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MDV-109: Development in India - An Overview

MDV-109: Development in India - An Overview

IGNOU Solved Assignment Solution for 2021-22

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Assignment Code: MDV-109/TMA/2021-22

Course Code: MDV-109

Assignment Name: Development in India – An Overview

Year: 2021-2022

Verification Status: Verified by Professor

Marks: 100

Q1) Discuss the importance of agriculture in economic development of India and critically examine the National Agriculture Policy 2000.

Ans) Importance of Agriculture in Economic Development

Agriculture is crucial to the development of the Indian economy. Even Nevertheless, agriculture continues to dominate the Indian economy, particularly in rural areas. The following are some of agriculture's contributions to the development of the Indian economy:

Contribution to National Income

The Indian economy's backbone is the agriculture industry. Agriculture accounts for about a quarter of all national income. Agriculture's percentage of national income has been steadily decreasing over time. From 56.5 percent in 1950-51 to 52.1 percent in 1960-61, 45.7 percent in 1970-71, 39.6 percent in 1980-81, 33 percent in 1990-91, and 24.2 percent in 2000-01, it has been steadily falling.

Source of Livelihood

While agriculture's share of national GDP has been steadily dropping, the percentage of the workforce employed in agriculture has decreased somewhat. According to data provided by the Census of India, agriculture employed 75.9% of primary workers in 1961, 69.9% in 1981, and 59.9% in 2001. Agriculture employs only 2 to 3% of the working population in advanced countries such as the United Kingdom and the United States. In France, the percentage is around 7%, and in Australia, it's around 6%. Agriculture is the primary source of income for a considerable section of the working population only in developing and developing countries. However, India's agricultural labour force is gradually dwindling. Between 2004-05 and 2011-12, it has decreased by 30.57 million.

Role in Industrial Development

Economists are well aware of the relationship between the industrial and agricultural sectors. Agriculture's importance is emphasised.

  1. supplier of wage goods to the industrial sector,

  2. provider of raw materials to agrobased industries like sugar, textiles, jute etc., and

  3. generator of agricultural income that creates demand for industrial products.

Agriculture provides the raw ingredients for many of our small-scale and cottage businesses, including as handloom weaving, oil crushing, rice husking, and so on. These industries contribute for half of the money generated in India's manufacturing sector. Food processing businesses have become increasingly important in recent years, both in terms of revenue generation and job creation. Researchers' empirical findings show that a rise in agricultural output has a favourable impact on both industrial production and national GDP. According to Rangarajan (1982), a 1% increase in agricultural productivity increases industrial production by 0.5 percent and increases national revenue by 0.7 percent.

Role of Agriculture in International Trade

Agriculture is a major component of Indian exports. India's principal exports include agricultural products such as tea, sugar, oilseeds, tobacco, spices, and so on. Agriculture is estimated to account for 14.7 percent of overall export earnings in the tenth plan. This is important for economic development since increasing exports help the country pay for growing machinery and raw material imports.

Other Contributions

Agriculture's importance in the national economy is determined by its numerous economic roles. Agriculture is India's primary source of road and rail transportation. The transportation of agricultural goods accounts for the majority of the revenue generated by railways and highways. Agricultural items account for the majority of internal trade. Agricultural expansion and increased agricultural income have a direct impact on poverty reduction, job creation, and inflation control. As a result, agricultural development is critical to India's rapid economic development. India's economy cannot thrive without agricultural development. To achieve comprehensive economic development, agricultural development should either come first or go hand in hand with industrial development.

National Agricultural Policy, 2000

Agriculture's growth rate was quite modest in the post-liberalisation period, especially during the 1990s, hovering about 2% each year. This became a major source of concern for the Indian government. In order to boost agricultural growth, the government announced the National Ag Agricultural Policy in 2000. The policy intends to accomplish the following goals:

  1. A 4% annual growth rate in the agricultural sector; growth that is based on resource efficiency and conservation of our soil, water, and biodiversity;

  2. Growth that is equitable, that is, growth that is shared across regions and farms;

  3. In the face of obstacles posed by economic liberalisation and globalisation, growth that is demand-driven, caters to domestic markets, and maximises advantages from agricultural exports;

  4. Technologically, ecologically, and economically sustainable growth.

Green Revolution, White Revolution (milk and dairy products), and Blue Revolution are all promised under the New Agricultural Policy (aquaculture). As a result, it's been dubbed a "promising Rainbow Revolution" policy. To begin with, the new agriculture strategy has set unattainable agricultural growth targets. Agricultural production grew at a pace of 2.1 percent per year during the 1990s, while food grain production grew at a rate of 1.8 percent per year, roughly equal to population growth. The goal of achieving 4% growth in agriculture appears to be a pipe dream. Food security is likewise a challenging goal to achieve. The New Policy does not specify the input use or public investment targets that must be met in order for the objectives to be met.

Second, the New Agricultural Policy calls for widespread agricultural development. However, it fails to identify the agriculturally backward states that are failing to realise their full potential. It would have been preferable if the policy had advocated a particular package for infrastructure investment in such areas in order to create a more balanced regional agricultural development. Third, the strategy emphasises private investment as a means of increasing output. Large-scale farmers can invest in tube wells, agricultural instruments, and land improvement. However, small farmers, who make up the majority of Indian farmers, are unable to make private investments and must rely on government funding for agricultural development. Furthermore, to promote agricultural growth in backward undeveloped areas, a major push in the form of public investment in rural infrastructure is required. The new policy does not place a strong emphasis on public investment and makes no commitments in this area.

Fourth, the strategy aims to promote contract farming in order to support commercialised or capitalist farming. The policy makes no provision for controlling contract farming's negative consequences on the environment or employment. Fifth, agriculture is a state subject in India. The national agriculture policy merely provides guidelines that may or may not be enforceable by states. It would have been preferable if the Centre had precisely stated its role in the many agriculture-related programmes that the states are expected to conduct. States will be enticed to participate in rural development programmes because of the federal investment.

Q2) What do you understand by development? Why do we need balance regional development? Explain with examples.

Ans) The term "development" refers to the process of making changes in order to improve one's quality of life. This is a method for organising human energy and productive resources in order to respond to opportunities and challenges. The infrastructure for development is built on four levels: physical, social, mental, and psychological. The notion began with an economic connotation, such as economic growth as measured by per capita income and gross domestic product (GDP).

As a result, it was initially limited to economic development, which included advancements in industry/manufacturing, banking, commerce, and agriculture; foreign trade (export-import); and infrastructure, which included electricity, power, communication, and transportation. Aside from the economy, there are non-economic considerations such as social issues, human dimensions, gender concerns, and the environment, all of which are supportive of long-term economic growth and development. Non-economic factors such as equitable distribution and other aspects of sustainable development have been prioritised in the planning process. Low income, predominance of agriculture, predominance of primary exports, insufficient capital and traditional technique, illiteracy and skill shortage, serious population pressure, unemployment, and particularly disguised unemployment are among the causes of underdevelopment in any country, according to Gurnar Myrdal, W. W. Rostow, and other development thinkers.

This is based on the notion that growth leads to development since a portion of increased revenue is spent on human development, such as education and health care. Underdevelopment or dependence philosophers, on the other hand, challenged this idea, arguing that backwardness is caused by inequality and exploitation rather than the elements outlined above. Poor countries, they claim, have occasionally had economic growth but little or no economic development, such as when they served primarily as resource suppliers to wealthier industrialised countries. As a result, the concept of development has evolved, taking on additional meanings such as economic growth, social justice, gender equality, and human development, as well as the sustainability factor.

Balance Regional Development

Unbalanced growth was the result of uneven development during the British regime. When compared to other regions, some are deemed to be more advanced. Because of these regional differences, planners have recognised the importance of balanced regional development since the beginning of India's planning process. "In any comprehensive plan of development, it is essential that the unique requirements of the less developed areas receive sufficient attention," the second Five Year Plan stated. The development pattern should be designed in such a way that it leads to balanced regional development." The Third Five-Year Plan, once again, dedicated a separate chapter to this issue, emphasising that "balanced development of different parts of the country, extension of all benefits of economic progress to the less developed regions, and wide spread diffusions of industry are among the major aims of planned development."

As a result, it is obvious that balanced regional development was one of the stated goals of Indian planning prior to liberalisation. Unbalanced growth was the result of uneven development during the British regime. When compared to other regions, some are deemed to be more advanced. Because of these regional differences, planners have recognised the importance of balanced regional development since the beginning of India's planning process. Plants for the public sector have been located in backward and unexplored areas of the county. Basic industrial and civic amenities, such as electricity, water supply, township, and manpower, were lacking in the area. These facilities have been created by public enterprises, resulting in a complete alteration of the socioeconomic lives of the inhabitants in these areas. Steel industries in Bhilai, Rourkela, and Durgapur; fertiliser factories in Sindri; machine tool plants in Rajasthan; and precision instrument plants in Kerala and Rajasthan are only a few examples of the public sector's growth of backward regions.

Q3) What are the factors responsible for growth of unorganized sector in India? Describe the role of unorganized sector in development.

Ans) The words "formal sector" and "informal sector" are not used in official statistics or the National Account Statistics in India (NAS). Instead, our government agencies use the phrases 'organised' and 'unorganised' sectors to describe two key portions of the national economy's production of products and services. The 'organised sector,' according to popular belief, consists of businesses for whose statistics are available in official documents and reports. The unorganised sector, on the other hand, refers to businesses whose activities or data collecting are not governed by any legal provisions and which do not keep regular accounts. The informal sector usually operates on a small scale, with little or no distinction between labour and capital as production components. Self-employed people make up a large portion of the informal economy. The presence of legal protection, the scale of establishments, the ability of workers to organise themselves in unions, and the systematic manner in which industrial processes are organised in discernible patterns distinguish the organised sector from the unorganised.

The 'unorganised sector' is frequently referred to as a ‘residual sector,' which 'covers the region that is outside the ambit of the organised sector.' For example, employment in the unorganised sector has previously been calculated as a residual of total workers minus workers in the organised sector by the Director General of Employment and Training (DGET). In India, both the enterprise concept (i.e. to define unorganised sector) and the employment concept (i.e. to define unorganised employment) lack conceptual clarity and uniformity throughout the economy's sub-sectors. For the manufacturing sector, the Central Statistical Organisation (CSO) defines organised enterprise as small units with 10 or more workers with power or 20 or more workers without power. The term, however, cannot be extended to the service sector due to a lack of comparable statistical data.

It is difficult to come up with a compelling and clear definition of the sector because the professions, employments, and working conditions are so diverse. Similarly, because there is no single or fundamental criterion or characteristic by which the unorganised sector can be defined or separated, estimating the sector's share of total output and workers becomes a challenging undertaking.

Because they differed from the internationally acknowledged and popular ideas of 'formal' and 'informal,' the terms 'organised' and 'unorganised' (and their definitional features) sparked heated arguments. However, there is an increasing consensus that both of these words ('organised/unorganised' and 'formal/informal') can be used interchangeably in accordance with international standards published by the International Conference of Labour Statisticians and the International Labour Organization.

For example, the Government of India's two major National Commissions (National Commission on Labour 1998-2002 and National Commission for Enterprises in the Unorganized Sector (NCEUS) 2004-2009) treat the terms "unorganised sector" and "informal sector" as denoting the same area and thus treat them interchangeably. The informal sector was defined as "all unregistered or unincorporated enterprises below a certain size, including microenterprises owned by informal employers who hire one or more employees on a continuous basis and own account operations owned by individuals who may employ contributing family workers and employees on an occasional basis" at the fifteenth international conference on labour statistics in 1996.

It's worth considering NCEUS' recent contributions to adding conceptual clarity to the phrase "unorganised sector." The Commission, which was charged with "reviewing the status of India's unorganized/informal sector, including the nature of enterprises, their size, spread and scope, and magnitude of employment," found that the definitions used by various agencies to identify the unorganized/informal sector are not uniform, and that they differed in some cases even among different sub-sectors of the economy. To address this issue, the Commission established a Task Force to look at the sector's definitional and statistical concerns.

The Task Force developed a set of standardised sector and informal employment definitions. Accordingly, the unorganised sector is defined as "any unincorporated private enterprises owned by people or families engaged in the sale and production of goods and services conducted on a proprietary or partnership basis and with less than ten total workers" in the economy. Similarly, "unorganised employees" are defined as "those working in the unorganised sector or families, excluding regular workers with employer-provided social security benefits and workers in the formal sector without any employment and employer-provided social security benefits."

The National Sample Survey Organization (NSSO), which has been conducting periodic surveys of unorganised businesses, has traditionally used the following criteria to identify unstructured businesses:

  1. In case of manufacturing industries, the enterprises not covered under the Annual Survey of Industries (ASI) are taken to constitute the un-organized sector.

  2. In the case of service industries, all enterprises, except those run by the government (Central, State and Local Body) and in the corporate sector were regarded as un-organized.

Role of Unorganised Sector in Economic Development

For decades, India's economy has been characterised by the dominance of the unorganised sector and informal employment. Informal activities are characterised by the following characteristics:

  1. Easy entry

  2. Reliance on indigenous resources

  3. Family ownership and enterprises

  4. The small scale of operation

  5. Labour-intensive and adapted technology

  6. Skill organized outside the formal school system

  7. Unregulated and competitive markets

The growth of official employment in the country has always been lower than the increase of overall employment, indicating that the informal sector is growing at a faster rate. Temporal data suggests that the proportion of informal/unorganized workers is rising in the official sector as well. For example, the NCEUS explains that the country is currently in a state of 'informalisation of the formal sector,' with the entire increase in employment in the organised sector over this period being informal in nature, by comparing the NSSO Employment Data for the 55th and 61st Rounds (for 1999-2000 and 2004-2005, respectively).

The importance of the informal sector is acknowledged in the Government of India's latest policy documents, which examine ways and means of generating work to serve the expanding unemployed population. For example, a special group established by the country's apex planning agency (Planning Commission of India) on "Targeting 10 Million Employment Opportunities per Year over the 10th Plan Period (2002-2007)" explains that "exclusively for generating the desired high level of employment in the country, one has to target the unorganised sector, including small and medium enterprises."

When compared to the organised/formal sector, India's unorganized/informal sector has a poor productivity syndrome. Lower real pay and bad working/living circumstances are key elements of the sector. Furthermore, the sector is characterised by excessive seasonality of employment (particularly in the farm sector), the preponderance of casual and contractual employment, atypical production organisations and work relations, the absence of social security measures and welfare legislations, the negation of social standards and worker rights, and the denial of minimum wages, as well as a poor human capital base (in terms of education, skill, and training) and lower workforce mobilisation status.

Q4) Discuss the constitutional measures taken for the upliftment of scheduled castes in India?

Ans) The Indian government, as well as state governments in several states, have launched various developmental policies to help the Scheduled Castes improve their socioeconomic status. These actions can be classified as constitutional or non-constitutional.

Constitutional Measures

The quota or reservation system in government jobs is a ground-breaking and crucial strategy aimed at assisting the Scheduled Castes improve their economic condition. The Indian Constitution includes a number of guarantees for their well-being. "No citizen shall be subject to any disability, liability, restriction or condition with regard to: (a) access to shops, public restaurants, hotels and places of public entertainment; or (b) the use of wells, tanks, bathing ghats, roads, places of public resort maintained wholly or partly out of state funds or dedicated to the use of the general public," according to Article 15 of the Constitution. "The practise of untouchability is abolished, and its practises in any form are severely outlawed and punishable by law," says Article 17 of the Constitution. The Untouchability Offence Act of 1955, which imposes severe penalties, including imprisonment, on those who violate it, has added to the strength of this Article.

The government has correctly recognised the importance of education, employment, and economic upliftment for the Scheduled Castes in order to improve their socioeconomic status. Article 16 guarantees "equality of opportunity for all citizens in matters relating to employment or appointment to any office under the state," as well as "nothing in this Article shall prevent the state from making any provision for the reservation of appointments or posts in favour of any backward classes of citizens, which in the opinion of the state is not adequately represented in the state's services." Although the government is not required to follow the terms of Article 46, several economic steps have been taken to improve the position of the disadvantaged, such as land assignment, housing sites, building supplies, and monetary aid.

The educational divide between Scheduled Castes and caste-Hindus is stark. While highlighting the importance of education for Scheduled Castes and backward classes, the Indian Education Commission suggested that the existing scheme for Scheduled Castes education be continued and expanded, and that greater efforts be made to offer educational facilities. 'The state shall promote with special care the educational and economic interests of the weaker sections of the people, in particular of the Scheduled Castes and Scheduled Tribes, and shall protect them from social injustice and all forms of exploitation,' according to Article 46 of the Directive Principles of State Policy. 'Efforts should be made to defend the educational interests of minorities,' according to the National Policy on Education of 1968.

The 1986 National Policy on Education stressed equal opportunity for all, not just in terms of access but also in terms of success conditions. The policy paper emphasised the importance of providing special attention to the education of Scheduled Castes and Scheduled Tribes through reservation facilities in higher education institutions. It also proposed financial incentives in schools for Scheduled Castes and Scheduled Tribes. Furthermore, scholarships for post-secondary study are provided to students from these localities. In addition, the state pays for hostel accommodations and repayment of additional boarding fees.

In terms of political involvement, the Indian Constitution guarantees that Scheduled Castes have access to various democratic institutions. Scheduled Castes and Scheduled Tribes have seats reserved in the Lok Sabha under Article 330 of the Constitution, while Scheduled Castes and Scheduled Tribes have seats reserved in the state legislatures under Article 332. Reservation of seats at all levels of government, from village panchayats to Parliament, has brought the Scheduled Castes into the political mainstream of the country.

A National Commission for Scheduled Castes is established under Article 338 of the Constitution.

Some of the main duties of the Commission are:

  1. To study and monitor all things relevant to the safeguards given for SCs under the Constitution or any other law now in force or under any government order, and to assess how well they are working;

  2. To look into specific complaints about the infringement of the SCs' rights and safeguards.

  3. Participate in and advise on the SCs' socioeconomic development placement process, as well as analyse their success under the Union and any State.

Some political observers have correctly pointed out that the Constitutional measures of protective discrimination have helped Scheduled Castes advance in five important areas:

  1. access to religious and other public places and lessening of ritual and social distancing;

  2. integration of all-caste groups, including Scheduled Castes in schools, colleges, and universities;

  3. share of political power;

  4. residential de-segregation; and

  5. occupational mobility.

Non-Constitutional Measures

As you are aware, the Government of India has designed and implemented a number of developmental programmes for the socioeconomic upliftment of India's Scheduled Castes from time to time. The following are a few key actions made towards the upliftment of Scheduled Castes:

Rural Development Programmes: During the 1970s, the government developed two key programmes, the Small Farmers' Development Agency (SFDA) and the Marginal Farmers' and Agricultural Laborers' Development Agency (MFALDA), both focused at helping the poorest of the poor. Moreover, various rural development schemes, such as the Integrated Rural Development Programme (IRD), Jawahar Rozgar Yojana (JRY), Indira Awas Yojana (IAY), Development of Women and Children in Rural Areas (DWCRA), and others, aimed at the economic and social upliftment of the poorest of the poor, the backward and downtrodden, were launched in various Five-Year Plans. All of these things are meant to help the Scheduled Castes improve their economic situation.

Scheduled Castes component Plan: The component plan for Scheduled Castes created during the Sixth Five Year Plan aims to include all aspects of economic, educational, and social development, as well as the fulfilment of basic requirements. The component plan aims to improve the living conditions of Scheduled Castes in their habitations by providing potable water, connecting roads, house-sites, primary schools, health centres, veterinary centres, community halls, and other amenities.

Pre-Matric &Post Matric Scholarships: The purpose of a pre-matric scholarship is to help students from Scheduled Caste households who work in unsanitary occupations like scavenging or tanning.

The post-matric scholarship aims to provide financial aid to Scheduled Castes students who wish to pursue post-matriculation courses at a recognised Indian university. Additionally, text materials, stationary, and uniforms are provided free of charge to Scheduled Caste and Scheduled Tribe students.

National Scheduled Castes and Scheduled Tribes Finance and Development Corporation: The primary goal of forming this organisation was to serve as a catalyst in the development of job-creation plans and the funding of trial initiatives.

The National Commission for Safai Karamcharis The National Commission for Safai Karamchari Act, 1993 established the commission on August 12, 1994, for a three-year term to promote and protect the interests and rights of Safai Karamcharis. The Commission can also look into particular complaints as well as issues connected to the implementation of programmes and schemes for the welfare of Safai Karmachoris.

Babu Jagjivan Ram Chhatrawas Yojna since 2008, for the development of dormitories for students from low-income families who want to get a good education. The Scheme's goal is to provide residential housing for SC boys and girls in middle schools, high schools, colleges, and institutions.

Assistance to Voluntary Organizations The goal of this scheme is to use and involve capable and reliable Voluntary Organizations in the socio-economic development of Scheduled Castes. The Government of India provides Grants-in-Aid to Voluntary Organizations operating in the fields of education, health care, nutrition, and skill development through this scheme.

Rajiv Gandhi National Fellowship This scheme was started in 2005-06 for Scheduled Caste students who wanted to pursue higher education and pursue M. Phil/ PhD degrees.

Pradhan Mantri Adarsh Gram Yojna: This is a centrally supported scheme that covers about 71,400 communities in the country with a population of more than 40% SC. It began in 2009-10 with the goal of integrating the growth of these communities into modal villages. All essential infrastructural and human development facilities are included in the integrated development.

Coaching facility for Scheduled Castes To increase their representation in Central Government services and public sector organisations, the government has established a pre-examination coaching centre for Scheduled Castes and Scheduled Tribes.

State Government Measures Various state governments have established initiatives for the upliftment of Scheduled Castes in addition to the federal government. The "Ambedkar Village Scheme," one of the illustrious projects launched by the Utter Pradesh government in the year, is mentioned here.

Ambedkar Village- Its Features

The Uttar Pradesh government launched the Ambedkar Village project for the development of the state's Scheduled Castes and Scheduled Tribes people. Since 1990-91, the plan has been in place throughout the state. Under the Ambedkar Village initiative, villages having more than 50% Scheduled Castes/Scheduled Tribes population were chosen and considered for promotional and developmental programmes. The overall number of Ambedkar villages has increased from 9,493 in 1990-91 to 11,218 in 1995-96 and is continuing to rise.

Q5) What is Public and Private Partnership? Discuss its role with reference to infrastructural development in our country.

Ans) The public-private partnership (PPP) is one of the most popular changes in public financial management during the previous decade. PPP has piqued the interest of a rising number of governments as the greatest cure to the global infrastructure investment slump. It was discovered in Europe that over a thousand partnerships were signed in the European Union alone between 1990 and 2005, representing an investment of about 200 billion euros. The public-private partnership (PPP) is an arrangement in which the private sector provides infrastructure assets and services that were previously delivered by the government. The government's actions are aided by external funding. PPPs are public-private partnerships that expose the public entity's assets to severe risk due to their flexibility and complexity. This is because they are excluded from several regular procurement schemes and rules, and they are employed by ministries that are less well-trained than their private-sector counterparts to build effective risk management systems. In this quickly changing field, the following points are now gaining traction:

  1. PPPs should be limited to projects delivering greater Value for Money

  2. the contractibility of the quality of service,

  3. the transfer of a significant share of risks to the private sector,

  4. the presence of competition or incentive-based regulations,

  5. a sound institutional and legal framework,

  6. a sufficient level of technical expertise in the government, and

  7. the proper disclosure of PPP commitments, along with government guarantees

Role in Infrastructural Development

The duty for providing basic services transferred from the federal government to state and municipal governments, commercial agencies, and community-based organisations in the 1990s, resulting in a radical shift in urban governance. Cities and towns have been given clear instructions to invest in water supply and sanitation infrastructure in addition to funding their operating costs. Rather than budgetary support, these will be financed mostly through institutional and private finance. The funds available to government departments and parastatal organisations to carry out capital projects have been substantially reduced. The high cost of borrowing has deterred them from undertaking commercially unprofitable but socially beneficial projects, such as supplying water and sanitation in low-income communities. This has had a significant impact on the urban poor's access to essential services.

In recent years, the private sector has been more involved in the delivery of fundamental services. The two sectors in which the private sector has showed the most interest in the 1990s are water supply and solid waste management. The primary idea here is that metropolitan municipal governments can save a significant amount of money while allowing businesses to make a profit. The primary area of concern in this context is whether such subcontracting arrangements lead to a weakening of social responsibility and the exclusion of the poor and vulnerable from the official delivery system.

The Affordable Housing in Partnership scheme aims to put into practise the strategy outlined in the National Urban Housing & Habitat Policy (NUHHP) 2007 of promoting various types of public-private partnerships – between the government and the private sector, cooperatives, financial services, state parastatals, local governments, and so on – in order to achieve the goal of affordable housing for all. It aims to provide a huge boost to economic activity by creating jobs through cheap housing, particularly for construction workers and other urban poor, who were among the most vulnerable groups during the recession. It also aims to create demand for a wide range of industrial goods by leveraging housing's multiplier effect on other economic activities.

This Scheme is part of the JNNURM and takes into consideration the experience of executing the BSUP and IHSDP, as well as the assessment that the shortage of urban land availability for city expansion is a factor in the deficiency in response from BSUP towns. The programme also acknowledges the strain that BSUP and IHSDP are putting on state budgetary resources, as well as the necessity to secure institutional financing to build affordable housing on a large scale. The scheme aims to encourage state governments to set aside land to address the acute shortage of affordable housing and to engage under the NUHHP 2007 cooperation model.

States/UTs and ULBs would act as middlemen, offering land at nominal, fixed, or institutional rates for specified housing or integrated housing developments, which would be required for the programme to work. Land costs could also be lowered by enticing private developers to build on their land, as well as by providing zoning-related incentives such as land use conversion, extra floor area space for the construction of affordable housing to be allocated by the State/UT government, and so on. Planning layouts that mix EWS/ LIG/MIG with HIG houses and commercial layouts, as well as cross subsidising through the premium obtained on the sale of HIG and commercial spaces, have also been recommended as ways to reduce building costs.

While these novel instruments may aid in meeting the housing needs of a segment of the population that isn't necessarily impoverished, the easier approach to accomplish this work by entrusting the state housing boards and parastatals established for this reason appears to have been overlooked. Housing is included in the JNNURM reforms for "supply of household level basic services." Under this programme, private companies are encouraged to engage on slum redevelopment projects, in which old slums are demolished and replaced with multi-storey structures. However, much of the property obtained in the name of poor housing is being targeted for non-poor commercial and residential uses.

The low subsidies are consequently seized by private agencies, who use them for themselves or for a segment of the population who can pay market prices in excellent city sites. Another promising area under the central reform is earmarking 20-25 percent of built land for the EWS and LIG categories by private developers. It's hard to comprehend why the private sector would set aside 25% of their developed land for the urban poor when the public sector, including governmental institutions like HUDCO, has abandoned its social obligation of providing affordable housing for the poor.

Another reform that deserves emphasis is the greater engagement sought from the private sector in providing municipal services by making it essential to establish state level regulatory and legislative efforts for the goal. If municipal services are delivered and administered by the private sector on a market-driven basis, there is a risk that the poor would be priced out. The infrastructure of a country's economy is its backbone. In the process of infrastructure development, the public sector is critical. The government implements a policy to expand irrigation facilities, as well as power and energy, without which agricultural development is impossible. There can be no industrial development without roads, railways, and electricity. The road, rail, aviation, and sea transportation systems have all been created by the public sector. Because of the public sector, the expansion has multiplied. The public sector does not make a significant contribution to the country's infrastructure development.

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