12 Finance Commission of India

 

The Twelfth Finance Commission  was appointed under the chairmanship of C. Rangarajan on November 1, 2002 to make recommendations regarding the distribution between the Union and the States of net proceeds of shareable taxes, the principles which should govern the grants- in-aid of the revenues of States from the Consolidated Fund of India and the measures needed to augment the Consolidated Fund of a State to supplement the resources of local bodies in the State on the basis of the recommendations made by the Finance Commission of the State.

 

Recommendations of the Twelfth Finance Commission

Restructuring public finances

  • Centre and States to improve the combined tax-GDP ratio to 17.6 per cent by 2009-10.
  • Combined debt-GDP ratio, with external debt measured at historical exchange rates, to be brought down to 75 percent by 2009-10.
  • Fiscal deficit to GDP targets for the Centre and States to be fixed at 3 per cent.
  • Revenue deficit of the Centre and States to be brought down to zero by 2008-09.
  • Interest payments relative to revenue receipts to be brought down to 28 per cent and 15 per cent in the case of the Centre and States, respectively.
  • States to follow a recruitment policy in a manner so that the total salary bill, relative to revenue expenditure, net of interest payments, does not exceed 35 per cent.
  • Each State to enact a fiscal responsibility legislation providing for elimination of revenue deficit by 2008-09 and reducing fiscal deficit to 3 per cent of State Domestic Product.
  • The system of on-lending to be brought to an end over time. The long term goal should be to bring down debt-GDP ratio to 28 per cent each for the Centre and the States.

Sharing of Union tax revenues

  •  The share of States in the net proceeds of shareable Central taxes fixed at 30.5 per cent, treating additional excise duties in lieu of sales tax as part of the general pool of Central taxes. Share of States to come down to 29.5 per , when States are allowed to levy sales tax on sugar, textiles and tobacco.
  • In case of any legislation enacted in respect of service tax, after the notification of the eighty eighth amendment to the Constitution, revenue accruing to a State should not be less than the share that would accrue to it, had the entire service tax proceeds been part of the shareable pool.
  • The indicative amount of overall transfers to States to be fixed at 38 per cent of the Centre’s gross revenue receipts.

Local bodies

  • A grant of Rs.20,000 crore for the Panchayati Raj institutions and Rs.5,000 crore for urban local bodies to be given to States for the period 2005-10.
  • Priority to be given to expenditure on operation and maintenance (O&M) costs of water supply and sanitation, while utilizing the grants for the Panchayats. At least 50 per cent of the grants recommended for urban local bodies to be earmarked for the scheme of solid waste management through public-private partnership.

Calamity relief

  •  The scheme of Calamity Relief Fund (CRF) to continue in its present form with contributions from the Centre and States in the ratio of 75:25. The size of the Fund worked out at Rs.21,333 crore for the period 2005-10.
    The outgo from the Fund to be replenished by way of collection of National Calamity Contingent Duty and levy of special surcharges.
  • The definition of natural calamity to include landslides, avalanches, cloud burst and pest attacks.
    Provision for disaster preparedness and mitigation to be part of State Plans and not calamity relief.

Grants-in-aid to States

  •  The present system of Central assistance for State Plans, comprising grant and loan components, to be done away with, and the Centre should confine itself to extending plan grants and leaving it to States to decide their borrowings.
  • Non-plan revenue deficit grant of Rs.56,856 crore recommended to 15 States for the period 2005-10. Grants amounting to Rs.10,172 crore recommended for the education sector to eight States. Grants amounting to Rs.5,887 crore recommended for the health sector for seven States. Grants to education and health sectors are additionalities over and above the normal expenditure to be incurred by States.
  • A grant of Rs.15,000 crore recommended for roads and bridges, which is in addition to the normal expenditure of States.
  • Grants recommended for maintenance of public buildings, forests, heritage conservation and specific needs of States are Rs. 500 crore, Rs.1,000 crore, Rs.625 crore, and Rs.7,100 crore, respectively.

Fiscal reform facility

  •  With the recommended scheme of debt relief in place, fiscal reform facility not to continue over the period 2005-10.

Debt relief and corrective measures

  •  Central loans to States contracted till March,2004 and outstanding on March 31, 2005 amounting to Rs.1,28,795 crore to be consolidated and rescheduled for a fresh term of 20 years, and an interest rate of 7.5 per cent to be charged on them. This is subject to enactment of fiscal responsibility legislation by a State.
  • A debt write-off scheme linked to reduction of revenue deficit of States to be introduced. Under this scheme,
    repayments due from 2005-06 to 2009-10 on Central loans contracted up to March 31,2004 will be eligible for write- off.
  • Central Government not to act as an intermediary for future lending to States, except in the case of weak States,
    which are unable to raise funds from the market.
  • External assistance to be transferred to States on the same terms and conditions as attached to such assistance by external funding agencies.
  • All the States to set up sinking funds for amortization of all loans.
  • States to set up guarantee redemption funds through earmarked guarantee fees.

Others

  •  The Centre should share ‘profit petroleum’ from New Exploration and Licensing Policy (NELP) areas in the ratio of 50:50 with States where mineral oil and natural gas are produced. No sharing of profits in respect of nomination fields and non-NELP blocks.
  • Every State to set up a high level committee to monitor the utilization of grants recommended by the TFC.
    Centre to gradually move towards accrual basis of accounting.

Source:Ministry of Finance

CR Formula

C. Rajagopalachari’s formula (or C. R. formula or Rajaji formula) was a proposal formulated by Chakravarthi Rajagopalachari to solve the political deadlock between the All India Muslim League and Indian National Congress on independence of India from the British. C. Rajagopalachari, a Congress leader from Madras, devised a proposal for the Congress to offer the League the Muslim Pakistan based onplebiscite of all the peoples in the regions where Muslims made a majority. Although the formula was opposed even within the Congress party,Gandhi used it as his proposal in his talks with Jinnah in 1944. However, Jinnah rejected the proposal and the talks failed.
The CR formula entailed
i. The League was to endorse the Indian demand for independence and to co-operate with the Congress in formation of Provisional Interim Government for a transitional period.
ii. At the end of the War, a commission would be appointed to demarcate the districts having a Muslim population in absolute majority and in those areas plebiscite to be conducted on all inhabitants (including the non-Muslims) on basis of adult suffrage.
iii. All parties would be allowed to express their stance on the partition and their views before the plebiscite.
iv. In the event of separation, a mutual agreement would be entered into for safeguarding essential matters such as defence, communication and commerce and for other essential services.
v. The transfer of population, if any would be absolutely on a voluntary basis.
vi. The terms of the binding will be applicable only in case of full transfer of power by Britain to Government of India.

 

Concept of Developing, Emerging and Developed countries.

 

In 1978, the World Bank, for the first time, constructed an analytical country classification system. The occasion was the launch of the World Development Report. Annexed to the report was a set of World Development Indicators (WDI), which provided the statistical underpinning for the analysis. The first economic classification in the 1978 WDI divided countries into three categories: (1) developing countries, (2) industrialized countries, and (3) capital-surplus oil-exporting countries. Developing countries were categorized as low- income (with GNI/n of US$250 or less) and middle-income (with GNI/n above US$250).

Major Characteristics of Developing Countries are:-

  1.  Lower per-capita income
  2.  Low levels of human capital
  3. High levels of poverty and under-nutrition
  4. Higher population growth rates
  5. Predominance of agriculture and low levels of industrialization
  6. Low level of urbanization but rapid rural-to-urban migration
  7. Dominance of informal sector
  8. Underdeveloped labor, financial, and other markets.

Major Characteristics of Emerging Countries are:-

  1. the small size of the economy,
  2. GNP/Capita much lower than in developed countries,
  3. a reduced opening for accepting foreign investors,
  4. a high volatility of the exchange rate which implies greater risk in trading.

Major Characteristics of Developed Countries are:-

  1. Average income per capita of the population is generally high.
  2. Education level of high average population.
  3. Life expectancy of the population average height.
  4.  Population growth rate per year is relatively small.
  5. The death rate per year is relatively small population.
  6. Life-style market economy.
  7. His wide and varied field.
  8. Economic activity in most industry sectors, as well as export commodities.
  9. The majority of the population lives in cities.
  10. Relatively high level of population health.

Integration of Princely States

Integration of Princely States

Under the plan of 3 June, more than 562 princely states were given the option of joining either India or Pakistan, or choosing independence. Indian nationalists and large segments of the public feared that if these states did not accede, most of the people and territory would be fragmented. The Congress as well as senior British officials considered Patel the best man for the task of achieving unification of the princely states with the Indian dominion.

Patel asked v.p.menon a senior civil servant with whom he had worked over the partition of India to become his right-hand as chief secretary of the States Ministry. On 6 May 1947, Patel began lobbying the princes, attempting to make them receptive towards dialogue with the future Government and trying to forestall potential conflicts. Patel used social meetings and unofficial surroundings to engage most monarchs, inviting them to lunch and tea at his home in Delhi At these meetings, Patel stated that there was no inherent conflict between the Congress and the princely order. Nonetheless, he stressed that the princes would need to accede to India in good faith by 15 August 1947.

Patel invoked the patriotism of India’s monarchs, asking them to join in the freedom of their nation and act as responsible rulers who cared about the future of their people. He persuaded the princes of 565 states of the impossibility of independence from the Indian republic, especially in the presence of growing opposition from their subjects.

He proposed favorable terms for the merger, including creation of privy purses for the descendants of the rulers. While encouraging the rulers to act with patriotism, Patel did not rule out force, setting . deadline of 15 August 1947 for them to sign the instrument of accession document. All but three of the states willingly merged into the Indian union—only Jammu and Kashmir, junagadh and Hyderabad did not fall into basket.

Integration of Junagadh: The West Gujarat known as Saurastra constituted a number of small states which did not have much potential from the point of view of economic and political independence. In all, 327 such States existed in Gujarat. Sardar succeeded in bringing the small states together and it was a very important step towards national solidarity although the states were in theory free to choose whether they wished to accede to India or Pakistan, Mountbatten had pointed out that “geographic compulsions” meant that most of them must choose India.

In effect, he took the position that only the states that shared a border with Pakistan could choose to accede to it. The Nawab of Junagadh, a princely state located on the south-western end of Gujarat and having no common border with Pakistan, chose to accede to Pakistan ignoring Mountbatten’s views, arguing that it could be reached from Pakistan by sea. The rulers of two states that were subject to the suzerainty of Junagadh— Mangrol and Babariawad—reacted to this by declaring their independence from Junagadh and acceding to India. In response, the Nawab of Junagadh militarily occupied the states. The rulers of neighboring states reacted angrily, sending their troops to the Junagadh frontier and appealed to the Government of India for assistance.

A group of Junagadhi people, led by Samaldas Gandhi, formed a government-in-exile, the Aarzi Hukumat (“temporary government”). India believed that if Junagadh was permitted to go to Pakistan, the communal tension already simmering in Gujarat would worsen, and refused to accept the accession. The government pointed out that the state was 80% Hindu, and called for a plebiscite to decide the question of accession. Simultaneously, they cut off supplies of fuel and coal to Junagadh, severed air and postal links, sent troops to the frontier, and reoccupied the principalities of Mangrol and Babariawad that had acceded to India.

Pakistan agreed to discuss a plebiscite, subject to the withdrawal of Indian troops, a condition India rejected. On 26 October, the Nawab and his family fled to Pakistan following clashes with Indian troops. On 7 November, Junagadh’s court, facing collapse, invited the Government of India to take over the State’s administration. The Government of India agreed.

A plebiscite was conducted in February 1948, which went almost unanimously in favour of accession to India.

Kashmir conflict: Kashmir was also a problem. At the time of the transfer of power, Kashmir was ruled by Maharaja Hari Singh, a Hindu, although the state itself had a Muslim majority. Hari Singh was equally hesitant about acceding to either India or Pakistan, as either would have provoked adverse reactions in parts of his kingdom. He signed a Standstill Agreement with Pakistan and proposed one with India as well, but announced that Kashmir intended to remain independent. However, his rule was opposed by Sheikh Abdullah, the popular leader of Kashmir’s largest political party, the National Conference, who demanded his abdication.

Pakistan, attempting to force the issue of Kashmir’s accession, cut off supplies and transport links. The chaos in Punjab resulting from Partition had also severed transport links with India, meaning that Kashmir’s only links with the two dominions was by air. Rumours about atrocities against the Muslim population of Poonch by the Maharajah’s forces caused the outbreak of civil unrest. Shortly thereafter, Pathan tribesmen from the North-West Frontier Province of Pakistan crossed the border and entered Kashmir. The invaders made rapid progress towards Srinagar. The Maharaja of Kashmir wrote to India, asking for military assistance.

India required the signing of an Instrument of Accession and setting up an interim government headed by Sheikh Abdullah in return. The Maharaja complied, but Nehru declared that it would have to be confirmed by a plebiscite, although there was no legal requirement to seek such confirmation. Indian troops secured Jammu, Srinagar and the valley itself during the First Kashmir War, but the intense fighting flagged with the onset of winter, which made much of the state impassable.

Prime Minister Nehru, recognizing the degree of international attention brought to bear on the dispute, declared a ceasefire and sought UN arbitration, arguing that India would otherwise have to invade Pakistan itself, in view of its failure to stop the tribal incursions. The plebiscite was never held, and on 26 January 1950, the Constitution of India came into force in Kashmir, but with special provisions made for the state. India did not, however, secure administrative control over all of Kashmir. The northern and western portions of Kashmir came under Pakistan’s control in 1947, and are today Pakistan-administered Kashmir. In the 1962 Sino-Indian War, China occupied Aksai Chin.

Hyderabad Operation Polo: Sardar’s greatest role in the integration of states was his able handling of the Hyderabad crisis. Most of the states acceded to India, Hyderabad was a landlocked state that stretched over 82,000 square miles (over 212,000 square kilometres) in southeastern India. While 87% of its 17 million people were Hindu, its ruler Nizam Osman Ali Khan was a Muslim, and its politics were dominated by a Muslim elite. The Muslim nobility and the Ittehad-ul-Muslimeen, a powerful pro-Nizam Muslim party, insisted Hyderabad remain independent and stand on an equal footing to India and Pakistan. Accordingly, the Nizam in June 1947 issued a firman announcing that on the transfer of power, his state would be resuming independence. The situation deteriorated further in 1948. The Razakars (“volunteers”), a militia affiliated to the Ittehad-ul-Muslimeen and set up under the influence of Muslim radical Qasim Razvi, assumed the role of supporting the Muslim ruling class against upsurges by the Hindu populace, and began intensifying its activities and was accused of attempting to intimidate villages.

The Hyderabad State Congress Party, affiliated to the Indian National Congress, launched a political agitation. Matters were made worse by communist groups, which had originally supported the Congress but now switched sides and began attacking Congress groups. Attempts by Mountbatten to find a negotiated solution failed and, in August, the Nizam, claiming that he feared an imminent invasion, attempted to approach the UN Security Council and the International Court of Justice.

India  now insisted that if Hyderabad was allowed to continue its independence, the prestige of the Government would be tarnished and then neither Hindus nor Muslims would feel secure in its realm. The date for the attack was fixed as 13 September, even though General Sir Roy Bucher, the Indian chief of staff, had objected on grounds that Hyderabad would be an additional front for the Indian army after Kashmir.

On 13 September, the Indian Army was sent into Hyderabad under Operation Polo on the grounds that the law and order situation there threatened the peace of South India. The troops met little resistance and between 13 and 18 September took complete control of the state. The Nizam was retained as the head of state in the same manner as the other princes who acceded to India.He thereupon disavowed the complaints that had been made to the UN and, despite vehement protests from Pakistan and strong criticism from other countries, the Security Council did not deal further with the question, and Hyderabad was absorbed into India.

Other States: Regarding the accession of the other states, Sardar acted like a magic-stick. In no time, he could merge the States of Orissa, Chhatishgarh, Rajasthan, Punjab and so on. He realized that the people of states were supreme and by organizing the States’, people for establishment of popular government, he could achieve success. He had, with him, able workers and supporters who had worked untiringly to bring such a merger in record time. There are innumerable instances where Sardar could bring down the rulers of the States to terms and agree them to accession to India as per the terms and conditions stipulated by the Government of India. Sardar had to deal with diversified Kings having different attitude with caution and applying varied, human, social, political and psychological approach.

Arunachal Pradesh Horticulture

Arunachal Pradesh being a land of Undulating topography and varied agro-climatic conditions offer vast potential for the development of Horticulture for growing varieties of tropical, sub-tropical and temperate fruits, vegetable including off season vegetables), spices, aromatic and medicinal plants flowers and mushroom. The fruits being perennial in nature help in checking soil erosion and provide high density green cover to the soil.

Horticulture is the backbone and future of rural economy.  The practice of shifting cultivation has various adverse effect on ecology and poses silting problems in the plains as millions of tonnes of soil is eroded and washed down through rain water depleting the nutrient status of soils of the hills every year. To check the erosion it is essential to cover such area by perennial and other suitable crops of economic importance so that rural people may get employment and generate income through such ventures.

Horticulture Zones

  • Foothills and Valleys ( 170-915 Mtr. Altitudes)– potential area in hectares is 145000 hectares. Crops cultivated are Citrus, Guava, Banana, Mango. Litchi, Pine apple, Sapota, Jackfruit, Papaya, Plum, Pear, etc. seasonal vegetables.

 

  • Mid Hills (915-1803 Mtr)- potential area in hectares is 140,000 hectares. Crops cultivated are Apples, Plum, Apricot, Pear, Almond, Low Chilling apple, Pomegranate, Olive, Grapes, etc. seasonal vegetables for seed, and truck gardening.

 

 

  • High Hills (above 1830 Mtr.)- Potential area in hectares is 145000 hectares. Crops cultivated are Apples, Cherry, Walnut, Chestnu, Peanut, Pomegranate, etc. off season vegetables and production of temperate vegetable seeds.

 

  • Rain shawow area below 40” annual rainfall (with wide range of chilling requirement and temperature)- potential area in hectares is 31000 hectares. Crops cultivated are Apple, Pear, Plum, Preach, Apricot, Almond, Walnut, Pomegranate, etc. off season vegetables.

 

Horticulture – purpose it can serve

  • To provide better nutrition to people through fruits, vegetables for their own consumption and sale for cash income.
  • To support inducted population through perishable commodities for administrative centres, model village institutions, defence and para military installations.
  • To provide additional income to small and marginal farmers through vegetables and quick growing fruits like Banana, Papaya, Guava, Lime etc.
  • To select existing indigenous material for seedling root stock, use and trails.
  • To replace abandoned Jhums by suitable fruit trees & plantation cover.
  • To provide increasing rate of tree cover and improve ecology and environment.
  • To provide better water retention capacity and perennial water sources in tree plantation areas.
  • To eliminate destruction of biomass under the wasteful practice of slash burn (Jhum).
  • To explore possibilities and develop projects for import substitution and export development production.

What needs to be done

  • ensure quality planting material of Horticulture crops.
  • Reduction in losses through the development of suitable infrastructure and creation of awareness.
  • Establishment of market system having forward and backward linkage.
  • Development of quality plants and seeds.
  • Development of quality testing laboratory.
  • Skillful and efficient transfer of technology.
  • Application of information technology in Horticulture.
  • Ensure credit support and risk management.

 

Various Schemes for Development of  Horticulture

  • Control of shifting cultivation.
  • Maintenance of Farm of Nurseries.
  • Kitchen gardening and Floriculture.
  • Horticulture Fair & Exhibition.
  • Mushroom Development Programme.
  • Fruit Preservation.
  • Kiwi Cultivation.

Technology mission for the integrated development of horticulture in Arunachal Pradesh

Owing to diverse agro-climatic condition horticulture has been   identified as main activity for development in the state. Mission mode programme having and to go and approach is vital for achieving desired goal. Accordingly Technology Mission for Integrated Development  of Horticulture was mooted for establish convergence and synergy among numerous ongoing governmental programme in the field of horticulture development to achieve horizontal and vertical integration of these programmes.

 

 

Continental Drift Theory – Tectonics

 

The continental drift theory is the theory that once all the continents were joined in a super-continent, which scientists call Pangaea. Over a vast period of time, the continents drifted apart to their current locations. Alfred Wegener first supported continental drift.

Wegener’s explanation of continental drift in 1912 was that drifting occurred because of the earth’s rotation. Fossil records from separate continents, particularly on the outskirts of continents show the same species.

Institutional Factors of Agriculture (1) Land Tenure and Land Tenancy (ii) Land Holding

Institutional Factors of Agriculture

(1) Land Tenure and Land Tenancy

(ii) Land Holding

LAND REFORMS IN INDIA

The basic objective of land reform is to do social justice with the tillers, land owners, landless labourers, and rural community with the set objective to provide security to the cultivators, to fix a rational rent, the conferment of title to the tiller and to increase the agricultural productivity.The entire concept of land reforms aims at the abolition of intermediaries and bringing the actual cultivator in direct contact with the state.

The scheme of land reforms includes:

  • abolition of intermediaries,and
  • tenancy reforms, i.e. regulation of rent, security of tenure for tenants, and confirmation of ownership on them
  • ceiling on land holdings and distribution of surplus land to landless labourers and small farmers,
  • agrarian reorganization including consolidation of holdings and prevention of subdivision and fragmentation,
  • organisation of co-operative farms, and
  • improvement in the system of land record keeping.

Abolition of Intermediaries

Mahalwari System

Ryotwari System

Tenancy Reforms

Rent Control

Ceiling of Landholdings

Consolidation of Holdings

  • Consolidation of holdings means to bring together in compact block, all the fields of land of a farmer which are well scattered in different parts of the village.
  • Under the scheme, all land in the village is first pooled into one compact block and it is divided into smaller blocks called chaks, and allotted to individual farmer.
  • This is a useful scheme which helped in overcoming the problem of fragmentation of holdings.
  • But unfortunately, the scheme has not been implemented in all the states of the country.
  • There are many hurdles in the implementation of consolidation of holdings in some of the states.

Computerized Land Records

  • The centrally sponsored scheme on computerization of land records was started in 1988-89.
  • At present, the scheme has been implemented in 582 districts out of the 640 districts of the country, leaving those districts where there are no proper land records.

 

Directive Principles of State Policy

An important feature of the constitution is the Directive Principles of State Policy. Although the Directive Principles are asserted to be “fundamental in the governance of the country,” they are not legally enforceable. Instead, they are guidelines for creating a social order characterized by social, economic, and political justice, liberty, equality, and fraternity as enunciated in the constitution’s preamble.

Article 37 of the Constitution declares that the DPSP “shall not be enforceable by any court, but the principles therein laid down are nevertheless fundamental in the governance of the country and it shall be the duty of the state to apply these principles in making laws.” It is not a mere coincidence that the apparent distinction that is drawn by scholars between the ICCPR rights and ESC rights holds good for the distinction that is drawn in the Indian context between fundamental rights and DPSP. Thus the bar to justiciability of the DPSP is spelled out in some sense in the Constitution itself.

The Directive Principles may be classified into 3 broad categories—

  1. Socialistic
  2. Gandhian and
  3. Liberal-intellectual.

(1) Socialistic Directives

Principal among this category of directives are (a) securing welfare of the people (Art. 38) (b) securing proper distribution of material resources of the community as to best sub serve the common-good, equal pay for equal work, protection of childhood and youth against exploitation. etc. (Art.39), (c) curing right to work, education etc. Art. (41), (d) securing just and humane conditions of work and maternity relief (Art. 42) etc.

(2) Gandhian Directives

Such directives are spread over several Arts. Principal among such directives are (a) to organize village panchayats (Art. 40), (b) to secure living wage, decent standard of life, and to promote cottage industries (Art.43), (c) to provide free and compulsory education to all children up to 14 years of age (Art. 45), (d) to promote economic and educational interests of the weaker sections of the people, particularly, the scheduled castes and scheduled tribes, (e) to enforce prohibition of intoxicating drinks and cow-slaughter and to organize agriculture and animal husbandry on scientific lines (Arts. 46-48).

(3) Liberal intellectual directives

Principal among such directives are (a) to secure uniform civil code throughout the country (Art.44), (b) to separate the judiciary from the executive (Art.50),  (c) to protect monuments of historic and national importance and  (d) to promote international peace and security.

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