Naxalism/Left Wing Extremism

World View:

• the Red Army Faction or Baader Meinhof Gang in the former West Germany

• the Red Brigades in Italy,

• the 17 November Movement in Greece,

• the Shining Path of Peru,

• Peoples Revolutionary Army and the Motoneros of Argentina.

• The Maoist groups in India and Nepal

Overview:

• PM calls it as "India's single largest internal security Problem"

• 8,000 people have been killed between 2001 and 2012.

• Govt estimates of Maoist forces : 15000-20000 army, atleast 40% of them are women; avg age in high teens and low twenties.

• Various estimates suggest Maoist rebels could number up to 40,000. Of these, thousands may be armed with weapons ranging from AK-47s to light machine-guns raided from police stations or bought from dealers in Nepal. The cadre mostly comprises farmers, landless labourers, tribals and the extremely poor, including women and children.

• The Indian government, led by the United Progressive Alliance, banned the CPI (Maoist) under the Unlawful Activities (Prevention) Act (UAPA) as a terrorist organisation

• Naxalites have been charged by the government with running an extortion economy in the guise of a popular revolution, extorting vast amounts of money from local branches of mining companies and other businesses

Origin:

• The peasant movement in Andhra Pradesh just after India’s independence was a precursor to the rise of Maoist thought. But it was an attack on a tribal man in the Naxalbari village of West Bengal on March 2, 1967 that sparked the violent, extremist left-wing movement.The Communist Party of China hailed the movement as the “Spring Thunder of India”.

• The Communist Party of India (Maoist) is an ultra-leftist political party in India which aims to overthrow the government of India through people's war and to establish a class-less society; ‘seizure of power’ through an agrarian revolution. Eight articles written by Charu Majumdar  at this time—known as the Historic Eight Documents—have been seen as providing their ideological foundation: arguing that revolution must take the path of armed struggle on the pattern of the Chinese revolution.

• Groups occupied vacant lands in parts of Naxalbari, Khoribari and Phansidewa police station areas of Siliguri sub-division on the plea that such lands were in excess of the permissible ceiling on land holdings

• The Naxalite movement spread in the West Bengal State as a wildfire and particularly the urban elite youth and the bhadralok class got attracted to it.

• the extremist faction could not mobilise people for further organised militant activities because govt. arranged redressal of the long-standing grievances, especially in respect of the hapless and poor tea garden labourers and landless or marginal farmers.

• 1972 : Death of Charu Majumdar

• A police research paper says the movement was subdued for two decades till 1991.

• Various splinter groups of Naxalites started resurfacing in various parts of India during the early 1980s. Thus, the Naxalites of Andhra Pradesh regrouped as the CPI-ML (Peoples’ War Group/ PWG); likewise the Bihar Naxalites rechristened themselves as the Maoist Communist Centre (MCC). Of all the newly organised Naxalite groups, the CPI-ML (PWG) turned out to be the most active not only in Andhra Pradesh but also in Orissa, in the tribal belt (Bastar-Dandakaranya) of Madhya Pradesh (now mostly in the State of Chhattisgarh) and Maharashtra, causing considerable violence in these States.

• In Bihar : greatest adversary was not so much the administration and the police but the armed gangs (senas) of the landlord class - the Ranbir Sena, the Bhumihar Sena; instead of assuming the characteristics of class struggle as propagated by Maoist ideologues, the skirmishes took the shape of caste warfare.

• Later reincarnated as the Maoist movement since 2004 : barring a few splinter groups, Naxalites have largely completed their process of merger and consolidation with the formation of the CPI (Maoist) on 21 September 2004

Questions:

• What is India's Maoist challenge all about?--Ideological challenge to the very foundation of Indian state.-challenges the very edifice of Parliamentary democracy and constitutionalism

• How are the objectives of Maoist challenge to be accomplished? They hope to accomplish these objectives not through Gandhian methods or Ideological debates, but by the stride of violence and terror as fundamental instruments

• Where is this challenge most visible?

1. It started off in a small village called Naxalbhari;
2. 70s saw Maoist challenge in Urban areas; Today it is predominantly and overwhelmingly rural.
3. Geography of this challenge : Mostly Central India; Mineral Rich areas, Forest Rich Areas and Tribal dominated areas with Bihar(everything is related to caste-lower castes and under-classes have been mobilised) as an exception;
4. 88/620 districts are classified as LW extremism affected. {8 in AP, 2 in MH, 10 in MP, 10 in CH,17 in JK 18 in OR, 3 in UP, 11 in Bihar and 3 in WB}  500-600 Gram panchayats are badly affected

• Who are the foot soldiers of this Movt.?

1. Leadership is 99% from AP; Telugu is Lingua-Franca of Maoist Leadership
2. Majority of Foot soldiers are tribals but few exceptions.
3. Tribal participation b/c of 4Ds tribal Displacement(from their land), Deprivation(of their rights), Disconnect(from the mainstream) and Discontent(with the Govt.)

• Why has this grown?

• Once it was confined to 6-7 districts(of AP) in 70s and 80s after demise of Urban oriented Naxalbhari movt.
• factors : (Way our Political economy and Administration works)

1. Political Neglect of this issue (Eg: No political party in India can afford to ignore Dalit issues; They are central to India's electoral fortunes (300 constituencies). Similarly Muslim populations(can affect 200 constituencies). Tribals no more than 50 constituencies). Tribal vote is not central to electoral performance.Dalits and Muslims live with other communities which is not the case of Tribals. This has affected the nature of political mobilization of political parties. Sankaran Cmt. condemns Maoist violence for its focus on military actions rather than on the mobilization of people for social transformation.
2. Mining contributed to misery of Tribals. Tribal areas to the policy makers are simply mineral rich areas. (Ecological unsustainability & Social devastation has contributed to their discontent). Poor regions in the world are invariably mineral rich regions(Eg: Applachian mountains, Russia, Australia, China). The way extraction industry operates environmentally or socially doesn't lead to prosperity of the locals but it certainly leads to prosperity of outsiders. 40% of the total population displaced post-independence due to development have been tribals ie nearly 10-15 Million. At times they are subjected to not just one displacement but to multiple displacements.Our track record of land acquisition, Rehabilitation is pathetic.
3. Insensitive Forest Administration : First symbol of Government in Forest Areas is Forest Guard. Forest Guard is armed with Indian Forest Act of 1927. 1000s of tribals in Jharkhand, Chattisgarh are jailed on flimsy charges of collecting items of daily existence. 2006 : Forest Rights Act was enacted. But Forest Bureaucracy continued its hostility towards it.

• What are we doing to deal with this?

1. our first and instinctive response was to expand our security operations; Today 70000 para-military forces in 88 districts, 30000 local police
2. Lately from Security only approach(Security Response) to Security Plus approach (+Development Response)
3. Some security successes to integrate these areas with mainstream societies.

• Missing pieces of our strategy and what needs to be done?

• We end up having Half-hearted responses if we don't recognize this as an ideological challenge & Development Challenge
• Fundamental requirement is Political response(Where Political parties are weak, Maoists are strong and vice-versa).  There is a political impasse (classic case of "immovable object" meeting "irresistable force")

1. India's Response to Maoists(P.Chidhambaram): "Do not give up arms, Do not give up Ideology, Do not disband your cadres, Come for Dialogue";
2. Political conditions that Maoists want(Comrade Ganapati gave his 3 conditions in an interview ) : All out war has to be withdrawn, For any kind of democratic work the ban on party and mass organization has to be lifted, illegal detention & torture of comrades has to be stopped and released. If these demands are met, then the same leaders who are released would lead and represent the party in talks.
3. Ultimate solution to Maoist problem is political. We defeated militancy in Punjab politically. We defeated insurgency in Mizoram,Tripura politically(insurgent Pu Laldenga now is CM of Mizoram; Similarly Prafulla Kumar Mahanta of AGP(Asom Gana Parishad)). 155 militants belonging to four groups surrendered in Manipur boosting the peace initiative

• Restitution and Reconciliation on past injustices. The facts that injustices have been perpetrated is undenial.

• Expansion of institutional space for other organizations (ie engaging Civil Society). Constitution of Peace seekers and Gandhian organizations. Multiple tracks of engagement and find out via-media

• Conclusion : The tragedy of our society is it required Maoists to wake India up to Tribal predicament.

Approach:

• On Security Front

1. 1908s in AP : Police operations created a sense of insecurity among sections of the Maoist cadres which prompted them to resort to brutal murders and tortures of villagers on the slightest suspicion of being police informers. This created alienation of Naxalites from locals. Victories of Greyhounds against Naxals with substantial support from locals in Nallamala forest areas.
2. Treat Naxalism as a national problem(the way Central government engaged themselves, with all the force and strength, in Punjab and Jammu & Kashmir). Information dissemination and intelligence gathering is the Key.
3. "There should be one centre from where all information regarding naxalism should be disseminated to the States"
4. Designing proper SOPs(Standard Operating Procedures) to avoid casualties
5. There is debate over involving the army and the air force to drive out Maoists hiding in dense forests.
6. AP's special police force "Greyhounds" role in recent Sukhma encounter in Chattisgarh.Usage of UAV(Unmanned aerial vehicles) to track the movements of maoist cadres.
7. Chattisgarh : the creation of resistance groups from amongst the tribal people known as the Salwa Judum or Special Police Officers(SPOs)
8. Their arsenal now boasts of self-loading rifles (SLRs), AK series of rifles and INSAS rifles. It is believed that currently the Maoists have also gained access to the technology of fabricating rockets and rocket launchers.

• On Developmental Front

1. Challenges of Naxalism can be understood in ecological terms of Forests, people and livelihoods which due to to our failure to address, have grown up to emergent state in such areas.Unless we understand the ecological basis of conflicts and evolution of local/regional terrorism we often fail to find sustainable ceasefire solutions
2. Improving security situation through Participatory development based on inclusive governance; lapses in enforcing PESA,Forest Rights act resulted in deteriorating situation in 5th Scheduled areas
3. AP's WHAM(Winning hearts and Minds) strategy to fight Maoist forces.

• Measures to preserve integrity and sovereignty

1. strengthening of Rule of Law. Conviction rate for Terror crimes is quite low since tribals(refuse to become witnesses) are engulfed in fear.Tribals are picked up randomly and remain for four, five, six years in jail as undertrials. The judicial process is slow and families suffer, they get frustrated. Maoists campaign that innocents are kept in jail for no reason.
2. Fostering respect for human rights and provision for reparation for violations
3. reversing ethnic(NE insurgency), national and religious discrimination(Kashmir issue, communal riots), political exclusion(Regional movts like Telangana) and socio-economic marginalisation(backward regions).
4. listening to people and becoming more responsive to society.

• Negotiation/ Peace Talks:

• "I would rather listen to them than fight. A lot of times, they have got legitimate grievances packaged as political positions" - Roger Fisher, Negotiation Guru
• Physical safety of Naxals is an impeding factor (How can a banned party negotiate without lifting the ban)
• Political structures need to build confidence by dialogue; Acts of terror contain the seeds of rejection of political structures.
• High profile Kidnaps : Sukma district collector in chattisgarh, Italian tourists in Odisha. Capturing hostages is believed to be the only way for naxalites to the govt. to lend them their ears. Collector and tourists happened to be there when they were looking for a hostage to communicate their demands to govt.
• CCC(Cmt for concerned citizens) convened 1994 Andhra Peace talks

1. earned legitimacy in dealing the issue impartially
2. But failed to design a realistic agenda

• The Andhra Pradesh government initiated peace talks in 2004 but the ceasefire did not hold for long. The Maoists made an offer in 2010 but the central government rejected it.
• By the end of 2012 : GOI important move towards negotiations. Promise to put up CMG(Crisis mgmt. groups) - teams to negotiate hostage situation in LW Extremist states. Can CMG address the root of the problem?

1. CMG must be prepared for two realistic issues Naxals are known to rise

• Release of imprisoned Maoists or the return of tribal land occupied by Non-tribals(direct and tangible demand - cost-benefit analysis can be applied)
• Involving underlying needs and perceived injustices that drive their movt.

1. Such skills should be taught based on Principal negotiation techniques "Never start negotiate the demands, start with needs and wants underlying them"; Need active listening that doesn't come naturally to conflicting parties; "Give and Take based on needs not on demands"
2. CMG needs to anticipate the potential challenges to its implementation in order to avoid failed promises of the past (Eg: CCC)

• Imprisoned Maoists be brought under police custody to negotiate on behalf of the party rather than roping Civil society who are removed from realities of Parties interests.

Affected Regions:

• Eastern Highlands : From "Pasupati"(Pasupathinath temple in Nepal) to "Tirupati"
• mostly active in what has come to be known as the “red corridor” from Andhra Pradesh in the south to West Bengal in the east. But they do have some sort of presence in 21 out of 28 states in India.
• In some areas, Maoists run their own people’s court (62 Jan Adalats were held last year) and levy taxes on traders.

Debate:

• 2008 : Bandhopadhyay cmt report on "Development Challenges in Extremist-affected areas"
• Initially, it was discrimination ,oppression, and landlordism (essentially Feudal order) that gave rise to naxalism; and now alienation of tribals from their natural habitat is driving it.
• The feeling of 'parentless' (Discontent with the Govt.)makes people vulnerable to anti-state ideologies(Tribals in MP eat Kesari Dal which has paralytic effect)
• SC made an observation " the whole issue of development appears to be so simple, logical and commonsensical. And Yet, to the millions of Indians, development is a dreadful and hateful word that is aimed at denying them even the source the sustenance. It is cynically said that on the path of 'maldevelopment' almost every step that we take seems to give rise to insurgency and political extremism"
• Just society cannot be created through unjust and inhuman means.. The outcomes of strategies which are built around bloodshed, vengeance, repression and hate will always ultimately be brutal and unjust, even if the violence is undertaken for lofty ideals.

Recent initiatives and case studies:

• central government has a Naxal Management Division that provides funds, additional security forces, logistics and coordinates between states.

• Integrated Action Plan(IAP) - to increase inter-state coordination

1. in 88 identified districts.
2. All the resources like planning, intelligence, etc., should integrate [to fight Naxalism].
3. There should be one centre from where all information regarding Naxalism should be disseminated to the States.
4. There should be some long-term strategy, which will be decided together. So far, there is no success in this coordination
5. Extension for 4 more years.
6. Physical Infra facilities like school buildings, anganwadi centers, rural roads, panchayat buildings, community halls and irrigation works were given priority where as social investment in health care, Sanitation and water supplies is very less
7. now under consideration for merging into BRGF
8. Is CAP part of IAP?
9. Payment of MGNREGA wages in cash has been allowed under IAP for selected tribal and backward districts to obviate payment delays where outreach of banks/post-offices is inadequate.

• Implementation of IAP.

1. Rural Development Min. wants to do that through local bodies where as Home Min. wants to carry it through District admin which will help in increasing the credibility of Govt. in tribal areas.
2. Existing model : 30 crore/district through a 3-membered district-level cmt(District Magistrate, SP, District Forest Officer).
3. Home and Finance ministries are in favour of existing model while PC and Rural Development ministry are advocating to spend atleast half of the amount through local bodies and representatives. Home ministry pointed out that in most villages local bodies are either missing or lying defunct, while in some places panchayat members were either cooperating with Naxals or were not helping local admin. due to fear of Maoists.

• Army recruitment to keep youths off Maoism.

• Programme "Roshini" in 24 most critical LW extremism affected districts.

1. Provides beneficiaries aged between 18-35 years with requisite training for the trade or job chosen through public-private partnerships in the fields of tailoring, construction, mobile repairing, nursing and retail.
2. Pro-actively covers Particularly Vulnerable Tribal Groups(PVTGs) on priority basis.
3. Funded by Central and state govts. in the ratio of 75:25
4. Similar to "Himayat" being run in J&K

• CAP (Civic Action Programme):

1. allows CAPFs(Central Armed Paramilitary Forces) to carry out developmental programmes in 9 LWE affected states under the project "Winning Hearts and Minds" by spending on physical and social infrastructure.
2. It was tweaked to make it "individual-oriented" rather than "project oriented" as this approach will help in bridging the gap b/n locals and security personnel more efficiently.

Banking sector in India

Commercial Banks: Commercial Bank may be defined as the financial institutions that deals with deposit and advances of a business organization [RBI is not a commercial bank]. These are of three type:

• Public Sector Bank ( 19 GoI undertaking + 1 IDBI + 1 SBI + 5 SBI Associate)

• Private Sector Bank (ICICI,YES,AXIS etc whose head office is in India)

• Foreign Banks (HSBC,BANK OF AMERICA etc whose head office is overseas)

Assets and Liabilities: for a bank asset is advances (loans) and liabilities is deposits.

Types of deposit: 

• Term Deposit (That is open for a particular time period e.g. FD)

• Demand Deposit (Current Account Saving Account)

Repo Rate: Repo rate is a measure to control the flow of money supply in the market. It is a rate at which Central Bank (RBI) lends funds to commercial banks. Regulated by RBI.
Reverse Repo Rate: it is a rate at which banks parks their access money with RBI. Regulated by RBI.  (Repo Rate -1) 
CRR( Cash Reserve Ration): The portion of the bank’s net time and demand liabilities that is to be maintained with RBI is CRR. Regulated by RBI.
SLR (Statuary Liquidity Ration): The portion of the bank’s net time and demand liabilities that is to be maintained with Bank in the form of liquid (that is easily encashable like gold or government bond or securities) is SLR. Regulated by RBI.
How much a bank can lend for advances: Suppose total income =100. Than SLR =23 CRR =4 to be reserved. Rest 73 can be given as advances.

Note1: Reducing any rate means flowing the money in the market. Increasing any is vice versa.
Note2: Repo and Reverse repo are also called as liquidity adjustment facility (absorption and infusion of money; repo is infusion and reverse repo is absorption) If repo is increased bank will borrow money at high rate and also bank will lend the money to customer at higher rate and vice versa.

Supply of money:

RBI  --       <----Banks----Customer-----Market

RBI lends money to banks banks lends to customer, customer invests in market.
If supply of money is in access purchasing power will increase for customer (Because if you have money you will invest it somewhere or you will purchase any goods). Purchasing power increases means inflation increases. So RBI increases the rate. And vice versa.


Priority Sector Lending:
Priority sector refers to those sectors of the economy which may not get timely and adequate credit in the absence of this special dispensation. Typically, these are small value loans to farmers for agriculture and allied activities, micro and small enterprises, poor people for housing, students for education and other low income groups and weaker sections.

Priority Sector includes the following categories:
(i) Agriculture
(ii) Micro and Small Enterprises
(iii) Education
(iv) Housing
(v) Export Credit

Nostro and Vostro Account:  Nostro account is account maintained in a foreign bank by domestic bank. Vostro account is account maintained in domestic bank of a foreign bank.

Non Performing Assets (NPA):  Any bank asset(advance or loans) of which principal and interest amount is not repaid for a certain period of time is called Non Performing Assets. Generally if principal of an asset is not repaid in 90 days or interest is not repaid in 180 days the asset is classified as non performing asset (NPA).

Real time Gross Settlement(RTGS): The acronym 'RTGS' stands for Real Time Gross Settlement, which can be defined as the continuous (real-time) settlement of funds transfers individually on an order by order basis (without netting). 'Real Time' means the processing of instructions at the time they are received rather than at some later time; 'Gross Settlement' means the settlement of funds transfer instructions occurs individually (on an instruction by instruction basis). Considering that the funds settlement takes place in the books of the Reserve Bank of India, the payments are final and irrevocable.
National Electronic Fund Transfer: National Electronic Funds Transfer (NEFT) is a nation-wide payment system facilitating one-to-one funds transfer. Under this Scheme,  individuals, firms and corporates can electronically transfer funds from any bank branch to any individual, firm or corporate having an account with any other bank branch in the country participating in the Scheme.

Note1: For transferring the funds through RTGS and NEFT the bank branches should be RTGS and NEFT enabled as the case may be.
Note2: Limit for NEFT: no minimum or maximum limit however PAN card is mendatory for NEFT remittance for more than 50,000). For RTGS minimum limit is 2,00,000 but there is no upper limit.

Base Rate: It is a minimum interest rate below which bank can not lend [advances/loans] to customer. It is determined by banks themselves.

SWIFT: Society for Worldwide Inter-bank Financial Telecommunication is a messaging system through which financial messages pass from one financial institute to other financial institute. It is a internationally acceptable financial messaging system. For ant messaging through SWIFT a bank must have a SWIFT code. It is helpful in forex transaction.

IFSC: IFSC or Indian Financial System Code is an alpha-numeric code that uniquely identifies a bank-branch participating in the NEFT system. This is an 11 digit code with the first 4 alpha characters representing the bank, and the last 6 characters representing the branch. The 5th character is 0 (zero). IFSC is used by the NEFT system to identify the originating / destination banks / branches and also to route the messages appropriately to the concerned banks / branches. It is used for domestic transaction in India.

Electronic Clearing System (ECS): ECS is an electronic mode of payment / receipt for transactions that are repetitive and periodic in nature. ECS is used by institutions for making bulk payment of amounts towards distribution of dividend, interest, salary, pension, etc., or for bulk collection of amounts towards telephone / electricity / water dues, cess / tax collections, loan installment repayments, periodic investments in mutual funds, insurance premium etc. Essentially, ECS facilitates bulk transfer of monies from one bank account to many bank accounts or vice versa.
ECS Credit is used by an institution for affording credit to a large number of beneficiaries (for instance, employees, investors etc.) having accounts with bank branches at various locations within the jurisdiction of a ECS Centre by raising a single debit to the bank account of the user institution. ECS Credit enables payment of amounts towards distribution of dividend, interest, salary, pension, etc., of the user institution.
ECS Debit is used by an institution for raising debits to a large number of accounts (for instance, consumers of utility services, borrowers, investors in mutual funds etc.) maintained with bank branches at various locations within the jurisdiction of a ECS Centre for single credit to the bank account of the user institution. ECS Debit is useful for payment of telephone / electricity / water bills, cess / tax collections, loan installment repayments, periodic investments in mutual funds, insurance premium etc., that are periodic or repetitive in nature and payable to the user institution by large number of customers etc.
Functions of RBI :
Monetary Authority:

• Formulates, implements and monitors the monetary policy.

• Objective: maintaining price stability and ensuring adequate flow of credit to productive sectors.

Regulator and supervisor of the financial system:

• Prescribes broad parameters of banking operations within which the country''s banking and financial system functions.

• Objective: maintain public confidence in the system, protect depositors'' interest and provide cost-effective banking services to the public.

• Regulator and supervisor of the payment systems   

1. Authorises setting up of payment systems
2. Lays down standards for operation of the payment system
3. Issues direction, calls for returns/information from payment system operators.

Manager of Foreign Exchange

• Manages the Foreign Exchange Management Act, 1999.

• Objective: to facilitate external trade and payment and promote orderly development and maintenance of foreign exchange market in India.

Issuer of currency:

• Issues and exchanges or destroys currency and coins not fit for circulation.

• Objective: to give the public adequate quantity of supplies of currency notes and coins and in good quality.

Developmental role:

• Performs a wide range of promotional functions to support national objectives.

Related Functions:

• Banker to the Government: performs merchant banking function for the central and the state governments; also acts as their banker.

• Banker to banks: maintains banking accounts of all scheduled banks.

Other Name of RBI:
Banker’s Bank
Government’s bank
Lender of the last Resort
Central Bank
Manager of foreign exchange

RBI Guidelines for Issuing Licence to Nw banks in private sectors:

Following are the highlights of the Reserve Bank of India's guidelines for licensing of new banks in the private sector:

• Corporates, PSUs and NBFCs can set up a bank.

• No bar on entities in sectors like brokerage, realty Minimum paid-up equity capital to be Rs. 500 crore.

• New banks to get listed within 3 years of business.

• Foreign shareholding limited to per cent for first 5 years.

• RBI to seek feedback on applicants' background from other regulators, Income Tax, CBI and ED.

• Licence seeker should have 10 years of successful financial track record, sound credentials and integrity.

• To comply with priority sector lending targets; open at least 25 per cent branches in unbanked rural areas.

• Boards to have majority of independent directors.

• Business plan should be realistic, viable and address financial inclusion.            

Railway Budget 2015-16: Major Initiatives

Railway Minister Suresh Prabhu on 26 February 2015 presented the Railway Budget 2015-16 in the Lok Sabha. The Budget plans to invest around 8 lakh crore rupees over the next 5 year to rejuvenate the Indian Railways.

In this regard, Railway Budget 2015 – 16 unveiled certain initiatives ranging from cleanliness drive to development of infrastructure to improving the overall quality of life in train journeys.

The major initiatives undertaken in the Railway Budget 2015-16

Station Redevelopment

• Zonal and Divisional offices to be empowered for quicker decision making
• Development of 10 Satellite Railway terminals in major cities with twin purpose of decongesting the city and providing service to suburban passengers

Network expansion

• Fast-track sanctioned works on 7000 kms of double/third/fourth lines
• Commission of 1200 km of network in 2015-16 at an investment of 8686 crore rupees

Expansion of freight handling capacity

• Transport Logistics Corporation of India (TRANSLOC), to be set up for developing common user facilities to provide end-to-end logistics solution at select Railway terminals through Public Private Partnerships.
• Policy for Private Freight Terminals (PFT) to be revised.
• Automatic Freight Rebate Scheme for traffic to be expanded
• Long haul freight operations to be used extensively and construction of long loop lines to be expedited.

Improving train speed

• Speed of 9 railway corridors to be increased from existing 110 and 130 kmph to 160 and 200 kmph respectively.
• Average speed of freight trains in empty and loaded conditions will be enhanced to 100 kmph for empty freight trains and 75 kmph for loaded trains.

Bullet train

• Feasibility study for High Speed Rail between Mumbai-Ahmadabad is in advanced stage.

Upgrading manufacturing capability

• Creation of job opportunities by upgrading the manufacturing capability and review of functioning of Indian Railways Production Units.
• Workshops for technological upgradation and enhancing productivity be undertaken to make them self-sustaining.

Safety

• RDSO to develop a suitable device with reliable power supply system based on theft-proof panels/batteries in consultation with Indian Space Research Organization using geo-spatial technology.
• Train Protection Warning System and Train Collision Avoidance System to be installed on selected routes at the earliest.  
• Better welding techniques being promoted and digital type machines to replace analogue type machines.

Technology upgradation

• Constitution of an innovation council called Kayakalp for business re-engineering.  
• Technology portal being constituted to invite innovative technological solutions.
• Research Centers to be set up in selected universities for fundamental research.

Partnerships for development

• PPP cell to be revamped to make it result oriented. Foreign Rail Technology Cooperation scheme to be launched.
• Joint ventures to be set up with States for focused project development, resource mobilization, land acquisition and monitoring of critical rail projects.  

Improvements to Management Processes and Systems

• Systems audit to be conducted for review of all processes and procedures.
• Constitution of a working group to modify present system of accounting, to ensure tracking of• expenditure to desired outcomes and Train operations to be audited.
• Paperless working in material management system to be expanded and Vendors to be integrated through Vendor Interface Management System.

Resource Mobilisation

• Support from the Central Government for 41.6 percent of the Plan and Internal generation of 17.8  percent for setting up of a Financing Cell in the Railway Board.
• Setting up an infrastructure fund, a holding company and a Joint Venture with an existing NBFC of a PSU with IRFC for raising long term debt from domestic as well as overseas sources.
• Digitized mapping of land records and responsibility fixing for encroachments.
• New strategy to tap latent advertising potential including offering stations and trains for corporate branding.  
• Railways in partnership with ports will deliver rail connectivity to Nargol, Chharra, Dighi, Rewas and Tuna. Scrap disposal policy to be reviewed for speedier scrap disposal.

Human Resources

• Human Resource Audit to be undertaken; Separate accounting head for HRD; ERP based Human Resource Management System.  
• Setting up a full-fledged University during 2015-16 and  Improved delivery of health services to employees

Energy and sustainability

• Environment Directorate to be constituted in Railway Board to give increased focus on environment management.
• Initiative likely to save at least 3000 crore rupees in next few years will be taken up.  1000 MW solar plants will be set up by the developers on Railway/private land.
• Water conservation mission will include water audit and expansion of water harvesting systems. 100 DEMUs to be enabled for dual fuel- CNG and diesel.
• Noise levels of locos to be at par with international norms and concerns related to wildlife will be addressed.  

Transparency and Governance initiatives

• System of on-line applications introduced for two categories of recruitment as a pilot project.  
• All possible solutions be explored to address menace of corruption. E-procurement value chain to be expanded.

Social initiatives

• Infrastructure like stations and training centers to be made available for skill development.
• Promotion of products made by Self Help Groups, consisting mainly of women and youth on the model of Konkan Railway.

Tourism

• Incredible Rail for Incredible India to be launched and Promotion of training of auto-rickshaw and taxi-operators as tourist-guides on the model of Konkan Railway.  
• Coaches in selected trains connecting major tourist destinations to travel agencies may be offered on a revenue sharing model.  
• IRCTC to work on promoting the Gandhi circuit to attract tourists to mark the occasion of 100 years of the return of Mahatma Gandhi to India from South Africa.
• IRCTC will work on Kisan Yatra, a special travel scheme for farmers for farming & marketing technique centres.
• 
  

Railway Budget 2015-16: Quality of Life in Journeys:

Railway Minister Suresh Prabhu on 26 February 2015 presented his maiden Rail Budget 2015-16 in the Lok Sabha. This was also the second rail budget of the Narendra Modi-led NDA government.

In the budget, Prabhu gave 11 thrust areas to improve quality of life in train journeys which also includes Swachh Rail - Swachh Bharat drive. The 11 thrust areas include

Cleanliness
•Swachh Rail - Swachh Bharat campaign
•New department for cleanliness
•Integrated cleaning by engaging professional agencies and training our staff
•Waste to energy conversion plants
•New toilets covering 650 additional stations compared to 120 stations in 2014
•Bio-toilets to be fitted in the coaches

Bed linen
•National Institute of Fashion Technology (NIFT), Delhi to design bed linen
•The facility of online booking of disposable bedrolls at select stations will be extended to all passengers through the IRCTC portal on payment basis

Help-line
•Start a 24X7 helpline number 138 and a toll-free number 182 for security related complaints

Ticketing
•Operation Five Minutes to ensure Speedy Purchase of Tickets for Unreserved Class Passengers.  
•Provision of modified hot-buttons, coin vending machines and single destination teller windows will be launched to reduce the transaction time. 
•For the differently-abled travellers, a special initiative will be launched whereby they can purchase concessional e-tickets after one-time registration. 
•Proposal to work towards developing a multi-lingual e-ticketing portal
•Some other facilities include introduction of integrated ticketing system on the lines of rail-cum-road tickets on Jammu – Srinagar route will be expanded.

Catering
•Integrate Best Food Chains for E-Catering
•Railway passengers to order their food through IRCTC website at the time of booking tickets

Leveraging technology
•Introduce hand-held terminals to Travelling Ticket Examiners (TTEs) for verification of passengers and downloading charts. 
•Extending facility of SMS on mobiles as a valid proof of travel for PRS tickets
•SMS Alert service to inform passengers in advance of the updated arrival/departure time of trains at starting or destination stations

Surveillance
•Surveillance cameras will be provided on a pilot basis in selected mainline coaches and ladies’ compartments of suburban coaches without intruding into privacy

Entertainment
•Project for introducing on-board entertainment on select Shatabdi trains on license fee basis 
•Mobile phone charging facilities will be provided in general class coaches & its numbers will be increased in sleeper class coaches

Station facilities
•200 more stations to come under Adarsh Station scheme
•Wi-Fi will be provided at B category station
•Facility of self-operated lockers to be made available at stations 
•Provision of concierge services will be introduced through IRCTC at major stations
•Online booking of wheel chair on payment basis for senior citizens, patients and the differently-abled passengers will be available through IRCTC on select stations

Train capacity
•Capacity in identified trains will be augmented to run with 26 coaches
•More General class coaches will be added in identified trains

Comfortable travel
•NID to design user friendly ladders for climbing to the upper berths
•Quota of lower berths for senior citizens will be increased
•Middle bay of coaches will be reserved for women and senior citizens
•NID will develop ergonomically designed seats
•Provision of 120 crore rupees for Lifts and escalator has been made
•The newly manufactured coaches will be Braille enabled
•Entrances will be widened to ease of differently-abled passengers
•Corporate houses & MPs requested to invest in improving passenger amenities at Railway stations through CSR & MPLAD funds

Economic Survey of India 2014-15: Highlights

Union Finance Minister Arun Jaitely on 27 February 2015 presented Economic Survey of India 2014-15 in the Parliament. 

The Economic Survey reviews the developments in the Indian economy over the previous 12 months, summarises the performance on major development programmes and highlights the policy initiatives of the government and the prospects of the economy in the short to medium term.

Three pronged strategy suggested in Economic Survey 2014-15

• To improve the investment climate and reduce the backlog of stalled projects, Economic Survey 2014-15 suggested a three-pronged strategy, namely
• Revival of public investment in short term, to act as an engine of growth in infrastructure sector. It argues that public investment cannot be a substitute for private investment; but is required as a complement and to crowd it in.
• Need of creative solutions to strengthen institutions relating to bankruptcy. This will ensure that exit options are available. This will also ameliorate over-indebtedness that lowers the capacity to generate new investments. Towards this end, it contemplates setting up of a high-powered Independent Renegotiation Committee.
• Economic Survey highlights the need for reorientation and restructuring of the PPP model. This is expected to make them more viable in future.

Main Highlights of the Economic Survey 2014-15

General Highlights

• Using the new estimate for 2014-15 as the base, GDP growth at constant market prices is expected to accelerate to between 8.1 and 8.5 percent in 2015-16.
• Inflation declined by over 6 percentage points since late 2013 which is likely to remain in the 5-5.5 percent range in 2015-16, creating space for easing of monetary conditions.
• The current account deficit declined from a peak of 6.7 percent of GDP in Quarter 3 of 2012-13 to an estimated 1.0 percent in the fiscal year 2015-16.
• After a nearly 12-quarter phase of deceleration, real GDP has been growing at 7.2 percent on average since 2013-14, based on the new growth estimates of the Central Statistics Office.
• Foodgrains production for 2014-15 is estimated at 257.07 million tonnes, which will exceed average food grain production of last five years by 8.5 million tones
• Foreign portfolio flows have stabilized the rupee, exerting downward pressure on long-term interest rates which is reflected in yields on 10-year government securities and surge in equity prices.
• From a cross-country perspective, a Rational Investor Ratings Index (RIRI) which combines indicators of macro-stability with growth illustrates that India ranks amongst the most attractive investment destinations.
• It ranks well above the mean for its investment grade category (BBB), and also above the mean for the investment category above it (on the basis of the new growth estimates).
• In the short run, growth will receive a boost from the cumulative impact of reforms, lower oil prices, likely monetary policy easing facilitated by lower inflation and improved inflationary expectations, and forecasts of a normal monsoon in 2015-16.
• Growth in medium-term prospects will be conditioned the “balance sheet syndrome with Indian characteristics” that has the potential to hold back rapid increases in private sector investment.
• In the long-run, private investments will be the engine of growth. However, there is a case for reviving targeted public investment as an engine of growth in the short run to complement and crowd-in private investment.
• Expenditure control and expenditure switching from consumption to investment will be the key to growth in the short-run
• It calls for complementing Make in India initiative with Skill India initiative to enable a larger section of the population to benefit from the structural transformation that such sectors will facilitate.
• The Survey emphasizes on creation of a National Market for Agricultural Commodities in place of thousands of agricultural markets
• The Model APMC Act, 2003 should be amended along the lines of the Karnataka Model that has successfully introduced an integrated single licensing system.

Fiscal Framework

• The Survey calls for adhering to the medium-term fiscal deficit target of 3 percent of GDP. This will provide the fiscal space to insure against future shocks and also to move closer to the fiscal performance of its emerging market peers.
• It also calls for moving toward the golden rule of eliminating revenue deficits and ensuring that, over the cycle, borrowing is only for capital formation.
• Expenditure control combined with recovering growth and the introduction of the GST will ensure that medium term targets are comfortably met.
• In the short run, the need for accelerated fiscal consolidation will be conditioned by the recommendations of the Fourteenth Finance Commission (FFC).
• The quality of expenditure needs to be shifted from consumption, by reducing subsidies, towards investment.

Subsidies and the JAM Number Trinity Solution

• Food Subsidy Bill stands at 107823.75 crore rupees during 2014-15 (up to January 2015) which means an increase of 20 percent over previous year
• The direct fiscal cost of select subsidies is roughly 378,000 crore rupees or 4.2 percent of GDP in 2011-12.  
• 41 percent of subsidy given for the PDS kerosene is lost as leakage and only 46 percent of the remaining 59 percent is consumed by households that are poor.
• The JAM Number Trinity – Jan Dhan Yojana, Aadhaar, Mobile – can enable the State to transfer financial resources to the poor in a progressive manner without leakages and with minimal distorting effects.

Indian Railways and Public Investment

• The Indian Railways over the years has been plagued by host of issues. Some of them include underinvestment resulting in lack of capacity addition and network congestion; neglect of commercial objectives; poor service provision; and consequent financial weakness.  These have cumulated to below-potential contribution to economic growth.
• As a result, the competitiveness of Indian industry has been undermined. Calculations reveal that China carries thrice as much coal freight per hour compared to India. Coal is transported in India at more than twice the cost vis-à-vis China, and it takes 1.3 times longer to do so.
• The railways public investment multiplier (the effect of a 1 rupee increase in public investment in the railways on overall output) is around 5.
• In the long run, the railways must be commercially viable and public support must be linked to railway reforms. These include adoption of commercial practices, tariff rationalization, and technology overhaul.