets and in-
migration that erodes economic opportunities for the locals,
eventually disempowering residents. In Costa Rica, close to 65%
of the hotels belong to foreigners. Long-term tourists living in
second homes, and the so-called amenity migrants (wealthy or
retired people and liberal professionals moving to attractive
destinations in order to enjoy the atmosphere and peaceful
rhythms of life) cause price hikes in their new homes if their
numbers attain a certain critical mass.
Economic dependence of the local community on tourism
Diversification in an economy is a sign of health, however if a
country or region becomes dependent for its economic survival
upon one industry, it can put major stress upon this industry as
well as the people involved to perform well. Many countries,
especially developing countries with little ability to explore other
resources, have embraced tourism as a way to boost the
economy.
In The Gambia, for instance, 30% of the workforce depends
directly or indirectly on tourism. In small island developing states,
percentages can range from 83% in the Maldives to 21% in the
Seychelles and 34% in Jamaica, according to the WTO. Over-
reliance on tourism, especially mass tourism, carries significant
risks to tourism-dependent economies. Economic recession and
the impacts of natural disasters such as tropical storms and
cyclones as well as changing tourism patterns can have a
devastating effect on the local tourism sector.
Malta has only 380,000 residents, but received 1.2 million tourists
in 1999. As 25% of GDP (and indirectly 40% ), tourism generated
more than $650 million in foreign exchange earnings. Malta's high
dependence on tourism and a limited number of export products
makes its trade performance vulnerable to shifts in international
demand.
Source: Washington Times
Other industry impacts affecting tourism
Economic crises, like the Asian crisis that hit Thailand, Malaysia
and Indonesia a few years ago, can be devastating to inbound
tourism flows. The financial turmoil triggered a sharp fall in
tourism flows to affected countries during 1997 and 1998. In the
Philippines, the crisis and the temporary closure of Philippine
Airlines affected inbound arrivals significantly as there was a
decline of almost 3.3% in 1998.
Source: Hotel-online



















OBJECTIVE
1. Removal of Poverty:-For eradication of poverty assured
employment at the local level under the NREGA will be
provided by strengthening and involving the different levels
of PRIs and cooperative institution. It is aimed to provide
shelter to shelterless households, necessary agricultural
infrastructure support and Kisan Credit Cards to farmers
and cover all BPL and PTGs under Jan Shree Bima Scheme.
2. Quality Improvement in Living Standard:-Emphasis is laid
on important programmes like potable drinking water in
rural areas, health services, immunization, two children
planned family, extension of mother-child welfare centres,
development of slums by providing facilities envisaged in
Seven Point Charter. plantation, solid and liquid waste
management etc.
3. Social Programmes:-Proper justice to the people belonging
to Scheduled Castes and Scheduled Tribes, Jan Shree Bima
Coverage to each PTG family, ensure non transfer of land
belonging to STs, participation of women in Panchayati
Raj/Local Self Bodies, youth welfare, rural sports, NSS
camping, development of cultural based programmes etc.
have been included in this category. Nutrition to children
upto 6 years of age, pregnant women and lacting mothers is
being provided through Aanganwadis, primary education
under Education for All is also being ensured.
4. Welfare Programmes:-Simplification of Govt. procedural
rules and make the administration more responsive and
accountable, keep vigilance on the implementation of
schemes at different levels and quick redressal of public
grievances is the aim of this program. To make available
information pertaining schemes under E-Governance and
ensure coverage of other Backwards and Minority
Communities is also aimed at.
5. Sanitation Programme:-Under this, individual and
community latrines in rural areas, urban based
infrastructural facilities under JNNURM in urban areas,
solid and liquid based management and siver and lake
development programmes, are being implemented.
6. Scope of the Programme:-The Programme envisages
extension of facilities like education, health, sanitation,
cultural development. In short, this is a further
improvement over 20PP, 1986 thus making it more balanced
for inclusive development justifying the goal of
Development with Social Justice.






































CASE STUDY
Population growth has long been a concern of the government,
and India has a lengthy history of explicit population policy. In the
1950s, the government began, in a modest way, one of the earliest
national, government-sponsored family planning efforts in the
developing world. The annual population growth rate in the
previous decade (1941 to 1951) had been below 1.3 percent, and
government planners optimistically believed that the population
would continue to grow at roughly the same rate.
Implicitly, the government believed that India could repeat the
experience of the developed nations where industrialization and a
rise in the standard of living had been accompanied by a drop in
the population growth rate. In the 1950s, existing hospitals and
health care facilities made birth control information available, but
there was no aggressive effort to encourage the use of
contraceptives and limitation of family size. By the late 1960s,
many policy makers believed that the high rate of population
growth was the greatest obstacle to economic development. The
government began a massive program to lower the birth rate from
forty-one per 1,000 to a target of twenty to twenty-five per 1,000 by
the mid-1970s. The National Population Policy adopted in 1976
reflected the growing consensus among policy makers that family
planning would enjoy only limited success unless it was part of
an integrated program aimed at improving the general welfare of
the population. The policy makers assumed that excessive family
size was part and parcel of poverty and had to be dealt with as
integral to a general development strategy. Education about the
population problem became part of school curriculum under the
Fifth Five-Year Plan (FY 1974-78). Cases of government-enforced
sterilization made many question the propriety of state-sponsored
birth control measures, however.
During the 1980s, an increased number of family planning
programs were implemented through the state governments with
financial assistance from the central government. In rural areas,
the programs were further extended through a network of primary
health centers and subcenters. By 1991, India had more than
150,000 public health facilities through which family planning
programs were offered (see Health Care, this ch.). Four special
family planning projects were implemented under the Seventh
Five-Year Plan (FY 1985-89). One was the All-India Hospitals Post-
partum Programme at district- and subdistrict-level hospitals.
Another program involved the reorganization of primary health
care facilities in urban slum areas, while another project reserved
a specified number of hospital beds for tubal ligature operations.
The final program called for the renovation or remodelling of
intrauterine device (IUD) rooms in rural family welfare centers
attached to primary health care facilities.
Despite these developments in promoting family planning, the
1991 census results showed that India continued to have one of
the most rapidly growing populations in the world. Between 1981
and 1991, the annual rate of population growth was estimated at
about 2 percent. The crude birth rate in 1992 was thirty per 1,000,
only a small change over the 1981 level of thirty-four per 1,000.
However, some demographers credit this slight lowering of the
1981-91 population growth rate to moderate successes of the
family planning program. In FY 1986, the number of reproductive-
age couples was 132.6 million, of whom only 37.5 percent were
estimated to be protected effectively by some form of
contraception. A goal of the seventh plan was to achieve an
effective couple protection rate of 42 percent, requiring an annual
increase of 2 percent in effective use of contraceptives.
The heavy centralization of India's family planning programs often
prevents due consideration from being given to regional
differences. Centralization is encouraged to a large extent by
reliance on central government funding. As a result, many of the
goals and assumptions of national population control programs
do not correspond exactly with local attitudes toward birth
control. At the Jamkhed Project in Maharashtra, which has been
in operation since the late 1970s and covers approximately 175
villages, the local project directors noted that it required three to
four years of education through direct contact with a couple for
the idea of family planning to gain acceptance. Such a timetable
was not compatible with targets. However, much was learned
about policy and practice from the Jamkhed Project. The
successful use of women's clubs as a means of involving women
in community-wide family planning activities impressed the state
government to the degree that it set about organizing such clubs
in every village in the state. The project also serves as a pilot to
test ideas that the government wants to incorporate into its
programs. Government medical staff members have been sent to
Jamkhed for training, and the government has proposed that the
project assume the task of selecting and training government
health workers for an area of 2.5 million people.
Another important family planning program is the Project for
Community Action in Family Planning. Located in Karnataka, the
project operates in 154 project villages and 255 control villages.
All project villages are of sufficient size to have a health
subcenter, although this advantage is offset by the fact that those
villages are the most distant from the area's primary health
centers. As at Jamkhed, the project is much assisted by local
voluntary groups, such as the women's clubs. The local voluntary
groups either provide or secure sites suitable as distribution
depots for condoms and birth control pills and also make
arrangements for the operation of sterilization camps. Data
provided by the Project for Community Action in Family Planning
show that important achievements have been realized in the field
of population control. By the mid-1980s, for example, 43 percent
of couples were using family planning, a full 14 percent above the
state average. The project has significantly improved the status of
women, involving them and empowering them to bring about
change in their communities. This contribution is important
because of the way in which the deeply entrenched inferior status
of women in many communities in India negates official efforts to
decrease the fertility rate.
Studies have found that most couples in fact regard family
planning positively. However, the common fertility pattern in India
diverges from the two-child family that policy makers hold as
ideal. Women continue to marry young; in the mid-1990s, they
average just over eighteen years of age at marriage. When women
choose to be sterilized, financial inducements, although helpful,
are not the principal incentives. On average, those accepting
sterilization already have four living children, of whom two are
sons.
The strong preference for sons is a deeply held cultural ideal
based on economic roots. Sons not only assist with farm labor as
they are growing up (as do daughters) but they provide labor in
times of illness and unemployment and serve as their parents'
only security in old age. Surveys done by the New Delhi
Operations Research Group in 1991 indicated that as many as 72
percent of rural parents continue to have children until at least
two sons are born; the preference for more than one son among
urban parents was tabulated at 53 percent. Once these goals have
been achieved, birth control may be used or, especially in
agricultural areas, it may not if additional child labor, later adult
labor for the family, is deemed desirable.
A significant result of this eagerness for sons is that the Indian
population has a deficiency of females. Slightly higher female
infant mortality rates (seventy-nine per 1,000 versus seventy-eight
per 1,000 for males) can be attributed to poor health care,
abortions of female fetuses, and female infanticide. Human rights
activists have estimated that there are at least 10,000 cases of
female infanticide annually throughout India. The cost of
theoretically illegal dowries and the loss of daughters to their in-
laws' families are further disincentives for some parents to have
daughters. Sons, of course continue to carry on the family line
(see Family Ideals, ch. 5). The 1991 census revealed that the
national sex ratio had declined from 934 females to 1,000 males in
1981 to 927 to 1,000 in 1991. In only one state--Kerala, a state with
low fertility and mortality rates and the nation's highest literacy--
did females exceed males. The census found, however, that
female life expectancy at birth had for the first time exceeded that
for males.
India's high infant mortality and elevated mortality in early
childhood remain significant stumbling blocks to population
control (see Health Conditions, this ch.). India's fertility rate is
decreasing, however, and, at 3.4 in 1994, it is lower than those of
its immediate neighbors (Bangladesh had a rate of 4.5 and
Pakistan had 6.7). The rate is projected to decrease to 3.0 by 2000,
2.6 by 2010, and 2.3 by 2020.During the 1960s, 1970s, and 1980s,
the growth rate had formed a sort of plateau. Some states, such
as Kerala, Tamil Nadu, and, to a lesser extent, Punjab,
Maharashtra, and Karnataka, had made progress in lowering their
growth rates, but most did not. Under such conditions, India's
population may not stabilize until 2060.









































CONCLUSION
Standard of living of life are often referred to in discussions
about the economic and social well-being of countries and their
residents, but what is the difference between the two? The
definitions of these terms can be difficult to tease apart and may
overlap in some areas, depending on whom you ask. It's more
than just a matter of semantics; in fact, knowing the difference
can affect how you evaluate a country where you might be looking
to invest some money.Standard of living generally refers to the
level of wealth, comfort, material goods and necessities available
to a certain socioeconomic class, in a certain geographic area. An
evaluation of standard of living commonly includes the following
factors:

































BIBLIOGRAPHY
Bernstein, Barton J. Politics and Policies of the Truman
Administration. Chicago: Quadrangle Books, 1970.
Barach, Arnold B. USA and its Economic Future. New York,
Macmillan Company, 1964.
Chalmers, David, And the Crooked Places Made
Straight Baltimore: The Johns Hopkins University Press, 1991.
Latham, Earl. The Meaning of McCarthyism. Lexington: DC Heath
and Company, 1973.
Meyerowitz, Joanne, Not June Cleaver Philadelphia: Temple
University Press, 1994.
Pach, Chester J. and Richardson, Elmo. The Presidency of Dwight
D. Eisenhower Kansas: University of Kansas Press, 1991.
Vatter, Harold G. The U.S. Economy in the 1950s. Westport,
Connecticut: Greenwood Press, 1963.