Monday, May 24, 2010

Differential Demography, Debate on Globalisation, EXCLUSIVE Growth of Apartheid and Discrimination,Economics of EXCLUSION, Inclusion Hyped and Economic Ethnic Cleansing. Marichjhanpi REVISITED amidst Election Scenario in Bengal without any Concern or

Differential Demography, Debate on Globalisation, EXCLUSIVE Growth of Apartheid and Discrimination,Economics of EXCLUSION, Inclusion Hyped and Economic Ethnic Cleansing. Marichjhanpi REVISITED amidst Election Scenario in Bengal without any Concern or Commitment, Demand for Justice!And SEGREGATED SC ST OBC Minority Humanscpae in the BRAHMIN FRONT Landscape of ABORIGINAL Bengal!

Caste-based census against statute: RSS


Indian Holocaust My Father`s Life and Time- Three Hundred SEVENTY FIVE

Palash Biswas


Times of India and Pratidin are the News Papers amongst the Bengali Hegemony media which published Pages after pages on the Marichjhanpi Genocide recently. . One of the writers include the Former Under Home Secretary in Jyoti Basu Administration which committed the Crime. The man is now the REFUGEE Face of RSS which aligns with Bengali Brahmin on the Long Pending Agenda since 1947, Ethnic Cleansing of the SC ST OBC Minority Bengali Refugees resettled Countrywide. Bangla Statesman, the mouthpiece of Change Brigade Intelligentsia and JUG Paribartan, KOLKATA TV on Print have a long list of those who had been the Captains and Brigadiers of the Regimented Gestapo of Genocide culture! AMIO Samanta heads the Brigade who was the In Charge of Marichjhanpi Genocide!The RSS Man leads a Refugee Front and tried Unsuccessfully as BJP Candidate to enter Parliamentary politics from a SC Constituency from Bengal. He called me repeatedly to see his articles.

Anand Bazaar Patrika, meanwhile, on Sunday published an Edit on Gorkhaland Crisis and highlighted the Bhadrolok Hegemony Discriminating against the Aboriginal Communities and Nationalities in Bengali and also referred to AHOM and Tripura. But it did not mention neither MARICHJHANPI nor the EXILED SC OBC Refugees FACELESS!

Political Parties led by MS Mamata Matua scream on GENOCIDE Culture but keep MUM on Marichjhanpi. Despite using the FILM on Marichjhanpi to mobilise SC Vote Bank against the left and writing so many things on Marichjhanpi, Politics, CIVIL Society and Media as well as Intelligentsia in Bengal do NEVER NEVER Refer to GONDAWANA Refugees stranded in CROSS FIRE nor do they demand Justice for the MARICHJHANPI Victims.

Last night I witness ON Line Debates on NDTV Profit and IBN CNN dealing with Differential Demography, Globalisation and UPA achievements in Inclusive Growth. PROFIT Panel was headed by non else than MONTEK SINGH Ahluwalia and understandably anchored by great RSS Lady BARKHA Dutta. IBN anchor Rajdeep Sardesai roped in VEER SINGVI, VINOD Mehta, Swapan Dasgupta and MANINI Chattrejee. It would have been amusing if he had included a few like Chandan Mitra, Rajkishore,Bhagwan Singhand Chandrabhan Prasad!

India targets 10 per cent near-term growth, 5 per cent inflation: PM

Economic Times - ‎9 hours ago‎
NEW DELHI: Putting inclusive growth and taming price rise on top of United Progressive Alliance's (UPA) agenda, Prime Minister Manmohan Singh Monday set a ...

Indian Prime Minister Promises Efforts to Normalize Ties With Pakistan

Voice of America - Anjana Pasricha - ‎1 hour ago‎
The prime minister says the government's biggest task is to ensure more inclusive growth in a country where hundreds of millions of people are still poor, ...

Indian PM seeks to match China growth

Financial Times - James Lamont - ‎4 hours ago‎
"We have given our country a government which works, which has delivered high rates of growth, which has accelerated the process towards inclusive growth ...

A coalition of rights

Business Standard - ‎20 hours ago‎
Inclusive growth, peace with neighbours, creating an atmosphere conducive to India's long-term development, the fight against terrorism and extremism, etc., ...

Message from PM's press meet: I am here to stay

Rediff - ‎2 hours ago‎
He also continued Sonia Gandhi's [ Images ] line on inclusive growth while focusing on development. He avoided talking about Railway Minister Mamta Banerjee ...

We will complete our term, says Manmohan Singh

Hindustan Times - ‎8 hours ago‎
... given our country a government which works, which has delivered high rates of growth, which has accelerated the process to inclusive growth," he added. ...

Economy growth expects to 8.5 percent in current fiscal : PM

Samachar Today (blog) - ‎9 hours ago‎
... the momentum of inclusive growth did not get interrupted. He expressed confidence 10 per cent growth in the medium term target will be achieved as India ...

8.5 % growth achievable: PM

I Government (blog) - ‎2 hours ago‎
"Inevitably, our first priority was to protect the economy from the global slowdown and ensure that the momentum of inclusive growth did not get interrupted ...

Rising prices remain matter of deep concern: PM

Business Standard - ‎9 hours ago‎
He also said that the government's first priority was to protect the economy from the global slowdown and ensure that the momentum of inclusive growth did ...

Highlight of PM's new conference

Times Now.tv - ‎8 hours ago‎
I would like all like-minded parties who are for inclusive growth and well-being of the people to support the government, says PM on whether he misses ...

UPA aiming for 10% growth in medium term: PM

Business Standard - ‎9 hours ago‎
"I believe that the mandate of the 2009 elections was a vote for the inclusive agenda of the UPA government that sought to give voice to all sections of the ...

PM to address nation on UPA-II's first anniversary on Monday

Expressindia.com - ‎May 23, 2010‎
The country returned to higher growth path in the period and allocated massive funds for social and infrastructure development to ensure inclusive growth. ...

HIGHLIGHTS-Indian prime minister's news conference

Interactive Investor - Paul de Bendern - ‎6 hours ago‎
Singh said that the record of the first year was a "record of reasonable achievement", listing high inclusive growth, strong social sector spending and a ...

Inflation to cool to 5-6% by Dec, growth to accelerate: PM

NDTV.com - ‎5 hours ago‎
Singh, who is recognised as a world-renowned economist, said that India did not allow global financial crisis to "interrupt" the inclusive growth. ...

Inflation is easing, says Prime Minister

India Infoline.com - ‎8 hours ago‎
India's annual growth rate had averaged 9% for four years before the global financial crisis. It reduced to 6.5% in FY09 but recovered to 7.2% in FY10. ...

The Loneliness of Manmohan Singh

Wall Street Journal (blog) - Paul Beckett - ‎4 hours ago‎
None of this will really matter if Mr. Singh succeeds in his major goals: 10% GDP growth, peace with Pakistan, and more inclusive economic gains for the ...

Headway made but Cong fails to capitalise

India Today - Kay Benedict - ‎May 22, 2010‎
The first promise in the manifesto pertained to fostering faster and more inclusive growth. Gandhi's pet 'right to food' project to ensure that there are no ...

Still made for each other

Chandigarh Tribune - Anita Katyal - ‎May 21, 2010‎
The UPA in its first innings saw the two reluctant politicians rewrite the rules of the game and introduce the concept of 'inclusive growth' to the ...

I could do better, but no question of retirement: PM

Mangalorean.com - ‎3 hours ago‎
Manmohan Singh felt that political parties who are "interested in India's growth and interested in ensuring that India's nuclear power programme moves ...


This morning, National TV provided us, we the people with another opportunity to face the national Media, Print as well as Electronic, English as well as Vernacular, National as well as Regional and Local sitting in Cosy Aircooled  VIGYAN  BHAVAN in the National Capital as Prime Minister`s National PRESS Conference was being telecasted live. I did sat before the Screen opening my senses wide open. It was a DISASTROUS Experience as the Pet Toilet Media seems to be Mesmerised by the ZIONIST Dynasty that almost Every question involved Mrs Sonia Gandhi or her son, the Crown prince RAHUL Gandhi. No national issue was represented by the Consciousness of the Nation! Nothing at all. Neither the Economy nor the Society, Neither politics nor the Economic Ethnic Cleansing, Neither Food Insecurity nor the Man Made Calamities, Neither Holocaust nor Military Option. No concern for the Black Untouchables at all except plead for More Repression quoting Maoist Menace, except the GREED to sustain Manusmriti Rule questioning Caste Census, Except the sponsorship and paid pattern Pushing for Economic Reforms and so called Inclusive Growth justifying the Exclusion of BPL Slum dog Refugee Aboriginal Indigenous Minority Landscape in the Differential Demography of the Free Market Democracy in the World on Fire!India Inc Monday lauded Prime Minister Manmohan Singh's strategy for inclusive growth and to rein in inflation.

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"FICCI is fully in agreement with the prime minister's three-fold strategy of increasing investments in social and economic infrastructure, enhancing productivity in agriculture and giving a fresh impetus to the manufacturing sector," Rajan Bharti Mittal, president of the industry lobby, said.

He urged the government to frame a clear manufacturing strategy.

"India's industrial sector is performing rather robustly and this can be further enhanced through a suitable manufacturing policy," Mittal said.

Assocham president Swati Piramal welcomed the prime minister's twin focus of reining in inflation and achieving an 8.5 percent growth in 2010-11. She said that for 10 percent growth in medium term, the reform process should be taken further at various levels, including social and financial sector.

"Concerted efforts in these directions would make the growth of the (world's) second fastest growing Indian economy more sustainable and inclusive," she said.

The chamber also urged the government to take note of external shocks and developments owing to sovereign debt crisis in European economies.

At a press conference, the prime minister said India performed better than most global economies and will grow at 10 percent in the medium term with moderate inflation even as social inclusion would remain at the core of government agenda.

He said the government attached the highest priority to containing inflation.

He said the deprived communities, including the scheduled castes and scheduled tribes, other backward classes, minorities and women, will continue to receive priority attention.

'Employ backward class for inclusive growth'

India Inc needs to do more to employ from the underprivileged and socially-backward sections in order to effect an inclusive growth, Hari S Bhartia, newly-elected President of industry chamber Confederation of Indian Industry, has said.

Bhartia, who took over as CII President from TVS group's Venu Srinivasan, said corporate sector must play a more aggressive role in facilitating employment opportunities for the backward. "I think we have a responsibility to go out of our way and provide skills and employability to the underprivileged and the backwards....more needs to be done definitely," Bhartia told TOI.

However, he opposed any move to enforce this though any legislation that would mandate a compulsory quota for the same. "There should not be any quota, for sure. The industry is aware of its responsibilities and has been making efforts towards this end as part of our affirmative action approach," Bhartia said.

Speaking about the condition of the Indian economy, he said industrial activity was on the pick-up and companies were making fresh investments for expansion. "The industry has regained confidence and has started to add capacity. Moreover, the pick-up looks sustainable as domestic demand remains strong and international demand is stable," he said.

He pegged the economic growth for the current fiscal at 8.5% from the estimated 7.2% in 2009-10, but called for greater reforms, particularly in the financial sector, to push growth to double digits. "The industrial demand has been good and CII estimates GDP at 8-8.5% in 2010-11. While demand in the domestic markets has been strong, the demand in the international markets also looks stable... A recovery in agriculture is likely in the coming years leading to an upside in GDP growth," Bhartia said.

However, he said the government should be mindful of the credit requirements of the industry and ensure that interest rates remain within a comfortable zone.

glblthmb Picture Credit: Bortalotti

Human societies across the globe have established progressively closer contacts over many centuries, but recently the pace has dramatically increased. Jet airplanes, cheap telephone service, email, computers, huge oceangoing vessels, instant capital flows, all these have made the world more interdependent than ever. Multinational corporations manufacture products in many countries and sell to consumers around the world. Money, technology and raw materials move ever more swiftly across national borders. Along with products and finances, ideas and cultures circulate more freely. As a result, laws, economies, and social movements are forming at the international level. Many politicians, academics, and journalists treat these trends as both inevitable and (on the whole) welcome. But for billions of the world's people, business-driven globalization means uprooting old ways of life and threatening livelihoods and cultures. The global social justice movement, itself a product of globalization, proposes an alternative path, more responsive to public needs. Intense political disputes will continue over globalization's meaning and its future direction.


Articles and Documents

 

Key Documents

Inescapably Side by Side - An Interview with David Held (February 2004)

David Held, a leading political scientist, addresses the concept of globalization and stresses the need for a "cosmopolitan democracy" in an age of interconnectedness. Further, Held comments on how evolving supra-national, political and economic projects challenge state sovereignty. (Polity)

Runaway World - Reith Lectures Revisited (November 10, 1999)

Anthony Giddens, the leading British social theorist, believes the future is not fixed, and that globalization enhances both our opportunities and responsibilities.

The Threat of Globalization (Winter 1999)

Edward S. Herman's analysis of the ideology of globalization and its failures.(New Politics)

Progressive Globalism: Challenging the Audacity of Capital (February 1, 1999)

William K. Tabb examnies critically the globalization of economy and its meaning for working people.

Statement on Globalization (May 11, 1998)

A statement adopted by the UN Committee on Economic, Social, and Cultural Rights headed by Philip Alston. The statement looks critically at globalization as a "phenomenon which has wrought fundamental changes within every society."

2008

 

Europe's Century (June 17, 2008)

The article defines globalization as the "regionalization of international relations" and argues that the EU stands as a model of co-operation for other regional groupings such as the African Union (AU), ASEAN and Unasur. The AU has established a regional peacekeeping force, criminal court and common army to eliminate rivalries among its members. The author argues that such initiatives also diminish the role of the US as a global superpower. (Guardian)

2006

 

The Three Rounds of Globalization (October 19, 2006)

Identifying "three rounds of globalization" this Globalist article argues that "globalization is not a new thing." The exchange of ideas between ancient civilizations - the first round - fueled the rise of the West with industrial revolution and imperialism - the second round. Likewise, the transfer of Western ideas feeds the present rise of India and China - the third round. By these dynamics, the world is returning towards global equity, where India and China have a share of world income roughly similar to their share of people -as in the early 19th century. While appreciating this return to international equity as a "moral imperative" the author fails to consider to what extent the economic development of these Asian countries takes place at the expense of domestic equity and the environment.

Political Struggles Will Determine Better Globalisation (March 15, 2006)

Based on the article The Sources of Neoliberal Globalization by Jan Aart Scholte, this South Centre publication offers a historical-sociological background on the neoliberal influence on globalization. It looks at four interrelated forces that have generated and sustained neoliberalism since the late 70s, namely governance, production, knowledge and social networks. Focusing on the exclusive nature of social networks supportive of neoliberalism, the article calls for a broader advocacy of alternative ways to shape globalization.

2005

 

Mobilizing Political Will (June 29, 2005)

Arguing that the structures of global governance are "out of sync" with globalization, this report from Helsinki Process on Globalisation and Democracy calls for new "multi-stakeholder efforts between governments, business and civil society." The group proposes reforming the World Trade Organization, establishing a new agreement on greenhouse gas emissions, and supports creating a UN Human Rights Council and a World Environmental Organization.

The Polarised World of Globalisation (May 10, 2005)

In his book "The World Is Flat," Thomas Friedman sees globalization as a phenomenon that will eliminate inequality in our societies. But, according the author of this article, Friedman fails to recognize that corporations and powerful institutions are steering globalization, building "walls" of property and class all over the world. From this alternate viewpoint, Friedman's "flatness" appears as "a symptom of the absence of real freedom." (Navdanya)

Globalization Is Not Made in the West (April 13, 2005)

This YaleGlobal article provides a long-term view on globalization from the Middle Ages to the present. From a historical perspective, globalization is much more about the "changed environments people create and manipulate as their societies globally interconnect" than "about rampant capitalism, technology, or homogenization," the author argues.

2004

 

The Miracles of Globalization - A Review of Why Globalization Works (September/October 2004)

This review, published in Foreign Affairs, praises the book Why Globalization Works as a "patient and persuasive refutation of many of the arguments most frequently marshaled by critics of trade liberalization." In the euphoric celebration of the book's arguments, the review fails to analyze one logical and fundamental point - for whom does globalization really work?

Globalization on Trial (June 27, 2004)

This review of Naomi Klein's book Fences and Windows: Dispatches from the Front Lines of the Globalization Debate, defines globalization as a set of "fences," both literal and ideological, that separate and contort the globalizing world, thereby worsening an array of international problems. However, in each of these fences, she sees "windows," or individuals with a "natural resistance to enclosure," who challenge globalization's current form. (The Tribune (India))

The Collapse of Globalism: and the Rebirth of Nationalism (March 2004)

No grand economic theory lasts forever. According to this article, "Globalism," the ideology of globalization, is now also on the brink of demise. The author examines the history of "Globalism," from its birth in 1970s, through its triumph with the creation of the World Trade Organization, to its "humiliation" at the Dayton Peace Accords. The author argues that nationalism, in both positive and negative forms, is overtaking the declining Globalism. (Harper's Magazine)

A Fair Globalization: Creating Opportunities for All (February 24, 2004)

"Is it possible to make the globalization process fairer?" asks the World Commission on the Social Dimension of Globalization, an ILO initiative created in 2002. By answering "Yes", the report concludes that the main obstacle is not globalization as such, but the great deficiencies in its governance. (World Commission on the Social Dimension of Globalization)

Head to Head: Social vs Economic Forum (January 16, 2004)

As the two forums debating global development open, former WTO advisor Philippe Legrain, and South African anti-privatization activist Trevor Ngwane argue for and against globalization. (BBC)

2003

 


Beyond Globophobia (November 13, 2003)

"Globalization" only recently entered daily speech, causing many people to forget that national borders have lost some of their importance since the very beginning of capitalism. Doug Henwood recalls that rich countries could never have raised their living standards to today's level without the help of their colonies. (The Nation)

Teaching Globalization (August 28, 2003)

Globalization is one of the leading issues of the day, but how should we teach it to students? One educator shares his approach. (Globalist)


International Security in the Era of Globalization (March 4, 2003)

Russian Foreign Minister Igor Ivanov describes the contradictory and "ever more integral" effects of globalization on international security. Along with heightened political and economic integration, the spread of information technology allows authorities to respond more effectively to security threats. Conversely, economic globalization produces widespread inequality, slows social development and increases international tensions. (The Telegraph(Kathmandu))

 

Are there Alternatives? (February 20, 2003)

In the fifth essay in a five-part series, Tom Nairn argues that democratic nationalism offers one of the main alternatives to neo-liberal globalization. He posits that "natural seats of resistance", countries like Brazil, China and India, could provide the basis for alternative models that shape a more equitable world. (Open Democracy)


Finnish President's Speech on the Social Dimension of Globalization (February 6, 2003)

Finnish President Halonen delivers a stirring speech about the 'deglobalization' occurring in Africa. She discusses the role of trade, nation states, international organizations and civil society in creating a more equitable, just and humane globalization.

The Way Ahead (September 9, 2003)

In this excerpt from "Globalization and Its Discontents," Joseph Stiglitz argues that globalization has worsened the conditions of millions of people. To make globalization work for all, international institutions must, in a transparent way, be more responsive to the poor, to the environment and to broader political and social concerns. (TomPaine)

 

Political, cultural and especially economic globalization reached unprecedented levels during the 1990s. The global economic downturn and the war on terror together resulted in a much decreased rate of economic globalization. (Daily Star)

 http://www.globalpolicy.org/globalization/defining-globalization.html

Now

PM defends Raja, says he's done no wrong

PM defends Raja, says hes done no wrongThe PM says the the telecom minister followed the policies of the previous NDA government only.  Total comments2

Read

Talk

Air disaster at Mangalore: speak up Total comments78
Big Picture
NDTV News Big Picture

France's Champs-Elysees turns green: No limousines, no sports cars. Cows and goats are making heads turn as the Parisian street becomes a giant garden with farm animals, for two days.

Top Stories
Won't retire, but happy to make way for younger leadership: PM
In his first press interaction since the UPA began its second term, the Prime Minister talked about unfinished tasks, 2G, Naxalism.


Read more at: http://www.ndtv.com/news/index.php?cp


  • Union telecom minister A Raja 24 May expressed optimism that the broadband wireless access (BWA) spectrum auctions, which kicked off 24 May, will be as good as the 3G auctions and that he expects to mop up over Rs 15,000 crore from the process.

  • Ambani brothers' burying hatchet a good sign, says Deora

    Petroleum Minister Murli Deora on on 24 May asserted that the dispute between Ambani brothers did not really matter, but welcomed their move to bury their differences, saying it is a "good sign".

  • PM defends telecom minister mired in 2G controversy

    Telecom minister A Raja has finally got Prime Minister Manmohan Singh defending him. Raja is under fire from opposition parties for having given telecom licences at very low prices.

  • NTPC seeks EGoM meet on gas allocation soon

    Seeking immediate supply of gas from RIL operated K-G basin for expansion of its plants, state-run NTPC has asked the Centre to convene the ministerial meet on gas allocation soon.

Interviews

ICICI-BoR deal to expand network by 25%

Chanda Kochhar

In a move that would help it expand overnight by 25 per cent, the largest private sector bank ICICI has announced to acquire Bank of Rajasthan through a no-cash merger deal that is valued at about Rs 3,000 crore.

Opinions

  • Mandar Jamsandekar

    Monsoon next big trigger for markets

    Now the next trigger for the markets to stabilise would be the monsoon. Remember it would be the actual monsoon and not the predictions from the MET department as historically they have been consistent to fail every year.

  • Shivinder Mohan Singh

    Fortis Healthcare's fund raising plans

    Fortis Healthcare is planning to raise $185 million via foreign currency convertible bonds issuance and preferential issue of shares, to fund acquisitions. Shivinder Mohan Singh, MD, Fortis Healthcare, says the whole plan is to correct debt-equity ratio.

  • Sarvendra Srivastava

    Euro looking weak: Emkay Global

    Sarvendra Srivastava, technical strategist at Emkay Global, says after fantastic aid package, Euro failed to hold its bullish gap, which is a sign of further weakness.

Stock Recommendations


Lanco Infratech Ltd (Hold) Rs. 56.85 2.05 (3.74%)
Avani Mehta - fundamental analyst, MAIA Financial Services Pvt. LtdDate: 24 May, 2010 ABB Ltd (Buy) Rs. 829.10 1.80 (0.22%)
Hemen Kapadia - CEO at chartpundit.comDate: 24 May, 2010 Reliance Industries Ltd (Hold) Rs. 1021.45 25.70 (2.58%)
VVLN Sastry - country head, Firstcall India Equity AdvisorsDate: 24 May, 2010 Larsen & Toubro Ltd (Hold) Rs. 1628.20 20.10 (1.25%)
Abhijit Paul - tech analyst at Brics SecDate: 17 May, 2010

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ourtesy: Mail Today


Left checks missing as UPA-II plays to capitalist gallery
Sowmya Aji
New Delhi, May 24, 2010






It's capitalism which appears to be the driving force behind the economic policies of UPA-II. All the factors that formed the economic agenda of Prime Minister Manmohan Singh and the then finance minister, P. Chidambaram, in UPA-I, are missing in this round of rule. This shows a total shift from the old Nehruvian socialism model that India followed till a few years ago.

According to economic watchers, the liberalisation process that Singh set in motion as finance minister in the early 1990s, is likely to see its fully mature form in the second term of the UPA. The Left, which acted as the watchdog in the first term of the coalition government, has no role to play now except stage protests and observe helplessly.

All through UPA-I, it was the Left that stopped Singh from opening up India's economy even further. Liberalisation of the banking and insurance sectors were fought tooth and nail. Even a mention of disinvestment in the public sector units (PSUs) made the Left leaders see red.

"Now, there is no such pressure on Singh. There is no common minimum programme to stop him from doing anything he wants in his economic models for the country," a senior Left leader pointed out.

So, the UPA-II has started the process of disinvestment in PSUs, as announced in Pranab Mukherjee's budget.

There is talk of increasing limits of foreign direct investment (FDI) across sectors, while the insurance sector will be opened up. There is even a Bill seeking to allow FDI in higher education, which the Left is vehemently opposing.

But unlike in UPA-I, the Left now doesn't have the numbers to make its voice count in the Lok Sabha.

It has been reduced to a nuisance, with no power to change policies or even push for a more pro-people, pro-labour and pro-poor agenda.

In UPA-I, the Left had made a concerted effort to be protectionist as far as economy was concerned. The result was that when the economy was hit by the global recession, Left leaders proudly claimed credit for ensuring that India did not go down with the rest of the world.

They pointed out that they had not allowed Indian banking to be as influenced by global trends as Singh would have wanted.

The other area where the Left essentially functioned as a watchdog in UPA-I was in preventing greenfield mining.

Left leaders and intellectuals have clearly blamed the nexus between politicians and the mining mafia as the real reason behind the Maoist problem.

All India Forward Bloc general secretary Debabrata Biswas contended that successive UPA governments had been basically following the LPG policy - liberalisation, privatisation and globalisation.

"(Then finance minister) Chidambaram, Montek Singh Ahluwalia and company failed to introduce liberalisation policies in the capital and finance markets. They didn't give extra mileage to capitalists or corporate houses because every time they tried, there were checks by the Left parties. We prevented all these things, including greenfield mining," he said.



Article: Inclusive Growth in India - Agriculture, Poverty and Human Development

Article from:Indian Journal of Agricultural Economics Article date:April 1, 2008Author:Rao, V MCopyrightCopyright Indian Society of Agricultural Economics Jul-Sep 2008. Provided by ProQuest LLC. All inquiries regarding rights or concerns about this content should be directed to customer service. (Hide copyright information)
 
 
 
 
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Inclusive Growth in India - Agriculture, Poverty and Human Development, S. Mahendra Dev, Oxford University Press, New Delhi, 2008, Pp. xxv+399. Rs.695.00.

India's Five Year Plans have so much overlap and repetitiveness that the late Professor Rajakrishna is reported to have remarked about the Sixth Five Year Plan that it was only the sixth version of the First Five Year Plan! However, each plan does strive to project what may be called its signature theme to distinguish itself from the predecessors. The Eleventh Five Year Plan which is now (March, 2008) managing the Indian economy has chosen the signature theme of "Inclusive Growth". The book under review is a timely and useful …

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  • May 24, 2010, 4:29 PM IST

Death Deepens Disquiet in the Darjeeling Hills

By Krishna Pokharel

AFP/Getty ImagesMadan Tamang was slain on Friday as he prepared to celebrate his party's founding.

An ethnic movement for a separate state for India's Gorkhas has been brewing in the tea-growing hills of Darjeeling for decades, but it took a tragic turn Friday with the murder of  Madan Tamang, one of the  movement's leading lights.

Mr. Tamang was the president of All India Gorkha League, a 93-year-old party of ethnic Indian Nepalis whose ancestors are believed to have come to Darjeeling, which is now in India's West Bengal state, from the southern foothills of the Himalayas in the late18th and 19th centuries. The community of fighters, which traces its roots to the princely state of Gorkha in what is now western Nepal, took on the mighty East India Company of the expanding British Empire only to become the empire's loyal fighters later on.

Starting about two years ago, Mr. Tamang's group has been facing a challenge from the younger and considerably more fiery Bimal Gurung for leadership of the movement for a separate homeland for the Nepali-speaking Gorkhas who see themselves as distinct from the rest of the Bengali-speaking state.

In 2007, Mr. Gurung defected from another Gorkha party that had waged a violent movement in the late 1980s to start the Gorkha Janmukti Morcha (Gorkha People's Liberation Campaign). After a series of protests and strikes since 2008, the party has been leading barely-moving negotiations with the West Bengal state and national governments for a "Gorkhaland" that would also include some territories from the southern plains. Mr. Tamang has said the broader demand is unconstitutional and would hurt the goal of achieving autonomy from West Bengal.

On Friday morning, as Mr. Tamang prepared to mark his party's founding day, a flotilla of about 100 people carrying traditional Nepali Khukuri daggers descended upon him. His supporters ran helter-skelter and the police present for his protection were unable to react in time, according to Kunda Lal Tamta, a senior West Bengal police officer.

The assailants fled as speedily as they came, leaving Mr. Tamang in a pool of his own blood with stab wounds in his shoulder and stomach. He died while being taken to hospital.

In the complaint filed with police, a member of the All-India Gorkha League alleged that Mr. Gurung's campaign was behind the attack that came on the anniversary of former Prime Minister Rajiv Gandhi's assassination by a militant separatist.

A local journalist said the 64-year-old Mr. Tamang had distinguished himself as the more moderate proponent of a separate state for India's Gorkha community. Although his mass support was dwindling, he was still seen by the educated elites of Darjeeling as the "voice of reason, courage and a fine political personality," Udhyan Rai, the managing editor of the popular Darjeeling Times web site told India Real Time.

Mr. Gurung could not be reached for comment but Pradeep Pradhan, vice-president of the Gorkha Janmukti Morcha, denied the allegations.

"Mr. Tamang opposed our party's policies but we had respect for him," Mr. Pradhan said. "With his death, we lost an asset of Darjeeling."

Darjeeling, known for its view of the sunrise over snow-clad Kanchenjunga peak and its black and oolong teas, has been in mourning for Mr. Tamang. Shops, schools and government offices remain shut and there are few vehicles on the road, local residents said over the phone.

"People are infuriated and deeply disturbed by the murder of the only good and honest leader that they had," Ava Aliyah Rai Ali, a 23-year-old housewife and post-graduate student in Darjeeling said over phone. "We want statehood, of course. But not in this way."

http://blogs.wsj.com/indiarealtime/2010/05/24/death-deepens-disquiet-in-the-darjeeling-hills/

Death Deepens Disquiet in the Darjeeling Hills

Wall Street Journal (blog) - Krishna Pokharel - ‎4 hours ago‎
An ethnic movement for a separate state for India's Gorkhas has been brewing in the tea-growing hills of Darjeeling for decades, ...

Darjeeling shutdown affects tourists visiting the hill town

Oneindia - ‎21 hours ago‎
Darjeeling, May 23 (ANI): Hundreds of tourists have been left stranded in Darjeeling hill town in the wake of a sudden strike that followed the murder of ...

Candlelight rally in Darjeeling to pay homage to Madan Tamang

Oneindia - ‎May 22, 2010‎
Darjeeling, May 23 (ANI): Residents of Darjeeling staged a candlelight rally to protest the killing of All India Gorkha League president Madan Tamang. ...

GJM seeks CBI probe into Tamang murder

Times of India - Deep Gazmer - ‎15 hours ago‎
DARJEELING: Gorkha Janmukti Morcha, which is under increasing pressure after ABGL chief Madan Tamang's murder, on Sunday called for a CBI inquiry into the ...

Darjeeling defies GJM call, shuts down

Indian Express - ‎May 22, 2010‎
The writ of Bimal Gurung and the Gorkha Janamukti Morcha (GJM) did not run in Darjeeling today after the All India Gorkha League (AIGL) president, ...

GJM plunges into crisis as prominent leaders desert party (Lead)

Thaindian.com - ‎55 minutes ago‎
People in the hills are peace loving," Chhetri told mediapersons in Kalimpong town, the second largest city in the Darjeeling Hills. ...

Police probing GJM 'hand' in Tamang murder

The Hindu - ‎19 hours ago‎
... in a conspiracy to murder Akhil Bharatiya Gorkha League (ABGL) president Madan Tamang, who was stabbed to death in Darjeeling on May 21. ...

CID probe ordered into Tamang killing, top GJM members quit

The Hindu - ‎1 hour ago‎
He said Special IGP Pankaj Dutta has been sent to Darjeeling and IGP (CID) NN Pande will leave on Tuesday in connection with the probe. ...

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Sakaal Times - ‎3 hours ago‎
SILIGURI: Special IG and DIG, Darjeeling range Ramesh Babu today said the Criminal Investigation Department (CID) would investigate the murder case of Akhil ...

Huge procession turns out at Tamang's funeral

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Siliguri, May 24 (PTI) Thousands of people in Darjeeling today poured onto the streets braving rain to join the silent funeral procession of slain All India ...

Tamang murder: suit against GJM chief and wife

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Darjeeling, May 23: Darjeeling police filed suit against Gorkha Janmukti Morcha (GJM) leader Bimal Gurung and his wife for alleged involvement in the ...

Thousands of people gathered for last journey of beloved leader, Madan Tamang

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Tension continues to prevail in Darjeeling hills after the murder of Gorkha ...

MyNews.in - ‎May 23, 2010‎
Siliguri: In West Bengal, tension still prevails in Darjeeling hills after the ghastly murder of the President of All India Gorkha Leauge Madan Tamang in ...

Slain Gorkha leader Madan Tamang funeral today

Samachar Today (blog) - ‎10 hours ago‎
In West Bengal, 12-hour dawn to dusk bandh began in three hills sub-division – Darjeeling, Kurseong and Klimpong from this morning. ...

Gorkha leader Madan Tamang killed, Darjeeling tense

Indian Express - ‎May 21, 2010‎
State govt. has failed to give protection to his citizens be it is in MIdnapur, Lalgarh or Darjeeling hence this is a fit case to introduce Emergency Rule ...

Top Gorkha leader fatally stabbed in Darjeeling

TopNews - Rajvir Khanna - ‎May 23, 2010‎
Having a senior political personality in the Darjeeling hills, Mr. Tamang was well known for his opposition to the GJM. He was among the people who met Mr. ...

Top Gorkha leader stabbed to death in Darjeeling

The Hindu - Rabin Giri - ‎May 21, 2010‎
BRUTALITY ON THE HILLS: Madan Tamang, president of the Akhil Bharatiya Gorkha League, struggles for his life after being stabbed in Darjeeling on Friday. ...

GJM press and publicity chief quits

Press Trust of India - ‎4 hours ago‎
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Darjeeling on the boil after Gorkha leader is killed

Indian Express - ‎May 21, 2010‎
The movement for a separate state of Gorkhaland in the Darjeeling hills took an ugly turn today when Madan Tamang, the outspoken veteran who headed the All ...

Darjeeling tense after Gorkha leader's murder

Daily News & Analysis - Sumanta Ray Chaudhuri - ‎May 21, 2010‎
Kolkata: The Darjeeling Hills in West Bengal, already boiling due to the Gorkhaland agitation, plunged into further turmoil on Friday after All India Gorkha ...

GOING DOWNHILL

Calcutta Telegraph - ‎18 hours ago‎
As he lay in a pool of blood in a Darjeeling street, waiting to die from his assassins' blows, Madan Tamang captured all that has gone horribly wrong for a ...

Darjeeling tense; Tamang aides blame GJM

IBNLive.com - ‎May 21, 2010‎
Kolkata: Gorkha leader Madan Tamang, president of the Akhil Bharatiya Gorkha League, was stabbed to death in Darjeeling on Friday, leading to a spontaneous ...

Tamang murder case: Some more arrests made

All India Radio - ‎18 hours ago‎
In West Bangal , the Darjeeling police today arrested some more persons in connection with the murder of Gorkha League leader Madan Tamang and vendalism in ...

FIR against Bimal Gurung, Roshan Giri in Tamang murder case

Hindustan Times - ‎May 22, 2010‎
Meanwhile, for the first time in the hills, an apolitical candle light march was taken out by residents of Darjeeling to condemn the murder. ...

GJM chief, wife named in Tamang assassination case

Times of India - Deep Gazmer - ‎May 22, 2010‎
DARJEELING: Faced with widespread criticism for their alleged inaction, police on Saturday registered cases against Gorkha Janmukti Morcha chief Bimal ...

FIR filed against top GJM leaders

Hindustan Times - ‎May 22, 2010‎
Darjeeling continued to be tense on Saturday, a day after Gorkha leader Madan Tamang was stabbed to death. Police complaints were filed against 11 people, ...

Sikkim Police on lookout for Madan Tamang's killers

Press Trust of India - ‎6 hours ago‎
... the killing of All India Gorkha League chief Madan Tamang as they could have fled Darjeeling and entered the state, senior police officials said today. ...

Gorkha League leader killed, Darjeeling tense

NDTV.com - ‎May 21, 2010‎
Tamang recently opposed GJM's stand on an interim set-up for Darjeeling hills and demanded Gorkhaland instead. GJM has been opposed to ABGL since it sees ...

Murder accused in Sikkim: Cops

Calcutta Telegraph - ‎18 hours ago‎
Darjeeling, May 23: Two days after the murder of ABGL president Madan Tamang, police fear that the main accused, all members of the Gorkha Janmukti Morcha's ...

FIR filed against GJM chief in Tamang case

IBNLive.com - ‎May 22, 2010‎
Darjeeling: Darjeeling continued to be tense on Saturday, a day after the murder of Gorkha League leader Madan Tamang. FIRs have been registered against 11 ...



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Caste-based census against statute: RSS

The RSS has said that caste-based census is against the idea of a casteless society envisaged by leaders like Babasaheb Ambedkar in the Constitution and will weaken the ongoing efforts to create social harmony.

Sangh sarkaryawah Bhaiyyaji Joshi, however, told the media here on Sunday that it was not against registering citizens under various categories like Open, SCs, STs, OBCs etc. "The RSS has from beginning been striving for a society without any caste sense. We are not against registering categories, but we oppose registering castes."

Joshi, however, said yardsticks should be fixed to provide reservations to OBCs, and it would not be proper to do it without holding discussions among various social groups and communities. "Currently, there are different yardsticks in different states."

Claiming the current census doesn't have any means to identify and segregate the illegally living foreigners in the country, Joshi said, "It would not be proper to use this census for providing Unique Identification card." He said the cards should be issued only after confirming the persons' nationality.

The RSS general secretary also drew attention

towards the human-itarian crisis owing to the ongoing blockade agitation in Manipur.


GJM leader resigns, more likely to follow

The Gorkha Janmukti Mocha — accused of conspiring to kill All India Gorkha League (AIGL) president Madan Tamang — faces the threat of a spate of resignations, with Anmol Prasad, an important central committee member, already putting in his papers on Sunday evening in protest against Tamang's killing.

There were others, including Dr Harka Bahadur Chhetri, who were reportedly contemplating similar steps.

GJM sources confirmed that Prasad had quit. A well-known advocate of Darjeeling, Prasad used to head the "special study group", a wing engaged in study of various aspects related to the movement for separate statehood. He was one of the few GJM leaders who went to Tamang's house to pay homage on Saturday but was not allowed to go in by Tamang's son Sanyog Tamang.

Dr Harka Bahadur Chhetri, a Kalimpong-based leader of the GJM, too, was said to have claimed if there was the slightest proof of the GJM's involvement in Tamang's murder, he would also resign from the party. There were rumours of Amar Lama, Tamang's blood brother, also resigning. However, Lama told The Indian Express: "I am in a state of mourning now and it would continue till the funeral tomorrow. Till then I will not announce my decision."

For the third consecutive day on Sunday, shops and other establishments remained closed in a spontaneous response to Tamang's killing. Only a handful shops in Singmari — an area dominated by GJM chief Bimal Gurung — were open.

The GJM, which announced a 12-hour bandh in the hills to coincide with Tamag's funeral on Monday, saw its stock and posters go down on Sunday as Darjeeling's "democracy wall" in Chowkbazar — famous for its public proclamations by reigning political outfits — was taken over by the Democratic Front, a conglomerate of various political parties including the AIGL and the Communist Party of Revolutionary Marxists (CPRM), both opposed to the GJM. Posters of the Democratic Front proclaimed that Tamang was Darjeeling's "first martyr for democracy". For the past couple of years, the "democracy wall" had been the exclusive domain of the GJM and its frontal organisations.

The Democratic Front leaders complained that the government was dithering in taking action against Tamang's killers. "We have been urging the state government to impose the rule of law in Darjeeling. So far, no action has been taken against the culprits and they have been given enough time to escape either to Nepal or to Sikkim," said AIGL general secretary Laxman Pradhan.

K L Tamta, IG, North Bengal, admitted that on Friday the police arrangement for Tamang was not adequate despite his orders to the Darjeeling police to provide him with proper security. "A probe has been ordered to look into the lapses on the part of the administration," he added.


60% Indians suffer financial exclusion

January 23, 2008 15:06 IST

Around 60 per cent of India's population was deprived of access to financial institutions, a top official of National Bank for Agriculture and Rural Development said on Wednesday.

In most of the developed countries, this 'financial exclusion' was however less than 15 per cent, said NABARD Chief General Manager A Ramanathan, while inaugurating a three-day international conference on 'Micro Finance: a tool to eradicate Poverty` at Pondicherry University.

He said that micro finance activities offered multifarious opportunities for research, career training and as an alternative credit delivery system for rural uplift. Ramanathan wanted universities and higher educational institutions to offer courses in micro finance both at the graduation and post-graduation level.

Vice Chancellor of Pondicherry University J A K Tareen said micro finance programmes would relieve poor villagers of their backwardness through financial accessiblity. He said that women empowerment was essential for the speedy progress of the nation. With the affluent sections overshadowing the poor in a globalised and market-driven economy, there was every need to address the economic issues of the poor villagers.

Chief General Manager of Small Industries Development Bank [ Get Quote ] of India [ Get Quote ] (South Zone), Chennai K M Nair said banks would consider the poor as entry-level customer and the SIDBI had been helping promotion of micro finance activities.

SIDBI was adopting a scientific approach to augment the capacity of the borrowers through a flexible approach. Around 250 delegates from different parts of the country and also those from the UK, US, Germany [ Images ], Sudan and Bangladesh participated in the deliberations.

Global Call for Renewed Effort to Meet Connectivity Targets
World Telecommunication Development Conference Opens Today
LCT to Lead to Equal Opportunirties and Inclusive Growth: A Raja


14:51 IST

      

The ITU World Telecommunication Development Conference (WTDC-10) opened today in Hyderabad with a call to meet the connectivity targets by 2015. This high-level global meeting will focus on development priorities in telecommunications and information and communication technologies (ICT) and agree on the programmes, projects and initiatives to implement them.

      Mr P. J. Thomas, Secretary, Department of Telecommunications, Government of India, was elected Chairman of the Conference.

      The Minister of Communications and Information Technology, Government of India, Mr A. Raja welcomed delegates from around the world to Hyderabad. Speaking on the occasion Mr Raja said, ICTs can facilitate faster development of various social and economic sectors in any country. ICTs lead to equal opportunities for all mankind, especially perceptible improvement for the most vulnerable parts of society in rural and remote areas, contributing to the inclusive growth of society, he added. The Minister noted India's impressive growth in the field of software development and in the applications of space technology which are aimed at national development in areas like communication, broadcasting, distance education, earth exploration services, and space sciences. Mr Raja hoped that increased general awareness among the masses created by the knowledge society would bring enhanced global peace, justice and respect for each other, which are the corner stones for the elimination of disparity and poverty worldwide.

      Hyderabad is an emerging hub for ICTs in the region. Participants from around the world have gathered here to promote international cooperation, regional initiatives and partnerships that can sustain and strengthen telecommunication and ICT infrastructure and institutions in developing countries.

    ITU Secretary-General Dr. Hamadoun Touré said What is decided and defined here over the next two weeks will shape not just the future of ICT development over the next four years, but the future shape of the very world we live in. It will change the way in which social, economic and ICT development happens, he added.

    Appreciating India's ICT success story, the Director of ITU's Telecommunication Development Bureau, Mr. Sami Al Basheer said, India is a remarkable place for ITU to hold the World Telecommunication Development Conference. He said India has shown, in very concrete and dramatic terms, the power of ICTs to stimulate social and economic development. He added that while each country has its own challenges to face, in the end overall goals are the same. Emphasizing need to constantly innovate and keep up with dynamics in the market place, Mr. Al Basheer said for future needs better targeted and more positive regulation has to be invented that focuses on incentives rather than obligations. He proposed a new vision complemented with dedicated resources to deal with the issues of connectivity in least developed countries.

      In his opening remarks the Conference Chairman, Mr P.J. Thomas said that the  world now acknowledges that technological progress and innovations are long term drivers of economic growth, especially in developing countries. As a key technology producer, ICT has contributed to a positive macroeconomic impact in GDP growth besides providing spillovers and externalities which are bringing enormous benefits for the economy. New services generated by ICT in the forms of e-commerce, e-finance, and e-governance are contributing towards greater economic efficiency while raising the living standard of citizens."

      Following the conclusion of the World Summit on the Information Society in 2005, this year marks a crucial mid-term period to review the implementation of its objectives. The Hyderabad Action Plan, which will set the agenda for telecommunication and ICT development over the next four years, will be a key input to the overall review of the Millennium Development Goals (MDGs) at the United Nations in New York next September.

      The World Telecommunication Development Conference is convened every four years. In Hyderabad edition, one thousand two hundred and twenty six delegates from 142 member countries of ITU are participating in the conference. The Delegations from six countries are led by the Ministers. Discussions at WTDC-10 in Hyderabad will focus on:

·     Broadband connectivity

·     Digital broadcasting

·     Open source software

·     Cyber security

·     E-accessibility for people with disabilities

·     E-applications, including health

·     Human capacity building

·     Emergency communications

·     ICT policy and regulation

 

SP/AT



23/05/2010

10,000 more BSF personnel to be roped in for anti-Naxal ops

New Delhi: The government is likely to rope in about 10,000 more BSF personnel to strengthen anti-Naxal operations in Chhattisgarh and Orissa, which have witnessed a spurt in violence.

Official sources said said five battalions (5,000 personnel) of the BSF would be inducted into the operation for now and another five thousand would be added later.

The force already has about 10,000 men taking part in anti-Maoist operations.

The sources said the number of Border Security Force (BSF) personnel is being increased to strengthen operations in Chhattisgarh and Orissa.

The BSF had played a crucial role in the Gadchiroli district of Maharashtra, where security forces have been able to inflict heavy damage on the Naxals, they said.

A number of Naxals were apprehended there, besides large areas reclaimed from the Maoists' clutches.

While CRPF is the main central force fighting the Naxals, the government had inducted both BSF and Indo Tibetan Border Police (ITBP) personnel in the operations.

At present, five battalions of the ITBP are involved in anti-Naxal operations. All together, over 60,000 central securitymen are helping the state police in conducting operations in naxal affected areas.

Incidentally, former BSF chief E N Ram Mohan, who was appointed by the Union Home Ministry to enquire into the causes and lapses for the April six Dantewada incident in which 76 securitymen lost their lives, had recently hinted that BSF and ITBP were better trained to handle insurgency.

"Preferably, in insurgency, BSF and ITBP should be deployed," he had said.

Source: PTI


23/05/2010

Army wants laser-based weapons on its futuristic tanks

New Delhi: Looking to strengthen its armoured capabilities, the Indian Army wants its futuristic Main Battle Tank to be equipped with high-powered lasers for taking on enemy rockets, aircraft and electro-optical sensors.

"High/medium-energy level laser is expected to be a lethality option against rockets, air vehicles, light ground vehicles, antennas of armoured vehicles and electro-optical sensors," the Army stated in its long-term technology plans submitted to the Defence Ministry.

Officials said concerned DRDO labs are already working in this direction and developing the capability.

They added that these capabilities might be deployed on the Arjun Mk-II project, which was recently cleared by the Defence Ministry after the Army decided to place orders for another 124 Arjun MBTs with the DRDO.

It also wants the futuristic Main Battle Tank (FMBT) to have an Identification Friend or Foe (IFF) system to decrease chances of own tanks firing at each other during battle.

The Army wants the new tank to have stealth technologies in form of paints and materials to provide limited invisibility and for scrambling and avoidance of detection by enemy sensors.

It also seeks technologies which would enable officials sitting in operational headquarters to have video conferences with the tank commanders in field.

The Army wants the DRDO and the defence industry to provide it with technologies which would help the new FMBT protection against hard-kill weapons such as the Anti-tank Guided missiles, missiles and artillery shells.

The Indian Army has a fleet of over 3,000 tanks in its fleet, which includes a majority of Russian-origin T-72 and T-55, which are likely to be replaced in the near future.

Source: PTI

23/05/2010

Ambani brothers bury their differences

New Delhi: In a major development, the two Ambani brothers--Mukesh and Anil-- today decided to bury their differences and create an environment of harmony, co-operation and collaboration between their groups.

Ambani brothers bury their differences

"All existing non-compete agreement between the two groups executed in January 2006 cancelled," Anil Ambani group said in a statement.

The harmony comes within a few days of the Supreme Court declining to give any relief to younger brother in the gas dispute.

"A new, simpler non-compete agreement executed limited to only gas-based power generation. RIL (Mukesh) and RNRL (Anil) will expeditiously negotiate gas supply arrangement as per the Supreme Court order and hope to conclude negotiations very soon," it added.

The cancellation of the existing non-compete agreement will provide enhanced operational and financial flexibility to both groups and greater ability t participate in high growth sectors such as oil and gas, petrochemical, telecom, power and financial services, the Anil Ambani Group said.

However, RIL has agreed not to enter into the gas-based power generation business for the period up to March 2022.

Ambani brothers bury their differences

In an identical statement, Reliance Industries said "RIL, led by Mukesh D Ambani, and Reliance ADA Group companies, Reliance Communications, Reliance Infrastructure, Reliance Natural Resources, and Reliance Capital, led by Anil D Ambani, have today approved and signed an agreement canceling all existing non-compete arrangements entered into between the two groups in January 2006 pursuant to the scheme of reorganisation of the Reliance Group and entered into a new simpler, non-compete Agreement with respect to only gas-based power generation.

These developments will eliminate any room for further disputes between the two groups, on matters relating to the scope and interpretation of the non-compete obligations, RIL added.

"RIL and Reliance Natural Resources (RNRL) will expeditiously negotiate gas supply arrangements in accordance with the orders of the Hon?ble Supreme Court of India. We hope to conclude these negotiations very soon, the RIL statement further said.

RIL and Reliance ADA Group are hopeful and confident that all these steps will create an overall environment of harmony, co-operation and collaboration between the two groups, thereby further enhancing overall shareholder value for shareholders of both groups, the RIL statment added.

Source: PTI


24/05/2010

Raja has done no wrong: PM

NEW DELHI: Assuring that corruption would be dealt with at any level, Prime Minister Manmohan Singh on Monday said auction of airwaves to telecom firms was above board and gave a clean chit to Communications Minister A. Raja, pending conclusion of a probe.

"What he (Raja) did was implement a policy that was already in place," the prime minister told a press conference here, referring to the process followed for auction of spectrum for second-generation (2G) telecom services at prices prevailing in 2001.

"It would have been unfair to new entrants if a new yardstick was used."

The question was raised in the wake of charges that precious airwaves for 2G were sold to telecom firms at throwaway prices, resulting in losses worth billions of dollars, seen in the light of $15 billion the government will get from 3G spectrum auction.

Both the Bharatiya Janata Party (BJP) and the Communist Party of India-Marxist (CPI-M) have called for Raja's resignation, calling 2G auction a 15-billion scam.

"If the minister refuses to resign, the prime minister should sack him," the BJP said.

But the Prime Minister said no policy was flouted.

"You have to look at it in proper perspective," he said, adding both the watchdogs, the Telecom Regulatory Authority of India (TRAI) and the Telecom Commission, had approved the policy on 2G auctions.

He said since complaints were received and the matter was being probed by the Central Vigilance Commission (CVC) and the Central Bureau of Investigation (CBI), it would be improper to comment any further.

"Our government has been very clear right from the beginning that corruption is a problem. If I come to know that there is any involvement at any level, we will take action," Manmohan Singh said.

This was the first formal press meet to mark the completion of one year of his second term as prime minister of the United Progressive Alliance (UPA) government.

Source: IANS


Hrithik, Barbara manhandled by crowd

Noida: Bollywood heartthrob Hrithik Roshan and his Mexican co-star Barbara Mori were manhandled by the crowd during a promotional event for their newly released film 'Kites' here on Sunday. Thousands turned up at the TGIP Mall here to get a sneak peek at the glamourous pair and the security men were unable to cope with the massive crowd.

Other Top Stories


How many marks will PM give to UPA-II?

New Delhi, May 23 -- How many marks will Prime Minister Manmohan Singh give to the performance of the UPA-II in the first year which has generally been a sweet-n-sour affair? This is the question being asked in political circles ahead of Singh's first press conference in New Delhi on Monday since taking over as PM for the second time after a full term. When the UPA-I had completed one year in May 2005, Singh gave six out of ten marks to its performance but said he was not satisfied with it.

He had emphasised the need for reforms in government, political system and judiciary. The Prime Minister had then recalled that a journalist had asked what score he would give to himself and his government.

"And I said 6/10. For some, this may seem a reasonable mark to get but I have never been satisfied with 60 per cent," Singh had said, adding, "I do sincerely believe that we can do better.

In the coming year, that will be our endeavour. "I am not satisfied with what we have been able to do in terms of implementing new policy initiatives," he had said in a frank appraisal of his government's working at the Congress Working Committee meeting shortly before the UPA-I completed one year.

At that time, Congress President Sonia Gandhi, who is also UPA Chairperson, had congratulated the Prime Minister and his colleagues in government for 'satisfactory' performance during one year of rule. This time, there has been no meeting of the Congress Working Committee to take stock of the government's working or to deliberate on the Maoist menace in the backdrop of the major strikes by Naxalites in Chhattisgarh that have sent the alarm bells ringing.

While the first anniversary of the UPA-I had seen the Left parties, key outside supporters, staying away, the anniversary function of the UPA-II scheduled yesterday was postponed in the wake of the Air India Express plane crash at Mangalore. In the UPA-I, Singh had addressed the first press conference on September 4, 2004, over three months after taking over as the first Prime Minister of a Congress-led coalition.

It was the first formal press conference by a Prime Minister in more than a decade which had seen the likes of Atal Bihari Vajpayee, I K Gujral and H D Deve Gowda at the helm.


Uday Shankar dance academy in Almora

Dehradun, May 23 -- It a place where dance maestro Uday Shankar once stayed and introduced a unique style of dance "the fusion of local ballet and classical dance." Decades later, Falsima, near Almora in Uttarakhand, will witness a gala opening of a prestigious dance academy which has been named after him. "The building in which Uday Shankar Academy of Dance and Music will be housed is now ready at Falsima. The academy will, however, be inaugurated shortly," revealed the Director of the State Directorate of Culture, Beena Bhatt. Incidentally, Falsima is a quiet, hilly place about 7 km from Almora where Uday Shankar experimented with classical dance and music.

Although not many know this, two Bollywood personalities also stayed with Uday Shankar for some time during his sojourn in Almora - Zohra Sehgal and Guru Dutt.



Social responsibility a must for students

College students should look for innovative programmes and workshops underlining social and environmental issues and educate the public at large. The UT Department of Higher Education is all set to add interdisciplinary approach in colleges across all disciplines from the coming academic session.

For the first time, compulsory orientation lectures and workshops on themes such as gender equality, inclusive growth and so on would be organised to encourage interdisciplinary approach in colleges. Also, student societies in college campuses like AIDS awareness, drug de-addiction, heritage preservation society and so on would be established, and every student would be required to become a part of one or more such societies.

"To promote integration of curriculum with the society through establishment of student societies in each college campus, these societies would be a part of the annual college curriculum calendar. These steps would help students establish contact with their immediate environment or link between educational institutional and the community at large," said UT Higher Education Director Ajoy Sharma, who has framed the guidelines for functioning of these societies.

Students will be required to put in specified number of hours under such societies. An annual planner giving details of various activities to be orgainsed will be prepared by each society well in advance. Teachers would also assist students to prepare the roadmap, convert it into various subtasks and identify the steps under each subtask minutely.

Also, they would be responsible in identifying resource persons for workshops and programmes.

Various societies to be formed in colleges* Drug De-addiction Society* AIDS Awareness and Public Health Society* Heritage Preservation and Promotion Society* Orphanages and Old Age Homes Society* Best from Waste Society* Gender Equality Society* Environment Awareness Society* Community Hygiene and Sanitation Society* Traffic Awareness and Road Safety Society

Functions of a society* Identify groups of faculty members including head of departments, who can lead a particular society, thereby utilising their managerial and leadership skills* Conduct motivational workshops to connect students with various societies as per their interests* Form a committee in each society with a chairperson, secretaries and members, along with some standbys to function in their absence* Organise brainstorming sessions to identify activities that can be carried out throughout the year* Publicise themselves to motivate and enroll students and educate the public* Create an end of the year evidence of series of activities organised by documenting them in any medium* Follow-up planning and progression of activities, tasks and subtasks throughout the year and review them at the end of the year for evaluation and reformulation

Will support UPA if Trinamool withdraws support: Mulayam

Samajhwadi Party chief Mulayam Singh Yadav on Sunday made it clear that his party was ready to become part of the UPA government in case the Trinamool Congress walked out of the alliance. "Yes it is true," Mulayam Singh said when asked whether his party had told the UPA that it was ready to join the ruling alliance if the Trinamool Congress withdrew its support.

"We want stability and prosperity of the country. We also want to keep communal forces away. In fact, our support to the UPA government is issue-based and only to keep the communal forces at bay. But our relationship with the Left is as friendly as it has been before. We have together done a number of programmes and taken a number of decisions together," said the SP chief.

He also said Amar Singh, the former party general secretary who quit the party early this year, had no chance of coming back to the SP fold. "Neither he will come to us, nor we will accept him. That chapter is closed," Mulayam told reporters in Kolkata at the end of the party's three-day executive meet.

Mulayam said neither the votebank of the SP nor that of the Left Front had reduced after the Lok Sabha polls. He said two SP candidates were contesting municipal elections in the KMC on the support of the Left Front. The SP chief said Kironmoy Nanda, who has been appointed the general secretary after the ouster of Amar Singh, had been given the charge of strengthening party base in West Bengal.

On the issue of why the SP did not vote with the Left Front on cut motions, Mulayam shrugged off the issue saying instances of "this sort happened in politics".

He also criticised a number of policies of the UPA government relating to price rise and tackling Naxalism.

"Their policies are not in the interest of the people. According to the Planning Commission, the number of poor in the country has increased from 27 crore to 40 crore. I have raised questions in Parliament a number of times on the issue," Mulayam said.

On Naxal menace, he said the issue could be solved by discussions. "This issue cannot be solved by guns and sticks and putting forces behind them. They have some valid demands. This issue should be solved by discussions and consulting all parties," the SP chief added.


Same-gotra marriage: Khap meet a no-show

A large white tent in the middle of an arid ground in Jind served as the venue for a Sarv Maha Khap Panchayat meeting on Sunday. Organisers who were expecting "thousands of supporters" to join their ranks to announce "threats" aimed at everyone from the government to young couples who choose to marry within the same gotra (sub-caste) were in for a disappointment. By 12 noon, two hours after the meeting was to have begun, barely 150 senior citizens had showed up. Ironically, most of the fiery speeches made during the day were targeted at the 'youth' who were conspicuous by their absence.

The Sarv Maha Khap, a gathering of khap leaders and representatives from across Haryana, Rajasthan and Uttar Pradesh, is a centuries-old tradition that calls on the 'elders' of the Jat community to unite in order to take socially crucial decisions. Yet, from the speeches made on Sunday, it is clear that the khap is now fighting for its own existence. "At the meeting in Kurukshetra in April, at least 1,000 people were present. Increasingly, people are beginning to lose interest in these meetings because each one ends without any substantial decision. The young people are completely disinterested in these matters. What can we do?" a septuagenarian khap member, Ram Pal Singh, from Hansi village, said.

At Sunday's meeting, the khap members were hoping to reach a decision on how best to persuade the government into bringing about an amendment to the Hindu Marriage Act, 1955, that will ban marriages within the same gotra. Instead all of Sunday afternoon was devoted to bickering, infighting, and petty power struggles amongst the khap elite. The meeting was boycotted by various factions of the Sarv Khap because they felt that organiser Satbir Chhahal was "too politically motivated". One of the these anti-Chhahal factions will hold another meeting on Tuesday.

The meeting was attended by Mahendra Singh Tikait, the Bhartiya Kisan Union leader who is also the sarpanch of the Balian Khap. Earlier in the day, he had addressed a gathering at Sisauli at the BKU headquarters where he threatened to 'gherao' Parliament if the government did not bring about amendment to the Hindu Marriage Act. However, at the Jind meeting, Tikait appeared uncomfortable in his new role as the patriarch of khap panchayats. He refused to sit with the rest of the khap leadership on a makeshift podium, and chose to keep his speech rather dull. "If we want to win this fight, we will have to put up a united front. We have to organise ourselves under a united banner," he told the crowd. Taking Tikait's advice, the Jind faction has decided to send a delegation to the Tuesday's meeting.

After going into an impromptu huddle with the khap leaders at the meeting, Chhahal finally announced the outcome of the meeting. "If the government does not comply with our demand by June 20, we will enforce a shutdown in Delhi," he said.

Students' NGO to hold rock contest for underpriviliged

NGO "Saathi", run by students of the Carmel Convent School, Chandigarh, will organise a rock band competition on May 27 at the Rock Garden. The funds generated from the programme will go to 310 underpriviliged children of the Alternate Innovative Education Centre, adopted by the NGO. Various schools, including Vivek High School and St John's High School will participate in the competition.

The NGO is aiming to make this is a yearly event. "We are organising a rock concert as a fund raiser activity for the slum children. The aim is to send these students to mainstream schools, where they can have an equal opportunity to display their talents and complete their education at a level that fully matches those who are more privileged," said Saathi founder Puneeta Singh.

HIGHLIGHTS - Prime Minister's news conference

Mon, May 24 11:05 AM

Prime Minister Manmohan Singh speaks during the closing ceremony of the sesquicentennial celebrations of the... Enlarge Photo Prime Minister Manmohan Singh speaks during the closing ceremony of the sesquicentennial celebrations of the...

Prime Minister Manmohan Singh gave his rare news conference on Monday to mark the ruling coalition's first year in office.

Following are the highlights of Prime Minister Manmohan Singh's news conference:

ECONOMY

* Expects inflation to moderate to 5-6 percent by December 2010

* Expects 8.5 percent GDP growth in FY11

* Medium-term target to achieve 10 percent economic growth annually

* Prices showing signs of moderating trend

* Prices continue to be matter of deep concern

* Government attaches highest priority on containing inflation

* Together with state governments will take more steps to bring down prices

DIPLOMACY

* India willing to discuss all outstanding issues with Pakistan

* Nuclear agreement with the United States will move forward

POLITICS

* Prime Minister hopes all political parties will support nuclear liability bill

(Compiled by Bappa Majumdar, Rajesh Kumar Singh and Abhijit Neogy; editing by Malini Menon)

24/05/2010

Manmohan sings the G tune: Gandhi, Gursharan and 2G airwave

New Delhi: It was billed to be the first major press conference of Prime Minister Manmohan Singh on his government's performance. But it ended up on trivial issues on Sonia, Rahul, wife and retirement.

Manmohan sings the G tune: Gandhi, Gursharan and 2G airwave

To a question from the media on Monday here, Singh said he was in a "privileged" position to be taking advice from his wife Gursharan Kaur as well as Congress chairperson Sonia Gandhi.

"I am privileged to have advice of Shrimati Sonia Gandhiji and my wife," the prime minister said when asked whose advice he values most - his wife or Sonia Gandhi's.

"Both deal with different issues and I welcome both their advice," he said, prompting laughter in the packed hall. The prime minister smiled too.

Manmohan sings the G tune: Gandhi, Gursharan and 2G airwave

On Rahul Gandhi he said the Congress General Secretary was doing a good job and that he (Singh) was ready to vacate his seat when asked.

On whether he would make way for Rahul during his current tenure, Singh said he was ready to make place for "anybody" whom the Congress party decides.

"Let me say say that I sometimes feel that younger people should take over as when the Congress party makes that judgement and I will very happy to make place for anybody the Congress party" decides, Singh said.

The prime minister was speaking to mediapersons to mark the first year of his United Progressive Alliance government at the Vigyan Bhavan.

The previous one during his first term, which the Prime Minister's Office described as his first national press conference, was organised Sep 4, 2004 at the same venue.

He also said there was no gap between him and Congress chairperson Sonia Gandhi.

Manmohan sings the G tune: Gandhi, Gursharan and 2G airwave

"Sonia Gandhi is the chairperson of the UPA (United Progressive Alliance), she is the president of Congress and I am a member of Congress so there is no question of any gap between me and her," he told a press conference to mark the first year of his UPA government.

He was replying to a question by journalist whether there was any difference of opinion between him and the Congress president over issues.

"Any elements of distrust or mistrust are not there between her and me," he added.

He also said he had a task to complete and there was no question of his retirement.

"I have been given a work and it is incomplete yet; and till I complete it, there is no question of my retirement," he said.

Giving a clean chit to his Communications Minister A. Raja pending conclusion of investigations, the Prime Minister said the process followed on auction of airwaves to telecom companies was above board.

Manmohan sings the G tune: Gandhi, Gursharan and 2G airwave

"What he (Raja) did was implement a policy that was already in place," the prime minister told a press conference here, referring to process followed for auction of spectrum for second-generation (2G) telecom services at prices prevailing in 2001.

"It would have been unfair to new entrants if a new yardstick was used."

The question from the media was raised in the wake of charges that precious airwaves for 2G were sold to telecom firms at throwaway prices, resulting in losses worth billions of dollars, seen in the light of $15 billion the government will get from 3G spectrum auction.

Both the Bharatiya Janata Party (BJP) and the Communist Party of India-Marxist (CPI-M) have called for Raja's resignation, calling 2G auction a 15-billion scam.

"If the minister refuses to resign, the prime minister should sack him," the BJP said.

But the prime minister said no policy was flouted.

"You have to look at it in proper perspective," he said, adding both the watchdog, the Telecom Regulatory Authority of India (TRA) and the Telecom Commission, had approved the policy on 2G auctions.

He said since complaints were received and the matter was being probed by the Central Vigilance Commission (CVC) and the Central Bureau of Investigation (CBI), it would be improper to comment any further.

"Our government has been very clear on corruption. If I come to know that there is any involvement at any level, we will take action," Manmohan Singh said.

Manmohan sings the G tune: Gandhi, Gursharan and 2G airwave

This was the first formal press meet to mark his second term as the prime minister of the year-old United Progressive Alliance (UPA) government.

On Afzal Guru hanging, he said that law of the land would decide the fate of parliament attack convict Afzal Guru, who has been on death row since 2002.

"I think there is a law of the land and there is a legal process. In the (Afzal Guru) case the law will take its course," Manmohan Singh told reporters here.

Asked if the delay in hanging the Jaish-e-Mohammed terrorist from Jammu and Kashmir would label his government as soft, the prime minister said it was a matter of perception to call any state soft or hard and "perceptions can vary".

The 40-year-old convicted key plotter of the 2001 attack that killed 13 people in the high-security Indian parliament was sent to the death row in 2002. His sentence was upheld by the Supreme Court. The sentence was scheduled to be carried out on Oct 20, 2006, but his execution was stayed after his wife sought clemency from the president of India.

On the economy, he said India targets 10 percent near-term growth. Putting inclusive growth and taming price rise on top of United Progressive Alliance's (UPA) agenda, Singh set a medium-term target of 10 percent annual economic expansion for India with moderate inflation.

"The agenda for our second term seeks to strengthen a pro-people policies and programmes initiated by our government since 2004," the prime minister said in his opening remarks to journalists, predicting a 8.5-percent growth for this fiscal.

According to the Oxford-Cambridge educated economist-prime minister, social and economic uplift of the mebers of Scheduled Caste and Scheduled Tribes, other backward classes, minorities and women will continue to receive priority attention in our plans.

He stressed on the need for a rapidly growing economy, which generates productive employment and resources to finance the government's "ambitious" social and economic agenda.

"Our medium term target is to achieve a growth rate of 10 percent per annum. I am convinced that given our savings and investments rate this is an achievable target," he said.

Manmohan sings the G tune: Gandhi, Gursharan and 2G airwave

Underlining that the Indian economy had done well in the wake of global recession, the prime minister said his government's first priority was to protect the country's economy from the global slowdown and ensure momentum of inclusive growth is not interrupted.

"Our annual growth rate had averaged nine percent for four years before the crisis. It reduced to 6.5 percent in 2008-09 and recovered to 7.2 percent in 2009-10. We expect 8.5 percent in this financial year," he said.

"This is widely regarded s one of the best performances among the larger economies of the world."

Referring to high inflation, the prime minister said as the result of steps taken by his government, there were signs of prices showing a moderation. He said the situation was being closely monitor and urged state governments, too, to chip in.

"Prices continue to be a matter of deep concern. The government has attached the highest priority to containing inflation so that there is no distress to the common man," the prime minister said.

"It is true inflation is a problem and affecting people. I can assure that by Decembe, inflation will be brought town to 5-6 percent."

Source: IANS

4/05/2010

Tackling Maoists: Army commanders told to be ready

New Delhi: With the Maoists' offensive intensifying in Dantewada, Army commanders last week were told by General V K Singh to be prepared for all eventualities and have a plan of action ready on paper in case the attacks on paramilitary forces and civilians by Left wing extremists escalate in the coming weeks.

Tackling Maoists: Army commanders told to be ready

Government sources told The Indian Express that rampaging Naxal attacks in India's economic heartland were discussed threadbare during the Army Commanders Conference, including the possibility of Army being inducted into operations in a worst case scenario. The assessment of the military brass is that Naxal violence could worsen in the coming days and that there would be pressure on both the government and the Army to deliver in case more Dantewada-like (April 6) incidents happened in the near future.

Tackling Maoists: Army commanders told to be ready

While the Manmohan Singh government has taken a stance of not involving the Army in the anti-Naxal operations at present and Defence Minister A K Antony says that such a decision would not be taken through a public debate, the matter has been discussed at the top level with Home Minister P Chidambaram in the picture.

Tackling Maoists: Army commanders told to be ready

In fact, the Home Minister at one point wanted some Rashtriya Rifles battalions to be moved out from J&K for Naxal duties, but the South Block conveyed that it was not possible to denude the counter-insurgency grid in the Valley.

Sources said the Army commanders were in synergy with General Singh about preparing the overall strategy in case the military was asked to take lead in the anti-Naxal operations. During the debate on Naxal issue, the General-Officer-Commanding-in-Chiefs, whose commands could be involved in the operations, were told to work out the command and control structure. It is understood that commanders of Eastern Command, Southern Command, Central Command and South-West Command were told to earmark troops in case the Army was asked to step in by the government.

Source: The Indian Express


Demographics of India

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Demographics of India
India-demography.png
Population of India, 1961-2003
Population:1,180,166,000 (2010 est)
Growth rate:1.548% (2009 est)
Birth rate:22.22 births/1,000 population (2009 est)
Death rate:6.4 deaths/1,000 population (2009 est)
Life expectancy: 69.89 years (2009 est)
–male:67.46 years (2009 est)
–female:72.61 years (2009 est)
Fertility rate:2.72 children born/woman (NFHS-3, 2008)
Infant mortality rate:{{{infant_mortality}}}
Age structure:
0-14 years:31.1% (male 190,075,426/female 172,799,553) (2009 est)
15-64 years:63.6% (male 381,446,079/female 359,802,209) (2009 est)
65-over:5.3% (male 29,364,920/female 32,591,030) (2009 est)
Sex ratio:
At birth:1.12 male(s)/female (2009)
Under 15:1.10 male(s)/female (2009)
15-64 years:1.06 male(s)/female (2009)
65-over:0.90 male(s)/female (2009)
Nationality:
Language:
Official:Hindi, English

The demographics of India are remarkably diverse. India is the second-largest populated country in the world with over 1.18 billion people (estimate for April, 2010) and consists of more than one-sixth of the world's population. It contributes 17.31% of the world's population and projected that India will be the largest populated country by 2025 surpassing China, and by 2050 it will have over 1.6 billion people.[1][2] India has more than two thousand ethnic groups, and every major religion is represented, as are four major families of languages (Indo-European, Dravidian, Austro-Asiatic and Tibeto-Burman languages) as well as a language isolate (the Nihali language[3] spoken in parts of Maharashtra).

Further complexity is lent by the great variation that occurs across this population on social parameters such as income and education. Only the continent of Africa exceeds the linguistic, genetic and cultural diversity of the nation of India.[4]

Contents

[hide]

[edit] Salient features

India occupies 2.4% of the world's land area and supports over 17.5% of the world's population. India has more arable land area than any country except the United States,[5] and more water area than any country except Canada and the United States. Indian life revolves mostly around agriculture and allied activities in small villages, where the overwhelming majority of Indians live. As per the 2001 census, 72.2% of the population[6] lives in about 638,000 villages[7] and the remaining 27.8%[8] lives in more than 5,100 towns and over 380 urban agglomerations.[9]

[edit] Religious demographics

Main article: Religion in India
Table 1: 2001 Religious Data Composotion[10]
Religious CompositionPopulation(%)
Hindus827,578,86880.5%
Muslims138,188,24013.4%
Christians 24,080,0162.3%
Sikhs19,215,7301.9%
Buddhists7,955,2070.8%
Jains4,225,0530.4%
Other Religions & Persuasions 6,639,6260.6%
Religion not stated727,5880.1%
Total1,028,610,328100.0%
N.B. "Total" excludes Mao-Maram, Paomata and Purul subdivisions of Senapati District of Manipur state.

India contains the majority of the world's Zoroastrians, Sikhs, Hindus, Jains and Bahá'í. India is also home to the third-largest Muslim population in the world after Indonesia and Pakistan.

Religious majorities vary greatly by state. Jammu and Kashmir and Lakshadweep are Muslim majority states; Nagaland, Mizoram and Meghalaya are Christian majority; Punjab is mostly Sikh; It is to be noted that while participants in the Indian census may choose to not declare their religion, there is no mechanism for a person to indicate that he/she does not adhere to any religion. Due to this limitation in the Indian census process, the data for persons not affiliated with any religion may not be accurate.

The table below summarizes the findings of the 2001 census with regards to religion in India:

  1. All figures in %.
  2. Others including Bahá'ís, Jews, and Parsis.
  3. Tribal Animists (and non religious) are grouped under Others after 1926 (1931 census onwards)
Table 2: Census information for 2001*
Composition↓Hindus[11]↓ Muslims[12]↓ Christians[13]↓ Sikhs[14]↓ Buddhist[15]↓ Jains[16]↓ Others[17]↓
 % total of population 200580.5%13.4%2.3%1.9%0.8%0.4%0.6%
10-Yr Growth % (est '91–'01)[18]* 20.3%29.5%22.6%18.2%24.5%26.0%103.1%
Sex ratio† (avg. 944)93594010098959559401000
Literacy rate (avg. 79.9)75.560.090.370.473.095.050.0
Work Participation Rate40.431.339.737.7 40.632.948.4
Rural sex ratio[18]944953 1001895958937995
Urban sex ratio[18] 9229071026886944941966
Child sex ratio (0–6 yrs)925950964786942870976

N.B. Table excludes Mao-Maram, Paomata and Purul subdivisions of Senapati District of Manipur state.

* The data is "unadjusted" (without excluding Assam and Jammu and Kashmir); 1981 census was not conducted in Assam and 1991 census was not conducted in Jammu and Kashmir.

† No. of females/1000 males.

[edit] Linguistic demographics

43% of the Hindus speak Hindi while the rest speak Bangla, Telugu, Marathi, Tamil, Gujarati, Kannada,Malayalam, Assamese and other languages. Almost 45% of the Muslims speak Urdu while the rest speak Bangla, Hindi, Kashmiri, Malayalam, Telugu, Tamil, Gujarati, Assamese and other languages. About one-third of the Christians speak Malayalam, one-sixth speak Tamil while the rest speak a variety of languages. In total, there are 1,652 languages and dialects spoken in India.[19]

Languages of India by number of native speakers as per the 2001 census[20]
Rank↓Language↓ Speakers↓Percentage↓
1Hindi dialects[21] 422,048,64241.03%
2Bengali83,369,7698.11%
3 Telugu 74,002,8567.19%
4Marathi71,936,8946.99%
5 Tamil 60,793,8145.91%
6Urdu51,536,1115.01%
7Gujarati 46,091,6174.48%
8Kannada37,924,0114.69%
9 Malayalam 33,066,3923.21%
10Oriya33,017,4463.21%
11 Punjabi 29,102,4772.83%
12Assamese13,168,4841.28%
13 Maithili 12,179,1221.18%
14Bhili/Bhilodi9,582,9570.95%
15 Santali 6,469,6000.63%
16Kashmiri5,527,6980.54%
17 Nepali 2,871,7490.28%
18Gondi2,713,7900.27%
19Sindhi 2,535,4850.25%
20Konkani2,489,0150.24%
21 Dogri 2,282,5890.22%
22Khandeshi2,075,2580.21%
23Kurukh1,751,4890.17%
24Tulu 1,722,7680.17%
25Meitei (Manipuri)1,466,705*0.14%
26Bodo 1,350,4780.13%
27Khasi1,128,5750.112%
28 Mundari 1,061,3520.105%
29Ho1,042,7240.103%

N.B. The percentage of speakers of each language for 2001 has been worked out on the total population of India (excluding Mao-Maram, Paomata and Purul subdivisions of Senapati District of Manipur state due to cancellation of census results).

* Excludes Mao-Maram, Paomata and Purul of Senapati District.

[edit] CIA World Factbook demographic statistics

The following demographic statistics are from the CIA World Factbook, unless otherwise indicated.

Chart showing the Total Fertility Rate of Indian states (SRS survey 1996-98)[22]
Total Population

1,166,079,217 (July 2009 est. CIA)[23] 1,028.7 million (2001 Census final figures, March 1 enumeration and estimated 124,000 in areas of Manipur that could not be covered in the enumeration)

Map showing the population density of each district in India
Rural Population

72.2%, male: 381,668,992, female: 360,948,755 (2001 Census)

Urban Population


Age structure:
0–14 years: 30.8%, male: 188,208,196, female: 171,356,024
15–64 years: 64.3%, male: 386,432,921, female: 364,215,759
65+ years: 4.9%, male: 27,258,259, female: 30,031,289 (2007 est.)

Median age:
25.1 years

Population growth rate

1.548% (2009 est.)

Birth rate

21.76 births/1,000 population (2009 est.)

Death rate

6.4 deaths/1,000 population (2009 est.)

Map showing the literacy rate of each district in India
Literacy rate

79.9%

Percent of the population under the poverty line

22% (2006 est.)

Unemployment Rate

7.8%

Net migration rate

− -0.05 migrant(s)/1,000 population (2007 est.)

Sex ratio


at birth: 1.12 male(s)/female
under 15 years: 1.098 male(s)/female
15–64 years: 1.061 male(s)/female
65 years and over: 0.908 male(s)/female
total population: 1.064 male(s)/female (2006 est.)

Infant mortality rate

total: 30.15 deaths/1,000 live births (2009 est.) male: 34.61 deaths/1,000 live births female: 25.17 deaths/1,000 live births

Life expectancy at birth


total population: 69.89 years
male: 67.46 years
female: 72.61 years (2007 est.)

Total fertility rate

2.72 children born/woman (2009 est.) The TFR (Total number of children born per women) according to Religion in 2001 was :

Hindus — 2.0 Muslims — 2.4 Sikhs — 1.6 Christians — 2.1 Buddhists — 2.1 Jains — 1.4 Animists and Others — 2.99 Tribals — 3.16 Scheduled Castes — 2.89[citation needed]

Nationality


noun: Indian(s)
adjective: Indian

Religions

Hindu 80.5% Muslim 13.4% Christian 2.3% Sikh 1.8% Buddhists 0.8% Jains 0.4% others 0.7% unspecified 0.1% (2001 Census) [24][25] [26].[27]

Scheduled Castes and Tribes

Scheduled Castes: 16.2% (2001 Census) Scheduled Tribes: 8.2% (2001 Census)

Languages: See Languages of India and List of Indian languages by total speakers. There are 216 languages with more than 10,000 native speakers in India. The largest of these is Hindi with some 337 million (the second largest being Bangla with some 207 million). 22 languages are recognized as official languages. In India, there are 1,652 languages and dialects in total.[19][28]

[edit] 2020 Estimate

Table 2: Population Projections (in millions)

YearUnder 1515–6465+Total
2000361 604451010
2005368673511093
2010370747581175
2015372819 651256
2020373882761331

Source: Based on P.N. Mari Bhat, "Indian Demographic Scenario 2025", Institute of Economic Growth, New Delhi, Discussion Paper No. 27/2001.

[edit] Ethnic groups

[show]
v  d  e
Ethnic groups of India


This tree diagram depicts the relationships of the major ethnic, linguistic and religious groups in India. For example, an H under Gujarati implies a Hindu, Gujarati-speaking Indian of Indo-Aryan ancestry. However this is not a hard and fast rule. For example, in India many members of the Muslim community are of Arab, Iranian or Turkish, and Afghan origins and the Christian community are of Jew and European origins. This list excludes caste groups like the Dalits which is a socio-political identity across linguistic, religious and racial lines. Indeed, it should be noted that the terms 'Indo-Aryan' and 'Dravidian' refer more to the linguistic difference rather than racial differences.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Indians

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Indo-Aryans
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mongoloids
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Dravidians
 
 
 
 
Tribals

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Marathi (मराठी माणसं)
 
Gujarati (ગુજરાતી લોકો)
 
Punjabi
(ਪੰਜਾਬੀ)
 
Kashmiri
(کٲشُر)
 
Hindi (हिन्दी)
 
Oriya (ଓଡିଆ)
 
Bengali
(বাঙালী)
 
Assamese
(অসম)
 
Meghalayans
 
Mizo
 
Tripuri
(ত্রিপুরা)
 
Manipuri
(মনিপুরি)
 
Naga
 
Lepcha(Róng)
(རྫོང)
 
Arunachali
(རྫོང་ཁ་)
 
Tamizh (தமிழர்)
 
Telugu
(తెలుగు)
 
Kannadiga
(ಕನ್ನಡಿಗ)
 
Malayali
(മലയാളി)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 



H, M, B, J
 
H, M, J
 
S, H, M
 
S, H, M
 
H, M
 
H, C
 
M, H
 
H, M
 
C, H, T
 
C, T
 
H, T
 
H, C
 
C, T
 
B, H
 
B, T, H
 
H, C, M, A
 
H, M, C
 
H, M, C
 
H, C, M, A

The national Census of India does not recognize racial or ethnic groups within India,[29] but recognizes many of the tribal groups as Scheduled Castes and Tribes (see list of Scheduled Tribes in India).

It should be noted that Indo-Aryan, Dravidian, Tibeto-Burman and Austro-Asiatic are mainly linguistic terms and denote speakers of these linguistic groups.

For a list of ethnic groups in the Republic of India (as well as neighboring countries) see ethnic groups of the Indian subcontinent or the tree diagram above.

[edit] Genetics

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[edit] Y-chromosome DNA

Y-Chromosome DNA Y-DNA represents the male lineage, The Indian Y-chromosome pool may be summarized as follows where haplogroups R1a, H, R2, L & NOP comprise generally more than 80% of the total chromosomes.[30]

  • H ~ 30%
  • R1a ~ 20%
  • R2 ~ 15%
  • L ~ 10%
  • NOP ~ 10% (Excluding R)
  • Other Haplogroups 15%

[edit] Mitochondrial DNA

Mitochondrial DNA mtDNA represents the female lineage. The Indian mitochondrial DNA, which is primarily made up of Haplogroup M[31]

[edit] See also

[edit] References

  1. ^ BBC - India's population 'to be biggest' in the planet
  2. ^ United States Census Bureau - International Data Base (IDB)
  3. ^ SIL International. "Ethnologue report for Language Isolate". http://www.ethnologue.com/show_family.asp?subid=90087. Retrieved 2007-10-11. 
  4. ^ India, a Country Study United States Library of Congress, Note on Ethnic groups
  5. ^ GM Crops Around the World – an accurate picture GM Freeze, Table 3
  6. ^ Rural-Urban distribution Census of India: Census Data 2001: India at a glance >> Rural-Urban Distribution. Office of the Registrar General and Census Commissioner, India. Retrieved on 2008-11-26.
  7. ^ Number of Villages Census of India: Number of Villages Office of the Registrar General and Census Commissioner, India. Retrieved on 2008-11-26.
  8. ^ Rural-Urban distribution Census of India: Census Data 2001: India at a glance >> Rural-Urban Distribution. Office of the Registrar General and Census Commissioner, India. Retrieved on 2008-11-26.
  9. ^ Urban Agglomerations and Towns Census of India: Urban Agglomerations and Towns. Office of the Registrar General and Census Commissioner, India. Retrieved on 2008-11-26.
  10. ^ [1]
  11. ^ "Tables: Profiles by main religions: Hindus". Census of India: Census Data 2001: India at a glance >> Religious Composition. Office of the Registrar General and Census Commissioner, India. http://www.censusindia.gov.in/Census_Data_2001/India_at_glance/religion.aspx. Retrieved 2008-11-26. 
  12. ^ "Tables: Profiles by main religions: Muslims". Census of India: Census Data 2001: India at a glance >> Religious Composition. Office of the Registrar General and Census Commissioner, India. http://www.censusindia.gov.in/Census_Data_2001/India_at_glance/religion.aspx. Retrieved 2008-11-26. 
  13. ^ "Tables: Profiles by main religions: Christians". Census of India: Census Data 2001: India at a glance >> Religious Composition. Office of the Registrar General and Census Commissioner, India. http://www.censusindia.gov.in/Census_Data_2001/India_at_glance/religion.aspx. Retrieved 2008-11-26. 
  14. ^ "Tables: Profiles by main religions: Sikhs". Census of India 2001: Census Data 2001: India at a glance >> Religious Composition. Office of the Registrar General and Census Commissioner, India. http://www.censusindia.gov.in/Census_Data_2001/India_at_glance/religion.aspx. Retrieved 2008-11-26. 
  15. ^ "Tables: Profiles by main religions: Buddhists". Census of India: Census Data 2001: India at a glance >> Religious Composition. Office of the Registrar General and Census Commissioner, India. http://www.censusindia.gov.in/Census_Data_2001/India_at_glance/religion.aspx. Retrieved 2008-11-26. 
  16. ^ "Tables: Profiles by main religions: Jains". Census of India: Census Data 2001: India at a glance >> Religious Composition. Office of the Registrar General and Census Commissioner, India. http://www.censusindia.gov.in/Census_Data_2001/India_at_glance/religion.aspx. Retrieved 2008-11-26. 
  17. ^ "Tables: Profiles by main religions: Other religions". Census of India: Census Data 2001: India at a glance >> Religious Composition. Office of the Registrar General and Census Commissioner, India. http://www.censusindia.gov.in/Census_Data_2001/India_at_glance/religion.aspx. Retrieved 2008-11-26. 
  18. ^ a b c "Census of India.". Census of India. Census Data 2001: India at a glance >> Religious Composition. Office of the Registrar General and Census Commissioner, India. http://www.censusindia.gov.in/Census_Data_2001/India_at_glance/religion.aspx. Retrieved 2008-11-26. 
  19. ^ a b Mother Tongues of India According to the 1961 Census
  20. ^ Abstract of speakers' strength of languages and mother tongues - 2000, Census of India, 2001
  21. ^ includes Western Hindi, Eastern Hindi, Bihari languages, Rajasthani languages and Pahari languages.
  22. ^ National Population Policy of India
  23. ^ CIA World Factbook -- India
  24. ^ Religious Composition Census of India: Census Data 2001: India at a glance >> Religious Composition. Office of the Registrar General and Census Commissioner, India. Retrieved on 2008-11-26.
  25. ^ International Religious Freedom Report 2007 — India International Religious Freedom Report 2007. U.S. Department of State.
  26. ^ CIA's The World Factbook — India
  27. ^ Bureau of South and Central Asian Affairs — Background Note: India
  28. ^ Rupert Goodwins. Smashing India's language barriers. ZDNet UK.
  29. ^ Kumar, Jayant. Census of India. 2001. September 4, 2006. Indian Census
  30. ^ Hammer et al. 2005, S. Sahoo et al. 2006, R. Trivedi et al. 2007, Zhao et al. 2008
  31. ^ Semino et al. 2000, Kivisild et al. 2003, Metspalu et al 2004, Rajkumar et al. 2005, Chandrasekar et al. 2007, Gonzalez et al. 2007

[edit] External links


[show]
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Life in India

Arts and Entertainment · Caste · Cinema · Citizenship · Climate · Cuisine · Culture · Demographics · Economy · Education · Flag · Geography · Government · History · Holidays · Languages · Law · Police · Literacy · Military · Politics · Religion · Sports · Transport

[show]
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Demographics of Asia

Sovereign
states

Afghanistan · Armenia1 · Azerbaijan1 · Bahrain · Bangladesh · Bhutan · Brunei · Burma2 · Cambodia · People's Republic of China · Cyprus1 · East Timor3 · Egypt4 · Georgia4 · India · Indonesia · Iran · Iraq · Israel · Japan · Jordan · Kazakhstan4 · North Korea · South Korea · Kuwait · Kyrgyzstan · Laos · Lebanon · Malaysia · Maldives · Mongolia · Nepal · Oman · Pakistan · Philippines · Qatar · Russia4 · Saudi Arabia · Singapore · Sri Lanka · Syria · Tajikistan · Republic of China5 · Thailand · Turkey4 · Turkmenistan · United Arab Emirates · Uzbekistan · Vietnam · Yemen


States with limited
recognition

Abkhazia1 · Nagorno-Karabakh · Northern Cyprus · Palestine · South Ossetia1


Dependencies,
autonomies,
other territories

Aceh · Adjara1 · Akrotiri and Dhekelia · Altai · British Indian Ocean Territory · Buryatia · Christmas Island · Cocos (Keeling) Islands · Guangxi · Hong Kong · Inner Mongolia · Iraqi Kurdistan · Khakassia · Macau · Nakhchivan · Ningxia · Papua · Sakha Republic · Tibet · Tuva · West Papua · Xinjiang


1 Sometimes included in Europe, depending on the border definitions2 Officially known as Myanmar3 Sometimes included in Oceania, and also known as Timor-Leste4 Transcontinental country5 Commonly known as Taiwan
[show]
v  d  e
Ethnic groups in Asia

Sovereign
states

Afghanistan · Armenia1 · Azerbaijan1 · Bahrain · Bangladesh · Bhutan · Brunei · Burma2 · Cambodia · People's Republic of China · Cyprus1 · East Timor3 · Egypt4 · Georgia4 · India · Indonesia · Iran · Iraq · Israel · Japan · Jordan · Kazakhstan4 · North Korea · South Korea · Kuwait · Kyrgyzstan · Laos · Lebanon · Malaysia · Maldives · Mongolia · Nepal · Oman · Pakistan · Philippines · Qatar · Russia4 · Saudi Arabia · Singapore · Sri Lanka · Syria · Tajikistan · Republic of China5 · Thailand · Turkey4 · Turkmenistan · United Arab Emirates · Uzbekistan · Vietnam · Yemen


States with limited
recognition

Abkhazia1 · Nagorno-Karabakh · Northern Cyprus · Palestine · South Ossetia1


Dependencies,
autonomies,
other territories

Aceh · Adjara1 · Akrotiri and Dhekelia · Altai · British Indian Ocean Territory · Buryatia · Christmas Island · Cocos (Keeling) Islands · Guangxi · Hong Kong · Inner Mongolia · Iraqi Kurdistan · Khakassia · Macau · Nakhchivan · Ningxia · Papua · Sakha Republic · Tibet · Tuva · West Papua · Xinjiang


1 Sometimes included in Europe, depending on the border definitions2 Officially known as Myanmar3 Sometimes included in Oceania, and also known as Timor-Leste4 Transcontinental country5 Commonly known as Taiwan



January February 2007 
Year 13    No.122

The Rajindar Sachar Committee Report


Demography

1. Introduction

Muslims constitute the second largest religious group in India and thus the largest religious minority. The 2001 census enumerated India's Muslim population at over 138 million, and by 2006 the Muslim population would be over 150 million. India's Muslim population is amongst the largest in the world, exceeded only by Indonesia's and close to the Muslim populations of Pakistan and Bangladesh. Moreover, it is larger than the total populations of most countries of the world.

In India, populations of all major religions have experienced large growth in the recent past, but the growth among Muslims has been higher than the average. Religious differentials in growth were observed in the pre-Independence period as well. The last intercensal decade however, has shown a reversal in the trends in growth; not a negative growth but a decline in intercensal growth for India, from 23.9% during 1981-91 to 21.5% during 1991-2001. This has occurred in both the largest religious communities, Hindus and Muslims, with the latter showing a larger fall from 32.9% to 29.5% or 3.4 percentage points, and the former from 22.7% to 19.9% or 2.8 percentage points. Thus, the growth differential has narrowed and is an early indication of convergence occurring over the medium term.

2. Population Size and Growth

At the beginning of the twentieth century, the Muslim population (in the post-Partition areas) was close to 30 million and grew rather slowly up to 1921 and later moderately, as did the overall population. Partition led to large-scale migration, and in 1961, well after the major Partition-linked migration had ended, India's Muslim population was enumerated at 47 million, about 10% of the total population of 439 million. The latest census, conducted in 2001, enumerated 138 million Muslims out of India's total population of 1029 million.

Over the forty-year period 1961 to 2001, the (total) population more than doubled, from 439 million to 1,029 million, an increase of 134%. The rapid growth is attributed to a sharp fall in mortality; though fertility also declined, especially over the later portion of the period, the decline has not matched that in mortality. Population growth has been high for all the major religions over the period with the Muslim population increasing rapidly from 47 million to 138 million. This amounts to an increase of 194%, just short of trebling, and much higher than the average increase of 134%. The Muslim population growth has been close to 30% in each of the four intercensal decades since 1961, with the latest decade showing a fall to a level just below 30%.

The annual growth rate has averaged 2.7% over the period 1961-2001, well above the national average of 2.1%. Hindus and Christians show marginally lower growth, 2.0 percent, Jains even lower, 1.8 percent, and Sikhs and Buddhists, marginally higher, 2.2 percent.

In 1961, the largest group, Hindus, accounted for 83.5% of India's population followed by Muslims, with 10.7%; other minorities had much smaller shares - Christians 2.4%, Sikhs 1.8%, and Buddhists and Jains accounted for less than 1% of the total population. By 2001, the share of Hindus had fallen to 80.5% and that of Muslims had risen to 13.4%. This rise of 2.7% points between 1961 and 2001 is a consequence of the higher than average growth among Muslims. The shares of other minorities have remained nearly the same, though some small changes, a rise followed by a fall, occurred among Christians and Sikhs. The rise in the share of Muslims has been less than three percentage points over the four decades, that is, less than one point a decade.

3. Spatial Distribution

The Muslims in India reside across the country and yet their concentration varies substantially. Besides, the demographic dynamics have changed over different periods in time and in different regions. The trends in the southern states are quite different from those in the north-central states. The majority of the Muslim population in India are in four states — Uttar Pradesh, West Bengal, Bihar and Maharashtra. Generally, large states also have large Muslim populations, as expected. However, Punjab and Orissa, with populations of over twenty million each, had fewer than one million Muslims.

While the growth has continued throughout the forty-year period 1961-2001, the recent intercensal decade, 1991-2001, has shown a decline in the growth rate of Muslims in most of the states; this is in keeping with a decline in the overall national population. The Muslim population increase was quite modest, below 20%, much below earlier levels in Tamil Nadu, Kerala and Andhra Pradesh.

4. Age-Sex Composition Of Population

4.1 …

4.2 Sex-Ratios

Most populations in the world have more women than men. At birth the share of boys is always higher, around 105 boys per 100 girls, but higher mortality among males compared to females leads to a sex composition favourable to females. However, India and some South and East Asian countries differ from this pattern. Female mortality was higher than male mortality in these parts though now this is not the case and the mortality gap is quite narrow. As a result, there are more men than women in India and the sex ratio (females per thousand males) is lower than 1000; for the period 1961-2001 this has hovered around 930. The Muslim population shows a similar pattern yet sustains an increasingly better sex ratio compared with the general population.

4.3 Child Sex Ratios

An associated indicator which exhibits relative social position in India is the child sex ratio (the number of female children under 5 for every 1000 male children under 5). As is well known, India is one of the few countries in the world to have a child sex ratio that is less than 1000. In addition, the overall child sex ratio in the country has been declining steadily during the last half century. It has declined from 976 in 1961 to 964 in 1971, 962 in 1981, 953 in 1991 and 927 in 2001. The low and falling child sex ratio is the result of two factors: excess female infant mortality (relative to male infant mortality) and female foeticide. Both in turn reflect parental discrimination against girls.

The NFHS data indicate that Muslims have the highest child sex ratio of any social group in the country. For instance, the child sex ratio among Muslims was 986 girls per 1000 boys in the age group 0-5 in 1998-99, significantly higher than the ratio of 931 among SCs/STs, 914 among other Hindus and 859 among other groups.

Surprisingly, even though Muslims already had the highest child sex ratio of any group in 1992-93, they were the only social group to experience a further increase in the ratio between 1992-93 and 1998-99. In contrast, Other Hindus experienced the largest decline (of about 5%) in the child sex ratio despite having the second-lowest child sex ratio in 1992-93.

5. Urbanization

India's population is predominantly rural. In 2001 only 27.8% lived in urban areas, cities and towns of various sizes, showing a low degree of urbanization. Moreover, the tempo of urbanization has been quite low after 1981, with only about two percentage points rise in the share of the urban population over each decade. The Muslim population is also predominantly rural, but the level of urbanization among them has been higher than the population as a whole. In 1961, while overall only 18.0% of the population lived in urban areas, 27.1% of the Muslim population did so. This substantial gap has persisted and in 2001, 35.7% of the Muslim population was urban compared to 27.8% of the overall population. Muslims have generally been relatively more urbanized even in the past. By and large, India's Muslim population is less linked to land than the overall population.

6. Demographic Processes

Population change is a product of three processes, mortality, fertility and migration. The higher than average growth rate of Muslims has often raised the question of why this is so. Obviously, one or more of these three factors is different for the Muslim population. We do have information on fertility and mortality by religion and hence can analyse this issue in some detail.

6.1 Mortality

Estimates from different surveys as well as indirect census-based estimates show that infant and childhood mortality among Muslims is slightly lower than the average. Separate estimates for rural and urban areas show that the lower than average child mortality among Muslims is partly on account of their higher urbanization. Within urban areas, Muslim childhood mortality level is very close to the average urban level. While Muslims enjoy some advantage in survival compared to the general population, the mortality among other large minority religious groups, Christians and Sikhs, is even lower than Muslims. Essentially, childhood mortality among Muslims is lower only compared to the Hindus.

Among SRCs, SCs/STs suffer from the highest infant and under-five mortality rate, followed by Other Hindus. Muslims have the second-lowest infant and under-five mortality rate of any SRC in India. This is somewhat surprising, given the economically disadvantaged position of Muslims. In virtually every region, with the sole exception of the Northeast, Muslims have the second-lowest infant and under-five mortality rates of any SRC (after the "Other" group). In the South and West, their relative position is even better than in other regions. For instance, in the South, the infant mortality rate among Muslims is as low as 29 per 1000 live births – significantly lower than the rate of 61 among SCs/STs and the rate of 52 among Other Hindus.

Muslims not only have among the lowest infant and under-five mortality rates of all SRCs in India, they also have experienced some of the largest declines in infant and under-five mortality of any social group during the 1990s. The only states where child mortality among Muslims has worsened – both in absolute terms as well as relative to other SRCs – are Madhya Pradesh and Rajasthan.

Why exactly Muslims should have some advantage in child survival over other SRCs despite their lower levels of female schooling and lower economic status is a question that needs further exploration. For instance, it would be important to know whether the advantage is the result of better infant feeding and care practices among Muslims.

...efforts were made from pooled data of two surveys, the NFHS-1 and NFHS-2, to construct life tables for Hindus and Muslims and the results show that the life expectancy for Muslims is higher than average by about one year. Besides, estimates of maternal mortality also show lower than average maternal mortality among Muslims. Broadly, it could be said that Muslims do have a slim advantage over the average in survival.

6.2 Fertility

The total fertility rate (TFR) is the most widely used summary indicator of fertility; this is the number of live births a woman has on an average during her lifetime, if she goes through the reproductive span, following a given age-specific fertility schedule. Religious differentials in fertility from various sources, surveys (NFHS-1 and 2) and the Census show that among the four large religious groups fertility is the lowest among the Sikhs, closely followed by the Christians and the highest among the Muslims. Various other surveys also corroborate the higher than average fertility among Muslims. There has been a large decline in fertility in all the religious groups; whereas in the pre-transition period the TFR was above 6, in recent years it has fallen below 4. Thus, the process of fertility transition is in progress in all communities. Fertility varies among Muslims according to socio-economic characteristics as well as on the level of the individual and there are large regional variations in fertility in India. While some states have reached a very low level fertility, with TFR close to 2.1, or near the replacement level, the north-central states have moderate levels of TFR, closer to 4. In states that have low fertility, the fertility of Muslims is also low, though higher than average. In fact, Muslims in the southern states have lower fertility than the average in the north-central states. For example, according to the NFHS-2, the TFR for Muslims in Kerala, Tamil Nadu, Andhra Pradesh and Karnataka as well as in Jammu and Kashmir was in the range 2.5 to 2.8, while that for the general population in Uttar Pradesh it was 4.0 and 3.8 in Rajasthan.

The relatively high fertility of a section of the population could be on account of various factors. A low age at marriage obviously is conducive to high fertility. However, data show that Muslims do not have a lower age at marriage than average. A point made on the higher fertility of Muslims was that the proportion of women married in reproductive ages was relatively high, because widow remarriage is well accepted in the Muslim community unlike the Hindus. However, recent data from the 2001 Census show that the marital status distribution of Muslim women is not notably different from that of the general population in the reproductive age groups, the ages that matter for fertility. The other important factor contributing to fertility differential is the use of contraceptives. Data on contraceptive practices (% of couples of reproductive age using contraception) for Muslims and the general population from various surveys, two by the Operations Research Group (ORG) in the 1980s and two by the NFHS in the 1990s, show that the use of contraception is widely prevalent among Muslims but to a lesser degree than the average. In contraceptive prevalence rate, there is a gap of about 10 percentage points between Muslims and the average. A careful examination reveals that it is the use of sterilization that shows a wide gap. Apparently, reversible methods are used relatively more commonly by Muslims compared to others. But sterilization is less popular among Muslims. 'Unmet need' for contraception is relatively high amongst Muslims and there is evidence of a large demand for reversible methods.

The facts do not support the common perception that Muslims shun family planning, as over one third of Muslim couples were reported to be using some contraception. Various other surveys also confirm that there is substantial contraceptive practice among Muslims (this is true in India and in several countries with large Muslim populations as well). However, the prevalence of practice is lower among Muslims than other SRCs in India and this is primarily responsible for keeping Muslim fertility above the average level. Use of contraceptives is known to be highly positively related to the level of education. Besides, as the level of education rises, the Muslim-non-Muslim differences narrow down.

6.3 Migration

Since the growth of the Muslim population has been higher than average in all the recent decades, there is a feeling that there is considerable international migration of Muslims into India. Detailed analyses for the decade 1981-91 showed that part of the higher than average growth of Muslims is accounted for by lower than average mortality, but a major part was explained by higher fertility. The contribution of migration, obtained as the residual, was relatively small, about one sixth of the growth differential between Hindus and Muslims. Other assessments also show that the contribution of migration to the growth differential is small. Thus, while international migration is also responsible for some of the growth in India's Muslim population, it plays only a minor role; the principal factor is the higher than average fertility.

6.4 Demographic Transition

Demographic transition is the process of shift from a regime of high fertility and mortality to low fertility and mortality; this generally begins with mortality decline and is followed by fertility decline. Most of the developed countries in the world have gone through this and have reached very low mortality and fertility. India too, is in transition, with mortality having fallen considerably, and fertility dipping especially after 1970. Of course, mortality is not yet very low; life expectancy has crossed 60 years but is much less than in the developed world that shows expectancies above 75 years. Besides, the TFR is close to 3, above the value of 2.1 that corresponds to the low replacement level. Hence it could be said that though India is well into transition it is yet to complete the process.

The Muslim population in most states is well into transition. There is a good deal of correspondence between overall fertility and Muslim fertility in the states, although the latter is higher than the average. Generally, Muslim fertility is a notch higher than overall fertility in some states, and in a few others, it falls within the same range. The gap between Muslim fertility and overall fertility is quite low in Jammu and Kashmir, Madhya Pradesh and Andhra Pradesh. Clearly, the Muslim population in India is well into transition, especially in all the large states, though it is behind the average. There is obviously some lag in its transition. Other evidence shows that the lag is of 10-15 years, that is, the fertility of the Muslim population at a point in time is closer to the average fertility 10-15 years ago.

7. Child Nutrition

Another important indicator of social well-being is child nutrition. Child malnutrition significantly increases the risk of infant and child death, with some estimates suggesting that child malnutrition is responsible for half or more of child deaths in the developing world. Unlike infant and under-five mortality, which is lower among Muslims than among most other SRCs, Muslims are worse off than most other groups in terms of child under-nutrition. For instance, Muslims suffer from the highest rates of stunting and the second-highest rates of underweight children among all social groups. In general, though, the differences across the social groups are not overly large, indicating that child malnutrition and low birth-weight are pervasive across all SRCs in India.

The evidence shows that Muslim children are at a slightly higher risk of child malnutrition than Other Hindu children. However, they are less likely to be underweight or stunted than SC/ST children. But in two regions – the North and the East – the rate of low birth-weight babies among Muslims actually increased sharply between 1992-93 and 1998-99, with Muslims performing much worse than the all-group average for the two regions. There is an enigma in the finding that Muslims have an advantage over Other Hindus in infant and under-five mortality but suffer a disadvantage in child nutrition rates. This incongruence is difficult to understand as most factors that are associated with low rates of infant and child mortality (e.g., delivery and utilization of high-quality health services, high female literacy, and good hygiene and child feeding practices) are also typically associated with low rates of child malnutrition.

8. Future Population Growth Prospects

Some projections show that the size of India's Muslim population would stabilize at about 320 million. Independent projections carried out to see how the results would vary if the replacement level is reached by 2041 yielded a figure of 340 million. Thus, the Muslim population is expected to rise, partly due to higher than replacement level fertility for some time and partly due to population momentum, to a level of around 320-340 million.

The question often asked is whether, and if so, when, will the Muslim population become the largest group? The counter position is that how does it matter which population is the largest. However, given the political and social environment, the debate continues and there is much speculation on this matter. A recent work (Joshi, A.P., M.D. Srinivas and J.K. Bajaj (2003), Religious Demography of India, Chennai: Centre for Policy Studies) examined this issue and by extrapolating the trends of the twentieth century, arrived at the conclusion that in India, the Muslim and Christian populations together would be close to the 50% mark around the year 2050. But this is for India including Pakistan and Bangladesh, that is, the pre-Partition area of India. There are two problems with this exercise. First, it fits a cubic function to the share of population and this is used to extrapolate the share of a community (the authors use the term Indian religionists to include Hindus, Sikhs, Buddhists, Jains as one group and the other group includes Christians and Muslims), and such a curve becomes steeper as time passes. Second, it assumes that the current trends would continue in the future. But now that fertility decline has been established among all communities, the fertility gap is seen as a transitory matter. As the process of fertility transition progresses, fertility would decline in all the large communities; once some communities reach a low level of fertility further decline would be slow, whereas those lagging, such as the Muslims, would catch up. This would thus narrow the gap, and eventually all communities would reach low fertility as has occurred in much of the developed world. Essentially, a convergence is expected and the present gap in fertility and population growth is not likely to persist forever. The question is how long it would take for the gap to close and what would be the growth differential during this period.

In order to project the share of the Muslim population, projections for the total population are required. Earlier projections assumed that Muslims would reach replacement level fertility ten years later than other communities. The projections further showed that the share of the Muslim population in India would rise somewhat, to just below 19% (320 million Muslims in a total population of 1.7 billion) and then stabilize at that level. If it should take a longer time for the gap to close, the share of the Muslim population would be correspondingly higher. Alternate projections on the assumption that both the Muslim and non-Muslim fertility would reach the replacement level but the former would take 10 or 20 years longer showed that by 2101 the Muslim population may reach around 320-340 million in a total population of 1.7-1.8 billion and the Muslim population share would be between 18 and 19 percent. Broadly, one could say that the Muslim population share is expected to rise from the current level but not expected to be much above 20 percent by the end of the century.

Recent experience of European countries shows that fertility in many populations has fallen well below replacement level and population sizes have begun to fall rather than stabilize at some 'ultimate level' as was presumed in the past. At this time, it is difficult to say whether this would happen for India as well in this century. If it does, the population sizes of the total and Muslim populations at the end of the century would be lower than those given by the projections cited above (results of some alternative projections indicate that the total population could be below 1.5 billion and the Muslim population below 300 million by the end of the century).

The pace of convergence depends on a number of socio-economic, political and programme factors, and the process will be hastened with the spread of mass education especially amongst women and girls and a sustained reduction in poverty across all population groups in India. While religion is an important element influencing the lifestyles of sizeable segments of citizens, its impact on regulating the human fertility of Muslims is not strong. For example, the contraceptive prevalence rate among Muslims, an overt expression of acceptance of the modern concepts of family planning, has been increasing in recent years nearing, 40%. Over 20 million Muslim couples currently use modern contraception practices and this number will grow if quality and choice based reproductive health care services are made accessible to Muslims across India. However, the relatively higher incidence of poverty and the widening gap in literacy between the Muslims and other comparable SRCs, particularly among women at young ages, could in fact impede the decline in Muslim fertility. Excepting Kerala, other states in advanced stage of fertility transition such as Tamil Nadu, Karnataka and recently Andhra Pradesh have achieved noteworthy declines in fertility without major improvements in human development parameters. But practically all well-designed research across the world has pointed out that improvements in female education associated with declines in poverty levels will facilitate a faster decline in human fertility and improvement in life expectancy. Both the above factors are important as exclusive goals to be achieved.

 


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Date : 04 Sep 2008
IV. Managing Resource Mobilisation

4.1 The saving and investment process in an economy is organised around a financial framework that facilitates economic growth. A well designed financial system promotes growth through effective mobilisation of savings and their allocation to the most productive uses by either following a centralised approach or a decentralised approach or a combination of both. Typically, economies with underdeveloped capital markets adopt a centralised approach, whereby financial intermediaries mobilise resources from savers and allocate them to borrowers. Traditionally, banks have played a critical role in the financial intermediation process as they are able to deal more appropriately with transaction costs and information asymmetries in a financial system. As financial markets develop, transaction costs and information asymmetries reduce, the decentralised approach for guiding the saving-investment process also gains significance, and households with surplus resources increasingly invest in capital market instruments. The historical experience shows that virtually in all the economies, including the market-intermediated ones, banks have played a central role in resource mobilisation and supporting the growth process, and that the development of banks and other intermediaries has itself facilitated the development of financial markets.

4.2 The genesis of banks' role in the resource mobilisation process lies in firms relying critically on external sources of finance, especially in their formative stages. In particular, banks have played a key role in coordinating investment efforts in many economies such as Belgium, Germany, Italy and Japan in engineering 'take-offs' during their critical phases of development. Resource mobilisation by banks became a critical factor in their ability to act as 'catalysts' of economic development. During the 'take-off stages' of these economies, large and powerful banks initially relied on capital contributions from a small number of founders and thereafter as their industrial lending portfolio grew, they took recourse to deposits as a major source of funds. With the development of markets, borrowings also became an important source of funds for the banks.

4.3 Historically, financial intermediation by banks has played a central role in India in supporting the growth process by mobilising savings, particularly after the nationalisation of the 14 major private banks in the late 1960s. Banks have been particularly instrumental in mobilising deposits from the household sector, the major surplus sector of the economy, which, in turn, has helped raise the financial savings of the household sector and hence the overall saving rate. Notwithstanding the liberalisation of the financial sector and increased competition from various other saving instruments, banks continue to play a dominant role in the financial intermediation of the Indian economy. The deregulation of interest rates has opened up new avenues for banks to mobilise funds at competitive rates. Moreover, banks, by virtue of being the ultimate platform for clearing and settlement for all financial transactions, provide accounts and resources to other sectors as also other financial intermediaries.

4.4 The Indian economy has witnessed robust growth performance in recent years and banks have played a major role in providing the required amount of resources. In order to sustain the growth process, banks would have to continue to provide funding on a large scale. In India, there exists an enormous potential of savings in rural and semi-urban areas. Also, in India quite a large part of domestic savings is locked up in unproductive physical assets. The mobilisation of savings from hitherto untapped areas and conversion of physical savings into financial savings would necessitate introduction of appropriate products to suit the demand of savers. Banks are indeed in an ideal position to do so because of certain inherent characteristics of deposits such as safety and liquidity.

4.5 Apart from mobilisation of deposits, banks, for meeting their resource needs, also depend on non-deposit resources both at home and abroad. A part of non-deposit resources comes from borrowings, which help augment the funding needs of the banks instantly. However, they also pose a challenge in terms of their availability and management of borrowing costs, amidst potential interest rate and exchange rate risks. Thus, an effective use of borrowings requires a system of appropriate risk management by banks.

4.6 Against this backdrop, this chapter analyses various aspects of resource mobilisation and identifies the scope and challenges faced by banks in the process of financial intermediation and supporting economic growth in India. The chapter is organised into six sections. Section II provides the theoretical underpinnings on the intermediation role of banks. Section III, after analysing the role played by financial intermediaries in mobilising resources based on the flow of funds of the Indian economy, examines in detail the various aspects of the deposit mobilisation process by banks in India. The significance of deposits in the liability structure of banks is also discussed in this section. Section IV covers the cross-country experiences regarding the role played by the banking sector in financially liberalised and globalised environment with a view to drawing appropriate lessons. Section V identifies the emerging issues and challenges faced by banks in India and makes suggestions, as the way forward, to meet effectively the challenge of resource mobilisation. Section VI concludes the chapter.

II. THEORETICAL UNDERPINNINGS

4.7 According to the traditional literature, the domestic financial system evolves through three different stages, viz., (a) the bank-oriented phase, (b) market-oriented phase and (c) strongly market-oriented phase. In the bank-oriented phase, the bulk of an economy's savings is intermediated through banks in the form of deposits and transferred to the borrowers. Banks, thus, play a key role as financial intermediaries in reallocating the resources from surplus economic units (savers) to deficit economic units (borrowers). They perform this special role as they are perceived as intermediaries effective in ameliorating information asymmetries and inter-temporal transaction costs that form the central source of imperfections in a financial system. Risk capital is obtained from retained profits and direct recourse to promoters, who are fewer in number. In the market-oriented phase, firms increasingly rely on external funds, including risk capital raised from ultimate savers through capital markets rather than through financial intermediaries. In the strongly market-oriented phase, banks also rely increasingly on the funds raised through financial and capital markets and there come into existence new financial-risk-hedging markets (Rybczybski, 1985).

4.8 Advances in the recent literature show that the traditional debate, i.e., whether bank-based or market-based financial structure was supportive of economic growth, may be misplaced in the current context (Levine, 2000). The bank-based view of growth, as propounded by development economists, notes that corporate financing for investment in the development phase is predominantly raised as debt from banks rather than from equity. This view is pessimistic about the role of markets as compared to banks in fostering growth. In turn, traditional corporate finance views banks, bond and equity financing as substitutes. Banks reduce costs of acquiring and processing information on behalf of investors and thereby avoid duplication and free rider problems. Banks also enable both cross-sectional as well as inter-temporal risk sharing. They also facilitate mobilisation of financial savings by economising on the transactions costs associated with mobilising savings from disparate agents and by overcoming the information asymmetries with making savers comfortable in offering their savings. By effectively mobilising savings, financial intermediaries not only ease capital accumulation but also improve resource allocation by allowing the benefits of economies of scale. According to this view, bank-based financial systems – especially in countries at early stages of economic development – are better at promoting economic growth. On the other hand, the market-based view stresses the impor tance of well-functioning securities markets in providing incentives for investors to acquire information, impose corporate control and custom design financial arrangements.

4.9 A third view emerging since the 1990s is that banks and markets may provide complementary or similar financial services. The financial services view, thus, places analytical importance on how both banks and markets build a sound system for effective provision of financial services so as to promote economic growth. Financial systems assess potential investment opportunities, exert corporate control after funding projects, facilitate risk management, including liquidity risk, and ease savings mobilisation. Another view, i.e., legal-based view, which emerged in the 1990s, extends the financial services view and unconditionally rejects the bank-based versus market-based debate and argues that finance is a set of contracts, which can be made more or less effective by legal rights and enforcement mechanisms. Accordingly, the overall level and quality of financial services – as determined by the legal system –improves the efficient allocation of resources and economic growth. Hence, it emphasises that focus should be on creating a sound legal environment, rather than debating on the merits of bank-based or market-based systems. Cross-country data also show that countries with greater degrees of financial development – as measured by aggregate measures of bank development and market development – are strongly linked with long run growth. Furthermore, the component of financial development explained by legal rights of outside investors and the efficiency of legal system is strongly and positively linked with long-run growth. The legal system plays an important role in financial sector development and in turn influences long-run growth. Thus, improving functioning of markets and banks is critical for boosting long-run economic growth. Policymakers, therefore, need to focus on strengthening the legal rights of outside investors and the overall efficiency of contract enforcement. Policy tools should not tip the level playing field in favour of banks or markets and instead focus on strengthening the fundamentals in the form of property rights and enforcement of these rights.

4.10 A key variable influencing availability of funds for banks is the central bank policy that alters the total volume of reserves in the banking system. Studies in the traditional literature have shown that, under conditions of precommitment of households to a deposit position and prevalence of Keynesian-type 'sticky prices', a central bank can alter the volume of reserves in the banking system through unanticipated injection of non-borrowed reserves, thereby creating 'liquidity effects'. These models assume that households do not quickly adjust their liquid asset holdings, in particular their bank deposit position, in response to an unanticipated change in monetary policy. Subsequent models relaxed restrictions of this set up by introducing alternative instruments like bonds, whereby direct financing of firms/borrowers by households was allowed. This imparted the countercyclical character of working capital loans being financed through bank lending. These models were further developed by recognising that bonds and bank deposits are imperfect substitutes as not all firms have a quality rating to permit them to issue bonds and so they must have to take recourse to bank lending. However, continued restrictions in the form of deposits market clearing as well as deposit rate being determined prior to money shock produced persistence of liquidity effects. In the absence of the bond market, households are forced to absorb the monetary shock with liquid asset holdings in the form of bank deposits, thus, keeping the demand for real money balances relatively high and bringing about a slow price adjustment. The availability of the bond market provides households with a savings asset that helps to insulate their income from inflation. In response to a monetary shock, therefore, the demand for bonds increases, thereby mitigating the demand for real money balances and inducing an overshooting of prices relative to their long-run equilibrium path. Consequently, the sharper initial price adjustments result in lower expected inflation premia in nominal interest rates that dissipate slowly. Thus, information frictions in the form of precommitment by households to a deposit position as well as presetting of deposit rates by banks prior to monetary (reserves shock) commitment generate liquidity effects. However, when both the assumptions are operative, models yield excessive volatility in consumption and investment. However, when the precommitment of deposits by households is minimal, such that the principal restriction is a pre-set deposit rate, the liquidity effect is still present, bank intermediation remains countercyclical, and the behaviour of consumption and investment is cyclical in nature in tandem with the actual experience. This brings out three features of interest rate policy followed by banks. First, bank deposit rates on transaction accounts move quite sluggishly as they represent average rather than marginal rates. Second, interest rates paid on managed liabilities become more responsive to market rates. Managed liabilities, however, represent only a fraction of deposit funds. Third, interest rates on bank loans to firms are normally tied to lines of credit. All of these issues may significantly affect the cyclical properties of bank lending, and hence its role in transmitting monetary policy decisions to the real economy. Accordingly, interest rate policies, in particular, deposit rate policies followed by banks are receiving progressively greater attention in recent years (Einarsson and Marquis, 2003).

4.11 Traditionally, local market conditions play an important role in deposit pricing policy of banks. In this context, it was found that typically banks in more concentrated markets offer lower interest rates on deposits and higher rates on loans (Berger and Hannan, 1989). According to the traditional literature, bank deposit rates would not be affected from a rapid increase in average bank size, provided the local market concentration remains essentially unchanged. However, the experience of the recent banking consolidation shows that increase in the average size of banks, which have not impacted local market concentration, have changed local market conditions and influenced determination of deposit rates. Increase in bank size might affect deposit rates if regional or large nationwide organisations compete in different ways than small, local institutions, even when the different organisations have similar local market shares. Furthermore, although banking markets are generally local in nature, evidence from the development in recent years shows that multi-market banks compete differently than the banks that operate primarily in the local market. During the period of 1988 to 2004 in the US, as a result of the consolidation process, the effect of size structure on deposit rates followed typically an inverse-V shaped pattern. Up to the year 2000, bank mergers that moved deposits to mega banks pushed down the deposit rates as mega banks tended to be less aggressive competitors than small banks. This was partially, but not completely, offset by the fact that multi-market banks tended to be more aggressive competitors. During the subsequent period, the trend reversed, which reflected that mega banks became more aggressive competitors which led to an increase in deposit rates. These underlying trends bring to the fore several features of deposit pricing. First, as banks grow larger, they have access to more non-deposit liabilities. Typically, this reduces the desire for them to compete intensively for deposits. Second, as banks grow in size and operate in multiple markets, they become less sensitive to local market conditions. Third, since banks compete more intensively against other of similar size, the growing presence of multimarket mega-banks instills more aggressive competition among them leading to higher deposit rates (Rosen, R. J., 2007).

4.12 Finally, since household savings form a potential pool of resources for intermediation by banks, the evolving dynamics in determinants of household savings have a critical bearing on banks in their management of resource mobilisation. While the banks' accessibility of resources is expected to grow in tandem with the increasing level of household savings, the actual recourse of the same would depend upon the households' decisions on their portfolio composition of savings. The level and composition of household savings, in turn, are influenced by macroeconomic conditions, financial market development and regulation, alternative income sources, demographics and preferences of the household sector (Exhibit 1). Cross-country evidence on asset composition of household balance sheets reveals that non-financial assets constitute a major share in total assets in countries where developments in housing sectors have opened up new investment opportunities. On the other hand, the composition shifts in favour of financial assets in countries with well developed financial markets, partly facilitated by relatively cheap housing and extensive reliance on private pension plans. Within financial assets, the preference for liquid assets held mostly in the form of bank deposits is observed to be high in countries with a long history of public confidence in banking, which is also influenced, to an extent, by lack of confidence in the real estate and capital markets (Davies, et. al., 2007).

III. DEPOSIT MOBILISATION BY BANKS IN INDIA

4.13 Since the first episode of bank nationalisation in 1969, financial intermediaries, especially banks have been at the core of the financial intermediation process in India. They have mobilised a sizeable share of savings of the household sector and channelling them to the deficit sectors, viz., the private corporate and public, thereby supporting the growth process. The analysis of bank deposits in this section is attempted using the flow of funds data and the regular data on deposits of scheduled commercial banks (SCBs). The flow of funds data, though available with a considerable time lag (i.e., latest data available are for the period 2000-01), could provide useful insights into the relative position of the banking sector vis-à-vis the other sectors.

Flow of Funds

4.14 The channeling of resources from the surplus units to the deficit units was reflected in the flow of funds (FOF) accounts of the Indian economy across the six sectors, viz., households, corporates, government, banks, other financial institutions (OFIs) and the rest of the world sector. Households, the consistent surplus sector, met to a large extent the deficits of the public and private corporate sectors, and to a limited extent of the rest of the world sector. Funds were provided to meet the requirements of the deficit sectors either directly (primary issues) or through the financial intermediaries such as banks and OFIs (secondary issues). A notable feature from the sectoral distribution of claims was a general rise in the share of secondary issues from 39.7 per cent in 1970-71 to 47.1 per cent in 1999-00 with a corresponding decline in the share of primary issues. This reflected an important role played by financial intermediaries in the flow of funds process in the Indian economy (Table 4.1). In this context, it may be noted that flow of funds data for the Indian economy, which require availability of comprehensive information on financial transactions across all the sectors and instruments of the economy, are released with a considerable lag. This section utilises the latest available data for 2000-01, which was published in the RBI Bulletin released in September 2007.

4.15 The relative significance of financial claims by the various sectors show year to year variations. The financial intermediation process has been dominated by the banking system. The share of claims by all financial institutions in total claims moved in the range of 36.3 per cent and 47.1 per cent; it averaged 42.2 per cent during the period 1994-95 to 2000-01. Financial flows through the banking sector increased from Rs.1,16,217 crore in 1994-95 to Rs.1,88,495 crore in 2000-01 with the share of financial flows through the banks in the flows through the financial intermediary sector, on the whole, increasing from around 62 per cent in 1994-95 to around 64 per cent in 2000-01. The share of the banking sector in total claims declined from 28.3 per cent to 24.2 per cent, while that of the OFIs declined from 17.2 per cent to 13.6 per cent during this period (Table 4.2). The share of non-financial institutions, led by the Government and to an extent by the private corporate sector, increased over this period.

4.16 The various sources of funds for the banks, as reflected in the flow of funds accounts of the Indian economy, showed large fluctuations. A notable feature, however, was that the deposits continued to constitute the largest source of funds for the banks. The share of deposits in total sources for the commercial banks increased steadily from 85 per cent in 1994-95 to around 97 per cent in 2000-01. The shares of paid-up capital and borrowings declined sharply between 1994-95 and 2000-01 (Table 4.3). While deposits were mobilised primarily from households, the share of the corporate sector in bank deposits increased. The share of households in total commercial bank deposits remained around 70 per cent over the period 1994-95 to 2000-01, while that of the private corporate sector increased from 0.6 per cent to 3.8 per cent. The share of rest of world rose from 8.3 per cent to 11.3 per cent. On the other hand, the share of financial institutions in commercial bank deposits declined from 6.9 per cent to 2.7 per cent during the same period. Bank deposits from the government sector include deposits held by the local authorities and public sector commercial undertakings apart from the Central and State Governments. A notable feature was the increase in the holdings of deposits by the local authorities with banks. Borrowings, as a source of funds for the commercial banks, were driven by the borrowings from the Reserve Bank, other financial institutions and from the rest of the world sector. The rationalisation of the refinance facilities from the Reserve Bank, whereby refinance facilities other than export credit refinance facility was withdrawn, led to lower recourse of borrowings by banks from the Reserve Bank. Financial institutions constituted the main source of funds in the form of borrowings for banks, followed by the rest of the world sector in 2000-01.


Bank Deposits

4.17 The banking sector has played an increasingly important role in the financial intermediation process by mobilising savings in the form of deposits. Yearly aggregate deposit growth of scheduled commercial banks, which remained highly volatile during the period 1951-52 to 1960-61, stabilised thereafter (Chart IV.1).

4.18 A major turning point in the post-independence history of the banking sector was nationalisation of 14 major private sector commercial banks in July 1969. Bank deposit growth of SCBs in the post-nationalisation period could be broadly divided into four phases, viz., Phase I (1969-1984); Phase II (1984-1995); Phase III (1995-2005); and Phase IV (2005-2008) (Table 4.4).

4.19 In the first phase, the aggregate deposit growth of SCBs increased sharply averaging 19.2 per cent during 1969-1984 as compared with 9.5 per cent during the pre-nationalisation phase (1951-1969). Net financial savings (net of financial liabilities) of the household sector increased sharply by 49.2 per cent in a single year in 1970-71, i.e., immediately after banks were nationalised. Consequently, physical savings of households declined by 8.9 per cent in 1970-71. Large branch expansion by commercial banks, especially in rural and semi-urban areas following nationalisation of 14 major private sector banks in 1969 also had a significant positive impact on deposit growth of banks. The second round of nationalisation of six private sector banks in 1980 led to further expansion of branch network and helped spur the growth of deposits. The number of bank offices in rural and semi-urban areas increased from 1,443 and 3,337, respectively, in 1969 to 30,185 and 9,816, respectively, in 1985. Consequent to the large branch expansion, outreach of the banking system expanded as reflected in the population per office, which declined from 65,000 in 1969 to around 14,000 in 1985 and has remained broadly stable thereafter (Table 4.5).




4.20 As a result, the share of rural deposits in total deposits increased from 3.1 per cent in 1969 to 14.4 per cent by 1984, which was primarily responsible for raising the overall deposit growth during the period 1969-1984. Similarly, the shares of semi-urban and urban deposits also increased somewhat up to the mid-1980s. On the other hand, the share of metropolitan deposits in total deposits declined sharply from 49 per cent to around 39 per cent over the same period (Chart IV.2).

4.21 Increased access to banking facilities helped improve the banking penetration. At the all-India level, the number of savings and current deposit accounts with SCBs per hundred persons increased from 5.8 in 1973 to 15.3 in 1981 and further to 31.8 in 1991. It declined to 28.9 in 2001 before increasing again to 34.9 in 2007. In rural areas, the number of savings and current deposit accounts with SCBs per hundred persons increased from 3.3 in 1973 to 11.4 in 1981 and further to 25.5 in 1991. It declined to 23.8 in 2001 before increasing again to 27.8 in 2007 in line with the emphasis on financial inclusion by the Government and the Reserve Bank. The share of deposits in rural areas in banks' total savings and current deposit accounts, which had increased up to 1991, however, declined in recent years (Table 4.6). In this context, it may be noted that apart from the SCBs, deposit facilities are also provided by primary agricultural credit societies (PACS), urban co-operative banks (UCBs) and post offices and, therefore, they also need to be taken into account in assessing the penetration of financial services in India (see Chapter VII for details).

4.22 The process of banking habit was also facilitated by the establishment of the Deposit Insurance Corporation in 1962 (against the backdrop of failure of banks), which offered protection to bank depositors, particularly small account holders. This restored faith of savers in the banking system as reflected in the ratio of aggregate bank deposits to GDP, which increased from an average of 9-10 per cent during the 1950s and the 1960s to an average of 18 per cent during the 1970s (Chart IV.3).

4.23 The share of bank deposits in gross financial savings of the household sector also increased from 35.7 per cent in 1970-71 to 42.5 per cent in 1983-84 reflecting the impact of bank branch expansion (Table 4.7). The share of bank deposits declined to 38.4 per cent by 1994-95 mainly due to disintermediation in the financial system on account of households' preference for capital market instruments. The Government's policy thrust on small saving schemes led to a further decline in the share of bank deposits to 36.4 per cent by 2004-05. However, there was a reversal in this trend with the share of bank deposits increasing to 55.6 per cent in 2006-07, reflecting aggressive deposit mobilisation by banks, partly facilitated by the extension of tax benefits to special deposit schemes as detailed in the subsequent sections. The higher interest rates on time deposits and unchanged interest rates on small savings contributed to some shift of funds from small savings to bank deposits.

4.24 A major structural break occurred in components of bank deposits in 1977-78 due to definitional changes in the treatment of savings deposits. In 1977-78, the share of demand deposits declined sharply, primarily reflecting the switch towards time deposits on account of the change in the treatment of apportionment of savings deposits into two components – demand and time – in March 1978. In terms of the revised definition, SCBs were required to treat the average of the monthly minimum balances in savings accounts eligible for interest payments as 'time' liability, while the remaining portion was to be treated as the 'demand' liability of the savings account. Furthermore, banks were instructed to calculate the proportions between 'demand' and 'time' liabilities twice a year as at end-June and end-December. Also, following the recommendations of the Chore Committee in 1978, banks' reliance on the cash credit reduced significantly as the corporates were required to contribute not less than 25 per cent of their current assets from their own funds and long-term resources. To the extent, corporates reduced their reliance on bank credit, it resulted in the decline in current deposits (Chart IV.4).

4.25 A compositional analysis of bank deposits also reveals that the share of term deposits, which was 55.7 per cent at end-March 1980, declined to around 51 per cent in 1981-82 reflecting a switch towards the new 12 per cent 6-year National Savings Certificates (NSC), which was introduced during the year. There was also a sharp increase in the issue of shares and debentures, particularly convertible debentures, by the corporate sector.

4.26 In the second phase (1984-1995), the aggregate deposit growth decelerated marginally to 18.4 per cent. The growth of demand deposits accelerated during this phase, while that of time deposits decelerated resulting in the overall slowdown in aggregate deposit expansion. The deceleration in time deposits growth was the result of (a) slowdown in expansion of branch network, and (b) substitution of time deposits held in banks with other saving instruments. The number of offices of SCBs, which showed nearly a four-fold increase between 1969 and 1980, expanded by less than two-fold between 1980 and 1995. Second, bank deposits were substituted in favour of other instruments. Units of mutual funds, shares and debentures, deposits of non-banking financial companies (NBFCs) and small savings grew rapidly, which was reflected in increase in their shares in household financial savings (refer Table 4.7).

4.27 The substitution of funds, particularly, in favour of units of mutual funds during the latter part of the 1980s and the early 1990s, to some extent, was facilitated by the availability of tax benefits under Section 80M of the Income Tax Act. Under this section, the dividend received by the companies was exempted from the income tax so long as the dividend paid by them was more than the dividend received. As a result, corporates invested large funds in the then Unit Scheme-64 (US-64) of the erstwhile Unit Trust of India (UTI). Apart from corporates, individual investors were also attracted to units of mutual funds. In addition to UTI, as many as 21 new mutual funds were set up between 1987-88 and 1995-96, which launched about 128 schemes. In the face of increased competition from newly established mutual funds, UTI also followed an aggressive policy of launching new schemes, especially during the latter half of the 1980s to meet investor's diverse income and liquidity needs. Out of 41 schemes introduced between 1964 and 1992, as many as 26 schemes by UTI were introduced between 1987 and 1992. Between 1987-88 and 1991-92, financial assets of mutual funds grew at an average annual rate of 153 per cent (Raj, 1999). Although a part of increase in financial assets might have emanated from appreciation of investments, a major part of such assets was funded from fresh mobilisation of funds. Capital market conditions in this phase were also buoyant (as against depressed conditions in the 1970s). As a result, units of mutual funds and direct investments in shares provided higher returns than interest rates on bank deposits. This encouraged switching of household financial savings from bank deposits to shares and debentures and units of mutual funds. Deposits mobilised by NBFCs during this phase also grew rapidly. The number of NBFCs, which had increased two fold between 1970 and 1980, rose by nearly eight times between 1980 and 1994. An idea of large deposit mobilisation by NBFCs can be had from their financial assets, which grew at an average annual rate of 44.6 per cent during 1990-94. Small savings also increased significantly as reflected in increase in the share of claims on Government in financial savings of the household sector. During this phase, the share of bank deposits in financial savings of the household sector declined sharply (refer Table 4.7). An empirical study conducted for India also found that time/term deposits of scheduled commercial banks were substituted in favour of units of mutual funds, non-convertible debentures (NCDs), life insurance policies of LIC and small savings (Raj, op cit)1.

4.28 Bank deposit growth continued to decelerate further in the third phase (1995-2005) with the average aggregate deposit registering a growth of 15.7 per cent, although income levels increased fur ther reflecting the impact of improvement in real GDP growth. However, in this phase, deceleration to a large extent was caused by deceleration in demand deposits and to some extent time deposits. The sharp deceleration in demand deposits growth was due to the successive reduction in the stipulated minimum maturities of domestic term deposits. The minimum maturities of time deposits were gradually shortened from 46 days to 30 days in July 1996, from 30 days to 15 days in April 1998, and further from 15 days to seven days for wholesale term deposits of Rs.15 lakh and above in April 2001 and for retail term deposits under Rs.15 lakh in October 2004. This led to switch of funds from saving deposits (demand liability portion) to term deposits. In order to provide banks the flexibility in their operations and improve efficiency, not only the minimum maturity period of term deposits was brought down but also banks were gradually accorded freedom in fixing the interest rates on their domestic term deposits for specific maturities (Box IV.1).

Box IV.1 Deregulation of Deposit Interest Rates in India

The process of deregulation of domestic deposit rates began when banks were allowed to set interest rates for maturities between 15 days and up to 1 year subject to a ceiling of 8 per cent effective April 1985. However, this freedom was withdrawn by end-May 1985 in the face of an ensuing price war. The process of deregulation was resumed in April 1992 by replacing the existing maturity-wise prescriptions by a single ceiling rate of 13 per cent for all deposits above 46 days. The ceiling rate was brought down to 10 per cent in November 1994, but was raised to 12 per cent in April 1995. Banks were allowed to fix the interest rates on deposits with maturity of over 2 years in October 1995 which was further relaxed to maturity of over one year in July 1996. The ceiling rate for deposits of '30 days up to 1 year' was linked to the Bank Rate less 200 basis points in April 1997. In October 1997, the deposit rates were fully deregulated by removing the linkage to the Bank Rate. Consequently, the Reserve Bank gave the freedom to commercial banks to fix their own interest rates on domestic term deposits of various maturities with the prior approval of their respective Boards of Directors/Asset Liability Management Committee (ALCO). Banks were permitted to determine their own penal interest rates for premature withdrawal of domestic term deposits and the restrictions on banks that they must offer the same rate on deposits of the same maturity irrespective of the size of deposits was removed in respect of deposits of Rs.15 lakh and above in April 1998 with the bank board's laying down policy in this regard. Banks were encouraged to put a flexible interest rate system on deposits (with a fixed rate option) in practice as early as possible in April 2002. Now banks have complete freedom in fixing their domestic deposit rates, except interest rate on savings deposits, which continues to be regulated and is currently stipulated at 3.5 per cent.

In line with the regulation of domestic deposit rates, interest rates on various NRI deposit schemes were also regulated by the Reserve Bank. Prior to August 1985, interest rate on the prevalent NRI deposit schemes was stipulated two percentage points higher than the prescribed domestic term deposit rates. Subsequently, interest rates on FCNR(A) were revised taking into account trends in international interest rates. The differential, however, widened in the early 1990s, reflecting the need to attract these deposits in view of the external payments crisis of 1991. As part of the financial sector reforms, the detailed maturity-wise prescriptions were rationalised for NRE deposits and subjected to a single prescription of 'not more than 13 per cent' in October 1992 and 'not more than 12 per cent' in April 1993 in line with the flexibility provided for domestic deposits. With a view to aligning the maturity structure of NRE and domestic deposits, interest rates on NRE term deposits of maturity over 2 years were freed in April 1996, while those for maturity over 1 year were freed in April 1997. Effective September 13, 1997, banks were given complete freedom to decide interest rates across all maturities. Similarly, with regard to FCNR(B) scheme, banks were allowed to determine the interest rates (fixed or floating with an interest reset period of 6 months) subject to a prescribed ceiling effective from April 16, 1997. Earlier, the interest rates on FCNR(B) deposits were the same as those prescribed for FCNR(A) deposits. The minimum maturity period was also raised from six months to 1 year, effective October 1999 and from July 26, 2005 banks were allowed to accept FCNR(B) deposits up to a maximum maturity period of five years, against the earlier maximum limit of three years. In the case of NR(NR)RD scheme, banks were allowed the flexibility to fix the interest rates from the inception of the scheme in June 1992, i.e., even before freeing the domestic deposit rates.

In response to changing conditions in the financial markets, however, interest rates on NRE term deposits were linked to the international rates by way of a ceiling of 250 basis points over and above the US Dollar LIBOR/SWAP rates of corresponding maturities, effective July 17, 2003. The ceiling rates were progressively reduced (to 100 basis points above LIBOR rates on September 15, 2003 and further to 25 basis points above LIBOR rates on October 18, 2003) and brought down to LIBOR/SWAP rates for corresponding maturities with effect from close of business as on April 17, 2004. Subsequently, the ceiling rate was raised again in stages to 100 basis points above LIBOR by April 18, 2006 before fixing at LIBOR with effect from April 24, 2007. Alongside, the NRE savings deposits rate was delinked from the domestic savings deposits rate and the ceiling rate on NRE savings deposits was fixed at 6-month US Dollar LIBOR/SWAP rate effective April 17, 2004. However, with effect from the close of business in India on November 17, 2005, the interest rates on NRE saving deposits are the same as applicable to domestic savings deposits.

4.29 In this phase, however, bank deposits faced competition mainly from post office deposits and small savings, the collection under which increased by more than four times (Table 4.8).

4.30 With the deregulation of various deposit rates as part of the financial sector reforms, interest rates on term deposits of all maturity spectrums declined from 12-13 per cent to 4.00-5.50 per cent between 1995-96 and 2003-04. During this period, interest on other saving instruments also declined. However, the decline in interest rate on other instruments was significantly lower than that on term deposits (Table 4.9).

4.31 Reflecting the softening of interest rates and shortening of maturity profile of term deposits, a distinct shift was noticed in the interest rates at which banks contracted term deposits. The share of deposits contracted at the interest rate of 10 per cent and above in total deposits of SCBs declined consistently from 77.3 per cent in 1998 to 9.0 per cent in 2004. On the other hand, the share of deposits contracted at less than 6 per cent in total deposits of banks increased from 4.1 per cent in 1997 to 46.3 per cent in 2004. Deposits contracted at up to 8 per cent interest rate constituted as much as 74 per cent of total deposits in 2004 as compared with 11.2 per cent in 1997 (Table 4.10).



4.32 With small savings rate generally being higher than the time deposit rates of similar maturities and the Government providing tax benefits for small savings, the effective rate of returns on such savings was often higher than the return on time deposits. As against annual rate of return of 5.25-5.50 per cent on term deposits with maturity of over five years in 2003-04, investors in marginal tax bracket of 30 per cent earned 14.6 per cent on NSC, 12.5 per cent on PPF and 8.32-10.03 per cent in post office deposits (Table 4.11).

4.33 Accordingly, the growth in small savings collection was significantly higher than that in bank deposits. Collections of small savings more than doubled during 2000-01 to 2004-05 (Chart IV.5). Despite deceleration, the share of overall bank deposits in the gross financial savings of the household sector remained broadly unchanged. Besides increase in the share of claims on Government, the share of life insurance fund during this phase also increased sharply. However, the combined increase in the shares of claims on Government and life insurance funds was broadly matched by the decline in the share of capital market instruments (refer Table 4.7).

4.34 As a result of increased competition from post offices, which was mainly from rural and semi-urban areas, the shares of rural, semi-urban and urban deposits in total deposits declined from their peaks in the 1980s and the early 1990s. Concomitantly, the share of metropolitan deposits in total deposits of banks increased from the early 1990s, partly reflecting the growing significance of new private sector banks, which are operating largely in urban and metropolitan areas. A disaggregated analysis of deposit types reveals that the share of the rural sector in total bank deposits, which had increased from 12.6 per cent in 1980 to 15.3 per cent by end-March 1990, declined to 12.9 per cent by end-March 2004, reflecting largely the decline in the share of term deposits. Similar trends were observed in respect of shares of deposits in semi-urban and urban areas. On the other hand, the share of metropolitan areas in total bank deposits persistently moved up in the current decade due mainly to increase in the share of term deposits. Another noteworthy feature was the decline in the share of current deposits in total deposits in respect of both urban and metropolitan areas (Table 4.12). This, to an extent, could be explained by the decline in the share of industry in total credit as detailed in Chapter VI. Since industry avails a part of credit by way of cash credit, reduced dependence on bank credit leads to reduction in cash credit limit and balances in current account. This perhaps also represented better cash management by the industry. On the other hand, the share of saving deposits in total deposits remained broadly unchanged in all population groups.


4.35 In terms of ownership pattern, the share of the household sector in banks' total deposits declined from 69.2 per cent in 1995 to 58.4 per cent in 2004 (Table 4.13). The share of the Government sector in total deposits of SCBs increased from 9.2 per cent in 1995 to 14.5 per cent by end-March 2004. This could be attributed mainly to improved public sector savings rate which, in turn, was due to improved performance of the non-departmental government enterprises. The average saving rate of the non-departmental enterprises of the public sector increased from 3.0 per cent of GDP during 1991-92 to 1996-97 to 4.1 per cent during 2003-04 to 2006-07 (Mohan, 2008). The corporate sector's (both financial and non-financial) share in total deposits also rose in recent years, reflecting their improved performance. Increased resource mobilisation by other financial intermediaries also led to increased parking of funds with the banking sector.

4.36 Disaggregated analysis of ownership pattern according to types of deposits of SCBs indicates that the decline in the share of the household sector occurred mainly because of decline in their share in term deposits. On the other hand, the increase in the deposits of the Government and the corporate sectors was mainly on account of increase in their share in deposits held by the household sector; its share ranged between 84-88 per cent between 1995 and 2004.




4.37 On the whole, the share of term deposits increased from 59.2 per cent at end-March 1995 to 63.1 per cent at end-March 2000 and further to a peak of 64.4 per cent at end-March 2002. The share of savings deposits declined from 24.2 per cent at end-March 1995 to 23.7 per cent at end-March 2000. Subsequently, the share of saving deposits increased to around 26.1 per cent by end-March 2007, while that of term deposits declined to 61.5 per cent (Chart IV.6).

4.38 However, within term deposits, the maturity profile of term deposits shortened significantly beginning 1990. The share of deposits of longer (above 5-year) maturities declined significantly, while that of deposits of shorter (up to 1-year) maturities increased (Table 4.15). The share of term deposits with maturity of 1-3 years also declined significantly, while that of term-deposits with maturity of 3-5 years declined marginally. This pattern was discernible broadly both in respect of individual and non-individuals. The decline in interest rates on term deposits and the increase in tax-adjusted returns on other saving instruments were the two major factors that contributed to this trend.


4.39 In the fourth phase 2005-06 to 2007-08, deposit growth accelerated on account of acceleration in both demand and time deposits (refer Table 4.4). With a pick-up in growth momentum from 2003-04, credit demand from banks increased on a sustained basis, leading banks to devise strategies for aggressive deposit mobilisation. The sharp acceleration in demand deposits in this phase reflected, to some extent, the increase in the balances in current account in tandem with the increased offtake of bank credit as also parking of funds by mutual funds and corporates in view of buoyant capital market conditions. Insofar as time deposits are concerned, in order to provide level playing field, the Government in the Union Budget 2006-07 also extended the tax benefits under Section 80C for fixed deposits in scheduled banks with maturity of five years and above (Box IV.2). In view of sustained growth in credit offtake from banks at a higher level since 2004-05, banks also began to raise interest rates on term deposits of different maturity above the small savings rates to improve the attractiveness of various deposit schemes. However, interest rates on post office deposits remained unchanged (refer Table 4.9). Accordingly, the interest rate differentials narrowed down initially and subsequently turned in favour of bank deposits. As a result, there was a shift of funds from small savings to bank deposits (refer Chart IV.5).

4.40 Apart from tax benefits on long term deposits, the introduction of bank deposit schemes for senior citizens at higher interest rates also led to improved mobilisation of time deposits by banks. The lowering of the minimum maturity period of certificates of deposit (CDs) to 7 days in April 2005 also generated increased interest in CDs. CDs, introduced in June 1989, are essentially securitised short-term time deposits, which provide greater flexibility to investors for deploying their short-term surplus funds. They are issued by banks during periods of tight liquidity at relatively higher discount rates as compared with term deposit rates. Notwithstanding deregulation of interest rates on CDs in 1992 and reduction in minimum issue size to Rs.1 lakh and requirement of issuance only in dematerialised form in 2002, there was hardly any activity in this market segment up to 2004, except the years of credit pick-up during the mid-1990s. With sustained pick-up in bank credit growth at around 30 per cent from 2004-05, banks increasingly resorted to the issuance of CDs to supplement their deposit mobilisation in order to support the strong credit demand. The flexibility of return that can be offered by the cash-strapped banks to attract bulk deposits made CDs the preferred route for mobilising resources, especially by private and foreign banks with limited branch network and retail customer base. Accordingly, the outstanding amount of CDs issued by banks increased from Rs.12,078 crore at end-March 2005 to Rs.93,272 crore by end-March 2007 and further to Rs.1,47,792 crore as on March 28, 2008. Accordingly, the share of outstanding CDs in aggregate deposits of SCBs increased from less than 1 per cent in 2004-05 to 4.6 per cent during 2007-08. The average discount rate on CDs, which had hardened from 5.3 per cent at end-March 2005 to 11.1 per cent at end-March 2007 in line with the general hardening of interest rates, eased somewhat thereafter (Chart IV.7).

Box IV.2 Rationalisation of Small Savings Rates

As part of the process of deregulation of interest rates, the Government had rationalised interest rates on small savings in 1999-2000. In recent years, the Government attempted to further rationalise the tax treatment prevalent on the various financial savings instruments, which were not homogeneous. There is considerable variation in the taxation of contributions made to savings schemes, the tax levied on the accumulations in such schemes and the tax treatment at the final stage of withdrawal. This lack of uniformity tends to induce artificial distortions and bias amongst the various financial instruments. While many of the savings plans are exempted from tax at all the three stages 'exempt-exempt-exempt' (EEE), others are subject to tax on either the accumulations or payments received at the terminal stage. Recognising the best international practice relating to taxation of financial savings as the 'exempt-exempt-taxed' (EET) method, the Government of India also switched over to this system in a phased manner by April 1, 2006. As a first step, this required switching from the rebate method to income based deduction method. Therefore, as per the proposal of the Union Budget 2005-06, the then existing method of providing tax rebate under Section 88 for contributions/investments in specified savings schemes were replaced by an income based deduction for contributions by inserting a new Section 80C under Chapter-VI-A of the Income-tax Act. Accordingly, an individual or a Hindu Undivided Family was allowed a deduction from income of an amount not exceeding Rs.1 lakh with respect to sums paid or deposited in the previous year, out of income chargeable to tax, in cer tain specified schemes, which was successively raised to Rs.1,15,000 (inclusive of health insurance premium) in 2007-08 and further to Rs.1,30,000 in the Budget 2008-09. The additional amount of Rs.15,000 would be allowed for health insurance premium likely for dependant parents. The saving instruments eligible for tax benefit under the new schemes under Section 80C of the Income Tax Act are the same as those entitled for rebate from income-tax under Section 88, and included life insurance premia, contributions to provident fund or schemes for deferred annuities, purchase of infrastructure bonds, payment of tuition fees, repayment of principal amount of housing loans, etc. The coverage of Section 80C has been proposed to be enlarged in the Budget 2008-09 by including the Senior Citizens Savings Scheme 2004 and the Post Office Time Deposit Account as eligible saving instruments. The small savings rates as well as the marginal income tax rates have remained unchanged since March 2003, while the tax exemption limits under Section 80C have been revised upwards in successive Budgets. In respect of capital market instruments, although short-term capital gains attract higher tax rates, the exemption of long-term capital gains makes these instruments relatively more attractive compared to term deposits.

4.41 In this phase, the growth of non-resident (NRI) deposits decelerated significantly. As a result, the share of NRI deposits in aggregate deposits of SCBs, which constituted 15.5 per cent at end-March 1993,declined consistently (except in 1997) to 9.5 per cent at end-March 2004 and further to 6.4 per cent at end-March 2007 (Table 4.16). As a result, the share of foreign deposits in total deposits declined significantly (refer Table 4.13). The sharp decline witnessed beginning 2003-04 could be attributed to the rationalisation of various NRI deposit schemes and decline in the ceiling interest rates prescribed by the Reserve Bank for various deposit schemes as part of the strategy to manage capital flows as well as increased recourse to foreign currency borrowings by banks in view of lower interest rates abroad. The present ceilings in respect of FCNR(B) deposits of all maturities is LIBOR/SWAP rate minus 75 basis points and for NR(E)RA deposits is at the LIBOR/ SWAP rate effective from April 24, 2007. NRI deposit schemes were introduced in the 1970s and in the 1990s to support balance of payments (Box IV.3).


4.42 The deceleration in NRI deposits, however, did not have any significant impact on the overall deposit growth. The acceleration in deposits was also registered despite increased competition faced by banks from capital market instruments (shares/ debentures/units of mutual funds). It may be noted that while dividend income on capital market instruments is exempt from tax, investors also do not have to pay tax on long-term capital gains, while short-term capital gains are taxed at 10 per cent (raised to 15 per cent in the Budget for 2008-09). Funds mobilised by mutual funds and through new capital issues increased sharply, reflecting bullish sentiment in the capital market. However, with the Indian economy moving on to a higher growth path and sharp acceleration in the overall as well as sectoral saving rates, there was a general improvement in resource mobilisation by banks, non-banks and through equity market instruments (Table 4.17).

4.43 A significant shift was noticed in the various components of household sector financial savings. The share of bank deposits in household sector savings increased significantly from 36.9 per cent during 1995-96 to 2004-05 to 50.9 per cent during 2005-06 to 2006-07. The share of capital market instruments and life insurance fund also increased. On the other hand, the share of claims on Government declined (refer Table 4.7).

4.44 Bank deposits constitute the single largest source of domestic savings. Despite some fluctuations from time to time, bank deposits have maintained their predominant position in domestic savings and have played an important role in stepping up the share of financial savings of the household sector in gross domestic savings from an average of 1.9 per cent in the 1950s to 10.8 per cent during 2000-2007. The household sector has increasingly incurred financial liabilities, par ticularly through bank advances, to undertake its investments in physical assets in the form of construction, machinery and equipment, and change in stocks in recent years, which tended to dampen the net household financial savings. It is, however, significant to note that physical savings of the household sector have also moved in tandem with the increase in gross financial savings (Table 4.18 and Chart IV.8). Although a part of savings in physical assets is for genuine requirements, quite a significant part is locked up in unproductive assets.

Box IV.3 Non-Resident Deposits

India, like many other developing countries, has been mobilising a part of their external capital requirements through special deposit schemes designed for nonresidents by banks, in both foreign currency and local currency. Against the backdrop of the oil shocks in the 1970s and in order to tap the savings of Non-resident Indians (NRIs) employed in oil-rich countries, the Reserve Bank devised special deposit schemes for the first time in February 1970 with the introduction of Non-Resident External Rupee Account [NR(E)RA] which was followed by Foreign Currency Non-Resident (Account) [FCNR(A)] scheme in November 1975. The FCNR(A) scheme, where foreign exchange risk was borne initially by the Reserve Bank and subsequently by the Government, was withdrawn in August 1994 in view of its implications for the central bank's balance sheet and its quasi-fiscal costs to the Government. In order to provide depositors with an alternative to FCNR(A) under the market determined exchange rate regime, a new scheme known as Foreign Currency Non-Resident (Bank) [FCNR(B)] was introduced under which the foreign exchange risk was borne by banks on the basis of their risk perceptions. A new rupee denominated scheme, Non-Resident Non-Repatriable Rupee Deposit [NR(NR)RD], which was initially non-repatriable, was subsequently provided with features of repatriation of only interest income. The NR(NR)RD scheme was withdrawn in April 2002. Thus, currently only two NRI deposit schemes - the NR(E)RA scheme, also known as the NRE scheme and the FCNR(B) scheme -are in operation. While NRI deposits provided an important source of external finance, the acceptance of these deposits by banks had monetary implications. Therefore, the policy since the 1990s has been to retain the attractiveness of NRI deposit schemes, while at the same time reduce the effective cost of borrowing in terms of interest outgo and the cost to macroeconomic management. In line with these objectives, while interest rates on these deposits were gradually deregulated, the reserve requirements and, in recent period, interest rate ceilings have been fine-tuned in relation to capital flows cycles as part of the strategy of modulating these flows consistent with the overall macroeconomic management.

Apart from accessing external resources through NRI deposits schemes, banks have also resorted to mobilisation of funds from abroad through special deposit schemes in response to certain unfavourable external developments from time to time. Three such schemes have been launched since 1991 through banking channels with exchange rate guarantees. In the aftermath of the Balance of Payments (BoP) crisis, the State Bank of India (SBI) floated the 5-year India Development Bonds (IDBs) in October 1991 and raised US $ 1.6 billion. In view of an anticipated shortfall in capital flows, especially debt flows, the SBI floated a 5-year Resurgent India Bonds (RIBs) in August 1998 and raised US $ 4.2 billion. On the third occasion, the SBI floated a 5-year India Millennium Deposits (IMDs) scheme in December 2000 and raised US $ 5.5 billion as a pre-emptive step to check any possible depletion of India's foreign exchange reserve in the face of surge in world petroleum prices.





4.45 Although the bank deposits to GDP ratio (deflated by consumer price index) in India moved up gradually over the years, it was still lower than almost all advanced countries and several emerging market economies in Asia included in the sample (Table 4.19). This was despite the fact that some of the advanced countries are predominantly market-based systems. An analysis of 116 countries covering both developed and developing economies reveals that the bank deposits to GDP ratio, in general, tends to move up as income levels rise (Chart IV.9).

4.46 One of the major reasons for the low deposit-GDP ratio in India was the high share of physical savings in total savings even as India's savings rate compared favourably with several advanced and emerging market economies (Table 4.20).


Liability Structure of Banks: Deposits versus Borrowings

4.47 Deposit is the main source of funds for banks in most countries. However, in some countries, banks also depend heavily on borrowings, which raise questions about liquidity and solvency and overall stability of the banking system (Box IV.4).

4.48 Deposits constitute a major source of funds for banks in India. The share of deposits in total liabilities of banks remained broadly steady over the years. The share of capital and reserves in total liabilities, which was very small in 1990-91, increased significantly to 6.2 per cent by end-March 1995 in line with the emphasis on the capital adequacy requirements based on risk-weighted assets under the Basel I norms which were introduced from 1992-93. The capital to risk-weighted assets ratio (CRAR), which was 8 per cent to start with, was raised to 9 per cent from the year ended March 2000. Further, the Reserve Bank also continuously assessed risks weights on certain categories of advances as a prudential measure to protect the balance sheets of banks during phases of rapid credit expansion. This prompted banks to raise resources from the market and also plough back profits (see Chapter V). However, the share of capital and reserves in total liabilities has remained broadly unchanged from 1995. Banks supplemented their resources through borrowings from various financial institutions such as NABARD, EXIM Bank and erstwhile IDBI as well as from the Reserve Bank in the form of refinance and rediscounting facilities. The Reserve Bank's accommodation to commercial banks was in the form of food credit refinance, export credit refinance, standby refinance against pledge of Government securities during times of mismatch between sources and uses of fund and discretionary refinance to tide over temporary financial stringencies. During the 1990s, there were some rationalisation of the various refinance facilities along with reductions in the cash reserve ratio (CRR) from a peak of 15 per cent in 1991 to 9.5 per cent in November 1997, which was reflected in the decline in the share of borrowings in total liabilities between 1990-91 and 1997-98. Subsequently, the share of borrowings increased again, reflecting flexibility provided to banks to tap foreign currency borrowings, especially for granting pre-shipment credit in foreign currency (PCFC)/export bills rediscounting (EBR) to exporters. Banks were also allowed to use funds generated through buy-sell swaps in the domestic foreign exchange markets for granting such loans, subject to aggregate gap limit approved by the Reserve Bank. The share of overseas foreign currency borrowings in the aggregate deposits of banks gradually increased from around 0.1 per cent of total deposits at end-March 2001 to almost 2.3 per cent at end-March 2007 in line with the policy flexibility and the easing of interest rates abroad. Apart from overseas borrowings, banks also borrowed by way of call/term funding from financial institutions, whose share in total liabilities increased from almost zero per cent in 1998-99 to about 3.2 per cent in 2006-07. Some banks also raised funds by way of debt instruments from the capital market as past Tier II capital requirements and to support infrastructure financing. On the whole, however, the share of borrowings in total liabilities of banks has remained broadly the same since 1992. On the other hand, the share of other liabilities and provisions declined consistently mainly reflecting the decline in non-performing assets (NPAs) of banks as percentage of their gross advances (which declined from 15.7 per cent in 1996-97 to 2.5 per cent by 2006-07) and consequent decline in provisioning (Table 4.21).

Box IV.4 Deposits versus Borrowings: Some Issues

Traditionally, deposits constituted the primary source of funding for banks for undertaking financial intermediation, while their recourse to borrowings arose when the depositors switched their financial assets towards alternative instruments in line with the development of financial markets. As deposits are generally insured up to a threshold limit by the Government, they allow savers to retrieve their funds on demand without any capital loss, thereby ensuring full safety. On the other hand, the absence of both default risk and restrictions on access allows banks to mobilise deposits at lower rates relative to other financial institutions as the benefits of deposits insurance is available to banks almost without any payment of premium. Thus, insured deposits are not only a subsidised source of funds but also constitute the preferred 'core' funding for banks. As against insured deposits, recourse to borrowings is not only more costly but is also considered to be more sensitive to a bank's financial health and returns available on alternative financial instruments. As the providers of uninsured funds risk losing their money in the case of a bank failure, they are more likely to demand a higher return or pull out some of its money from the bank.

Notwithstanding the embedded features of liquidity and safety, savers tend to divert a part of surplus funds away from bank deposits towards investing in mutual funds, equity, debt instruments and contractual savings instruments such as insurance, and provident and pension funds. Apart from financial market development, many other factors such as changes in demographics and individual preferences also play a role in such shifts. While older people may rely on investment income and be risk averse rather than tie up their money for a long period of time, working (middle-age) population may seek higher returns when saving for retirement and have more flexibility to invest for the long-term. Even without changes in demographics, if households change their preferences and begin placing more importance to returns rather than safety of insured deposits, then also there could be a flight from bank deposits. Furthermore, greater access by households to alternative investment avenues enabled by developments in information processing, telecommunications technology and advances in financial engineering have lowered the transactions costs to households while channeling their funds into non-deposit assets.

These shifts have several implications for resource management by banks. First, the decline in cheaper insured deposits may raise costs for banks by making them rely on more expensive funding through borrowings. The shift to non-deposit funding would, therefore, require banks to engage in more active, complex and costly management of their funding base to ensure that they can meet their repayment commitments. Accordingly, banks may have to pay a higher rate on deposits to retain money which otherwise might switch to other investments having its implications for bank profitability and fund stability. Second, in certain circumstances, raising funds through non-deposit sources such as borrowing or bulk deposits may be cheaper at the margin than the insured deposits even if the rates paid on non-deposit funds are actually higher. This could be due to higher non-interest costs required to raise insured deposits such as the expense of branches, staff and technology. Furthermore, while raising rates to attract new deposits could also increase the cost of its existing deposit base, borrowings can be raised by banks without altering the cost for its existing deposits. Therefore, banks, in the face of growing preferences towards non-deposit instruments, may find it economical to reduce their branch structure or to carry out new techniques for raising money. However, with increasing reliance on non-deposit sources of funding, banks would have to develop the requisite expertise to design prompt and cost-effective repayment schedules, establish additional sources of emergency backup funds, and build up buffer of marketable and liquid securities.

In this new environment, thus, banks face the challenge of proper assessment of risks associated with borrowed liquidity vis-à-vis stored liquidity inherent in core deposits. Regulators also need to be proactive in dealing with the emergence of any systemic risks arising out of increased recourse to borrowings.


4.49 The cost of deposits, which reflects the average rate of contracting deposits of different types and different maturities over a period of time, declined between 2003-04 and 2005-06 before increasing marginally in 2006-07 in the wake of hardening of domestic interest rates. The cost of borrowing was lower than the cost of deposits. However, the gap between the two narrowed down significantly in 2006-07 (Table 4.22). In this context, it may be noted that while deposit rates are inherently sluggish and adjust with a lag to the liquidity conditions, interest rates on managed liabilities (i.e., borrowings) respond more swiftly to the evolving market cost of funds, as is evident from international experiences. An increase in the cost of funds was also accompanied by an increase in the return on funds in 2006-07. As a result, banks were more or less able to maintain their spread.

4.50 To sum up, banks in India have played an important role in financial intermediation by mobilising deposits from the public, and stepping up the savings rate. Growth of bank deposits has varied over different periods of time and has been accompanied by some distinct features in each phase. In the phase beginning immediately after nationalisation of banks, bank deposit growth accelerated sharply as rapid branch expansion that followed nationalisation enabled banks to tap savings from the rural areas. In the second phase (1984-1995), bank deposit growth decelerated as banks faced increased competition from alternative saving instruments, especially capital market instruments (shares/debentures/units of mutual funds) and non-banking financial companies. This was the phase of disintermediation as savings instead of being deployed in bank deposits were increasingly deployed in alternative saving instruments. Bank deposit growth decelerated further between 1995 and 2004. In this phase, banks faced competition from post office deposits, which carried significantly higher tax-adjusted returns than bank deposits. Despite this, however, bank deposits maintained their share in the savings of the household sector. During this phase, both ownership pattern and maturity pattern underwent a significant change. Bank deposits held by the Government and corporate sectors increased significantly. As a result, the share of deposits held by the household sector declined significantly even as the share of banks deposits in household sector financial savings remained broadly unchanged. The share of term deposits in total deposits increased. This was largely on account of increase in the share of the Government and the corporate sectors, as the share of the household sector in term deposits declined. However, within term deposits, there was a significant shortening of maturity profile in favour of short-term deposits.


4.51 In the fourth phase (2005-2008), bank deposit growth accelerated significantly as a result of vigorous resource mobilisation efforts by banks. This was facilitated by extension of benefits available on post office deposits to bank deposits. Growth of post office deposits and other small savings decelerated sharply. During this phase, the growth of NRI deposits decelerated sharply. However, banks were also able to mobilise large funds by way of certificates of deposit. During this phase, funds mobilised by mutual funds and by corporates through new capital issues increased significantly. As a result, the share of bank deposits and capital market instruments in the financial savings of the household sector increased sharply and that of claims on Government declined significantly.

4.52 The share of deposits and borrowings in the overall liabilities of banks has remained broadly unchanged in the post-reform period. The cost of borrowings between 2003-04 and 2006-07 was lower than the cost of deposit. However, the gap between them narrowed down significantly during 2006-07.

4.53 On the whole, the banking sector has played an important role in stepping up the savings rate of the household sector. However, physical savings have continued to grow in tandem with financial savings of the households and the challenge for the banking sector is to convert unproductive physical savings into financial savings. This issue is addressed in Section V in the light of cross country experiences set out in the following section.

IV. CROSS-COUNTRY EXPERIENCES

4.54 International experience shows that the role of financial intermediation has evolved over time, and varied across countries in tune with their state of financial development. A feature resulting from the evolutionary process of financial development has been progressive reduction in transaction costs and asymmetric information which have, to some extent, resulted in decline in the importance of traditional banking business of taking deposits and extending loans. Second, in tune with this, other financial intermediaries such as the pension funds and mutual funds have grown in importance in the recent period. Third, as financial development has introduced new financial markets such as financial futures, which are markets for intermediaries rather than individuals, the demand for new forms of financial intermediation has grown in relation to the traditional forms. Therefore, in recent years, modern theories of intermediation have developed that stress risk trading, risk management and participation costs as the key reasons for existence of modern intermediaries. In this modern set up, although the importance of non-bank intermediaries such as pension funds and mutual funds has increased significantly, banks have continued to play a significant role by diversifying their activities from traditional form of financial intermediation, whereby the sources of income originate more from fee-based activities to meet the demand for funds rather than through accepting deposits and extending loans. The key features of evolution of this financial intermediation process and the associated implications for the banking sector are borne out by the experience of development of financial systems in the US, the UK, France, Germany and Japan (Allen and Santomero, 2001).

4.55 In the United States, despite improved performance of banks, the consolidation process in the banking industry has resulted in the loss of its market share to other types of financial intermediaries. The decline in the banking sector's share in total intermediary assets has been noticeable since the mid-1970s, after a period of relative stability over 1940-1970. The share of commercial banks in total financial intermediary assets declined from 42 per cent in 1970 to below 25 per cent in 2005. With banks losing access to core deposits (as savers moved to non-bank financial institutions with the development of the financial system), they could not extend the benefits of relationship lending to borrowers prompting them to switch away from banks to not only the entities offering close substitutes to bank loans but also to those entities that issued securities (Mester, 2007). Accordingly, the shares of finance companies and asset-backed securities (ABS) issuers, and government-sponsored enterprises (GSEs), real estate investment trusts (REITs) and mortgage companies in total financial intermediary assets in the US increased sharply during the 1990s (Table 4.23). Despite their loss in the market share of intermediary assets, financial assets of the banking sector, as percentage of GDP, have not declined markedly (Scholtens van Wensveen, 1999). This suggests a change in the ownership pattern of the financial assets, whereby there has been a switch in asset holdings from those held directly to those held by non-bank intermediaries. Thus, the banking sector has experienced a reduction in its size in relation to other intermediaries but not relative to total financial assets of the economy. This has been consistent with long-term trend of a decline in the individual ownership of corporate equity in the US.

4.56 Nevertheless, the banks in the US have been losing their share in business and consumer lending to other non-banking intermediaries. The shrinking market share of the banking sector implies that the synergies between the liability and asset sides of the bank balance sheet have reduced. The decline in the market share of the banks may have begun from the liabilities side instead of assets side of the balance sheet, thereby reflecting a decline in demand for deposits rather than a decline in demand for relationship lending. Studies have found empirical evidence of an explicit link between banks' liability structure and its distinctive lending behaviour (Berlin and Mester, 1999). Most banks undertake relationship lending, which is typically associated with lower loan rates, less stringent collateral requirements, a lower likelihood of credit rationing, more contractual flexibility and reduced costs of financial distress for borrowing firms. The foundation of relationship lending depends on the ability of the banks to raise core deposits. The core deposits are rate inelastic in character and enable banks to offer relationship lending by insulating their cost of funds from economic shocks. The banks are, therefore, able to offer multi-period contracts to the borrowers insuring them against adverse credit shocks. However, as banks lose access to core deposits when savers switch their financial savings towards mutual funds, they offer less insurance (loan-rate smoothing) to borrowers. This results in banks losing their market share to intermediaries that hold securities rather than loans. This process explains as to how banks have lost their market share not only to entities offering close substitutes to bank loans but also to entities issuing securities. The declining demand for deposits not only raises banks' cost of funds but also reduces the feasibility of relationship lending by banks, reducing firms' demand for bank loans as they became less distinctive. In other words, the banking sector has been shrinking since their loans have become less "special", reflecting declines in the cost of information processing and communication which have lowered the cost of the duplication of bank services.


4.57 Banks have been losing ground on the liability side of their balance sheet. In particular, as the dependency ratio increased in the US as well as other industrial countries, consumer demand shifted towards saving products from credit products. Asset accumulation in anticipation of retirement has been becoming more important and this market growth has been the fastest for household wealth accumulation. However, the traditional bank deposits – the time and savings account – have been losing ground to mutual funds which have much leaner cost structures and offered significantly higher returns. Accordingly, time and saving deposits of banks have declined steadily relative to fixed income mutual funds since 1980. Furthermore, as non-banks are introducing new technologies, banks are also losing ground in their fundamental role of facilitating payments. The widespread use of credit cards has also eroded the central role played by demand deposits of banks in the payment system. The payment vehicles are increasingly being issued by primarily monoline organisations or distributed nationally by mass mailing which is different from usual multi-product banking relationship and has further eroded banks' previous unique role and demand for its deposit products. The declining role of the traditional intermediation business has led to a decline in the importance of net interest income for both the banking sector and the economy as a whole in the US. As this decline in the basic intermediation business has been economically motivated and technologically driven, it is viewed as likely to be irreversible (F. Allen, et. al, op. cit).

4.58 Although the intermediation business has declined, banks in the US have shifted from traditional intermediation function towards fee-producing activities such as trusts, annuities, mutual funds, mor tgage banking, insurance, brokerage and transactions services. Therefore, while the spread income accounted for a share of 80 per cent in total bank earnings in the late 1980s, region and money centre banks earned more than half of their income from fees and trading income in the late 1990s. Consequently, the structure of banks in the US has altered over the years whereby they are no longer the main repository of liquid savings for the financial system and the primary source for business and consumer finance.

4.59 The trends relating to banks in the US are increasingly being mirrored in other economies such as France, Germany and the UK. The ratio of households' claims on banks as a proportion of their total financial claims has declined in all these countries, which is also being reflected in respect of all non-financial sectors on banks. The ratio of liabilities of banks to non-bank financial intermediaries compared to total financial liabilities has risen significantly. Simultaneously, the ratio of securities liabilities of banks to total financial liabilities has risen somewhat for France, marginally for Germany but stayed roughly the same for the UK over the period 1981-1996 (Schmidt, et al., 1998).

4.60 A feature emerging from the cross country experience is that banks' ability to attract household deposits reflected the different holding pattern of total assets ultimately held by the households in the different economies. For instance, households held only 19 per cent of their assets in terms of cash equivalents including deposits in the US, whereas the share was slightly higher at 24 per cent in the UK in 1994. A significant proportion of 31 per cent was held in the form of fixed income assets such as domestic and foreign bonds, and loans and mortgages, while the largest portion, 46 per cent was held in risky assets including domestic and foreign equity and real estate in the US. In the UK, however, households held significantly lower amounts in fixed income assets at 13 per cent and substantially higher shares in risky equity and real estate assets, at 52 per cent. On the other hand, households are relatively shielded from risk in Japan. They kept 52 per cent of their assets in cash and cash equivalents, 19 per cent in fixed income assets and only 13 per cent in risky equity and real estate assets. Households were also found to be risk averse in France and Germany where they kept 33 per cent and 40 per cent, respectively, of their asset holdings in cash and cash equivalents. It may also be noted that not only the households hold higher shares of their assets portfolio in risky assets in the US and the UK as compared to Germany, France and Japan, but also they hold more in financial assets. Thus, as quantum of financial assets increases, the share of risky assets borne by the households also increases.

4.61 Another factor explaining the relatively higher proportion of household assets in bank deposits in Japan, France and Germany as compared to the US and the UK is that the financial markets are relatively less developed in the former group of countries. In the presence of incomplete financial markets, long-lived financial institutions like banks allow effective inter-temporal smoothing of risks that cannot be diversified at a given point of time, thereby inducing

the households more to park their financial savings with banks than in the case of economies with developed financial systems. In these economies, banks acquire a 'buffer' of short-term liquid assets when times are good and run this buffer down when times are bad. As a result, households that hold most of their assets in bank accounts and other fixed income assets are shielded from risk and are able to smooth consumption streams. On the other hand, in the case of economies with developed financial markets, competition faced by banks from financial markets may not make inter-temporal smoothing by banks viable in the long run. This is because, in good years, households shift their savings out of the banking system for investing in the market to reap better returns and thereby avoid accumulation of bank reserves. Therefore, in bank-based systems such as those in Japan, France and Germany, risk management can be achieved through inter-temporal smoothing as banks eliminate risk by investing in shor t-term liquid assets. Other kinds of risk management are relatively less important as cross sectional risk sharing is correspondingly reduced in importance. On the other hand, in market-based financial systems, inter-temporal smoothing by financial intermediaries is ruled out by competition from financial markets. Financial markets allow high returns in good times and there is an incentive for households to withdraw their deposits from banks and invest the funds in the market. In such a financial system, setting cross-sectional risk sharing becomes correspondingly more important. The individuals or institutions acting on their behalf have to ensure that risks are managed and traded in a way so that those who are more tolerant of risk end up bearing it. Financial systems in such countries become more market oriented and risk management through the use of derivatives and other similar techniques becomes more important. This is also reflected in the evolutionary process of the financial system in the US. Until the mid-1970s, banks were the dominant form of financial institutions in the US and the structure was more like in Japan, France and Germany, whereby banks undertook inter-temporal smoothing. Subsequently, however, the occurrence of financial innovations has changed the form of financial system from a bank-based to a market-based one in the US with banks increasingly demonstrating their willingness to compete with markets. Accordingly, they have entered new markets and developed new products, while their traditional role of taking deposits and extending lending has been steadily shrinking. This has been accompanied by a shift from inter-temporal smoothing to cross-sectional risk sharing. The role of surviving intermediaries has evolved to facilitate cross-sectional management of risks through derivatives and so forth, rather than adopting inter-temporal smoothing of risks.

4.62 In Australia, the performance of the banking system since 1995 has been driven to a large extent by the developments in the household sector. Households have progressively invested an increasing share of their financial assets in market-linked products, through direct holding of equities, investments in unit trusts, and holdings of assets in superannuation and other managed funds. This also reflected, to some extent, changes made in retirement saving arrangements in Australia, notably the introduction of compulsory employer superannuation contributions, which were increased to 9 per cent of an employee's earnings in 2002. To the extent that households invested in market-linked assets, the share of household savings held in deposits with banks and other deposit-taking institutions declined. The development of financial markets changed the banking environment instilling competitive pressures in banks' traditional business lines, notably deposit taking and household lending. Banks initially hoped to attract a significant share of retirement savings into specially designated retirement savings accounts (RSAs) following the Government's approval for these products in 1996. The RSAs are essentially term deposits that attract concessional tax rates if held until retirement age. These products, however, could not evoke much saving interest from the households because even though they were capital guaranteed the rates of interest failed to match the strong returns on investments in equity-based funds during the buoyant share market run in the 1990s. Reflecting limited success achieved in this regard, some of the largest banks adopted an alternative strategy by beginning a series of major acquisitions of asset/ wealth management funds so as to access the fees and income associated with the growing wealth-management sector. Consequently, nearly all of the Australian-owned banks offer some form of wealth management products. As a result of this expansion, banks controlled an estimated 40 per cent of retail funds under management in Australia in 2005 as compared to less than 20 per cent in the mid-1990s. Although these banks had difficulty in maintaining their share after acquisitions, wealth management has become an increasingly important source of revenue for the banking sector. While households' demand for credit has been strong, the household saving rate has fallen and an increasing share has been channelled into non-deposit products. Thus, bank lending growth has outpaced the growth of low-cost retail deposits. Furthermore, the competition among banks for these deposits has also intensified and increasingly some of them have introduced high-yield on-line saving accounts beginning in the late 1990s offering high rates of interest to the depositors relative to traditional transaction and term deposits.

4.63 The banks in Australia also adopted a number of alternative approaches to fund their domestic lending growth, including securitisation and issuing debt securities. While some small banks made extensive use of the strategy of securitisation of their loans, the large banks funded the shortfall by accessing domestic wholesale markets and increasingly, by sourcing of funds from offshore. Consequently, the aggregate of foreign liabilities of Australian banks exceeded the value of retail deposits and accounted for 27 per cent of their total liabilities in 2005 as compared with 15 per cent in the mid-1990s. The foreign liabilities of Australian banks stood at around $ 370 billion in December 2005, with nearly two-thirds of these in the form of negotiable debt securities. The rest of the foreign liabilities comprised non-resident deposits and intragroup transfers. The intra-group transfers formed a relatively important source of funds for foreign bank branches operating in Australia. The shares of retail deposits and wholesale deposits were 23 per cent and 50 per cent, respectively, of total liabilities of the banking system. Australian banks issued securities to a range of markets and currencies, with over 80 per cent of outstanding offshore debt securities being issued into the US and UK markets and a further 10 per cent in Hong Kong and Japan. Despite offshore debt being predominantly (80 per cent) foreign denominated, Australian banks have little exposure to foreign-exchange risk, which is typically hedged using cross-currency swaps and foreign-exchange forward contracts. Net foreign currency debt on the balance sheets of Australian banks was $186 billion as at March 2005 ($117 billion four years ago), of which $168 billion was hedged in derivative markets. A concern, however, that is sometimes raised regarding banks' reliance on foreign funding is the potential rolling over of debt in times of stress. Notwithstanding the difficulties that some emerging market sovereigns have had experienced in refinancing their foreign currency-denominated debt, there was little evidence that in countries with developed capital markets and floating exchange rates, the foreign investors were less likely to roll over their debt securities than were domestic investors (Hall and Veryard, 2006).

4.64 In comparison with the advanced countries, the saving rates in emerging market economies (EMEs) have generally remained higher; the banking systems played an important role in raising the saving rates. In Korea, the foundations of the modern financial system were laid during the early 1950s when the central and commercial banking systems were realigned under the new institutional bases provided by the Bank of Korea Act and the Banking Act. Specialised banks were established during the 1960s, to facilitate capital mobilisation and strengthen financial support for underdeveloped or strategically important sectors. Most non-bank financial institutions were introduced during the 1970s in order to diversify the financing sources, promote the development of the money market, and attract funds into the organised market. With a shift from a government-orientated stance on economic policy towards a market-orientated stance beginning the early 1980s, the number of commercial banks and non-bank financial institutions increased further as part of a series of broad measures to spur financial liberalisation and internationalisation. In the aftermath of the currency crisis in 1997, the Korean financial system underwent substantial changes in the course of the implementation of a comprehensive financial reform programme. In particular, the number of banking and non-banking financial institutions declined as a result of consolidation. Reflecting the structural changes in the financial system in Korea, the share of banks in total assets declined from around 67 per cent in 1995 to around 60 per cent in 2006. The share of merchant banking corporations in the total assets declined from around 5 per cent to around 1 per cent over the same period. This led to an increase in the shares of insurance companies from around 7 per cent to around 13 per cent and that of investment trust management companies from around 8 per cent to around 10 per cent during the same period. As at the end of June 2007, commercial banks in Korea consisted of 7 nationwide commercial banks and 6 local banks (with a total of 4,900 branches) and 36 foreign bank branches. The business demarcation, however, was strict with commercial banks permitted to engage in very limited securities business. They were also not allowed to undertake insurance business until August 2003, after which bancassurance was introduced permitting them to sell insurance products. The principal sources of funds for banks continue to be in the form of deposits, which was around 60 per cent at end-June 2007,while borrowings constituted around 25 per cent of the total sources of funds. Regarding the uses of funds, the banks deployed the largest proportion in extending loans which was around 71 per cent at end-June 2007.

4.65 In Thailand, the structure of financial system underwent significant changes both in terms of number of market participants and the volume of their market activities. By the mid-1980s, 30 commercial banks had 1,526 branches handling the majority of transactions in Thailand. The 16 largest banks accounted for over 90 per cent of assets, deposits, and loans of the commercial banks, indicating a high concentration and little competition in the banking industry (Barbara, 1987). With the growing wave of globalisation in the mid-1980s, Thailand began a progressive deregulation of the financial sector. On the interest rate front, the authorities gradually removed interest rate ceilings in order to encourage savings mobilisation and to make the financial system more dynamic. Interest rate ceilings on long-term time deposits were abolished in June 1989, on short-term time deposits in March 1990, on savings deposits in January 1992, and on loan rates in June 1992. In addition, the central bank in 1992-93 gave commercial banks more flexibility by loosening the requirement of government bond holding as a pre-requisite for opening up new branches. The obligations of commercial banks to extend credits to rural borrowers or those in the vicinity were also relaxed to cover more related occupations and wider geographical areas. An analysis of the liabilities of banks reveals that the share of deposits in total liabilities, which had declined from 77 per cent to 70 per cent in 1996, increased to 79 per cent reflecting post-crisis recovery. Thereafter, the share of deposits again declined to around 72 per cent in 2007. On the other hand, the share of borrowings in total liabilities, which had increased from 9 per cent in 1991 to 9.3 per cent in 1996, declined to 3.4 per cent in 2003 before increasing to 8.5 per cent in 2007. The ownership pattern shows that bank deposits in Thailand are predominantly held by households. However, the share of individuals in total deposits declined from around 69 per cent in 1999 to around 61 per cent in March 2008. On the other hand, the share of the business sector in total deposits rose from 16 per cent to 20 per cent during the same period.

4.66 The general decline in deposits since the early 1990s was reflected in the persistent fall in the gross domestic savings rate of Thailand from a peak of 36.3 per cent of GDP in 1991 to 35.1 per cent in 1997 (the crisis year). After recovering to the pre-crisis peak in 1998, the saving rate continued its declining trend and reached 31.8 per cent in 2006. This drop in the saving rate was mainly on account of the household sector, which could be attributed to three major factors such as the rise of social security programme, the boom in consumption and the shift between corporate and household savings. Since the early 1990s, the government, in its efforts to mobilise savings, instituted a multi-pillar approach to social safety net programme to ensure appropriate welfare for old ages and retirees as well as promote domestic saving. On the other hand, public and corporate sector saving rates behaved pro-cyclically. The share of net public saving in the gross saving rose from a low single digit in the early 1980s to roughly 25-28 per cent during the pre-crisis period of economic boom before dropping to 10 per cent right after the crisis. It, however, recovered to 18 per cent of gross national saving in 2002-03. The share of net corporate saving rose steadily from 9 per cent of gross national saving in the early 1980s to 25 per cent right before the crisis, reflecting the higher growth of the corporate sector income relative to other sectors in the economy during the time period. After the crisis, its share, however, plummeted temporarily to 6 per cent, but rose subsequently to a high of around 26 per cent in 2002-03, given favourable economic conditions and rising corporate profits after the crisis (Pootrakool et al, 2005).

4.67 In China, prior to the late 1970s, People's Bank of China (PBC) was virtually the only financial institution that conducted all types of financial services business (though very limited in variety and size), besides being the regulator. The dual banking system emerged in 1984 with the separation of commercial banking from central banking (Shiyu, et al. 2006). Apart from the separation of Industrial and Commercial Bank of China from the PBC, three other specialised banks emerged. However, their business operations were limited within the framework of a planned economy. In tandem with the reforms towards a socialist market economy, these specialised banks were made to transform into real commercial banks in 1993. This was facilitated by the emergence of three large policy banks in 1994 to separate policy financing and commercial financing. The Law of Peoples' Republic of China on Commercial Banks was enacted, establishing the specialised banks as state-owned commercial banks but making them responsible for their business operations. By the end of 2004, apart from the four state-owned commercial banks and three policy banks, several other type of banks such as 12 share-holding commercial banks, 112 city commercial banks, 681 urban credit co-operatives (UCCs), 32,854 rural credit co-operatives (RCCs), eight rural cooperative banks, seven rural commercial banks, 211 foreign financial institutions, 220 foreign bank representative offices, four asset management companies, 59 trust and investment companies, 74 finance companies, 12 financial leasing companies, three auto financing companies and a large number of post office savings institutions emerged. Reflecting the expansion of the financial system, deposits grew steadily from 31.1 per cent of GDP in 1978 to 176.2 per cent of GDP in 2004. Despite the diversification of the financial systems in terms of institutions and markets, banks continue to predominate reflecting more public confidence on banks over other market-based institutions facilitated by the implicit insurance cover provided by the State. Although the Gover nment has attempted to provide similar protection and intervention to capital market, the nature of capital market has tended to make the public less confident. Therefore, the process towards market-based financial activity in China has yet to be steady or significant (Liping He, 2005).

4.68 To sum up, the cross-country experiences suggest that as the financial sector develops, the savers are attracted towards new financial instruments away from the traditional bank deposits. This is more so when capital markets witness favourable conditions. The decline in the deposits held by the household sector, however, is compensated by deposits by non-bank intermediaries. Thus, the banking sector experiences a reduction in size in relation to other intermediaries, but not in relation to total financial assets of the economy. In fact, the current phase of the banking sector in India more or less mirrors this pattern. Nevertheless, banks combine aggressive deposit mobilisation with exploring newer ways of raising cost-effective non-deposit resources to meet their resource requirements. This, however, poses many challenges to both the banks and the regulators in view of its implications for liquidity and solvency of banks and the overall stability of the financial system. In emerging markets, resource mobilisation by banks has played an important role in sustaining high domestic saving rates. In recent years, however, deposits mobilised by banks moderated somewhat, reflecting disintermediation, boom in consumption as well as the need for enhanced social security programmes necessitated by the changing demography.

V. EMERGING ISSUES AND THE WAY FORWARD

4.69 As the Indian experience shows, the acceleration of economic growth has been largely enabled by the sustained increase in the level of domestic savings, expressed as proportion of GDP. Historically, household savings have been the mainstay of the gross domestic savings of the Indian economy. In recent years, however, there has been sharp increase in the private corporate savings and public sector savings rates, reflecting strong growth in corporate profitability and fiscal prudence due to the implementation of the Fiscal Responsibility and Budget Management (FRBM) Act, 2003. It may, however, be noted that the improvement in corporate sector savings on account of higher profitability was largely an outcome of the reforms pursued over the years, whereby forces of global competition and conducive policy environment led to an improvement in productivity and efficiency. In the years ahead, acceleration in the saving rate of the private corporate sector may not continue at the same scale in view of the fact that the early benefits of reforms reaped by the corporate sector, especially by deleveraging of balance sheets, may not be available at the same scale in future (Mohan, 2008). Similarly, with the Central Government budgeting a revenue deficit of 1 per cent of GDP instead of 0 per cent of GDP as stipulated under the FRBM Act for 2008-09 and further risks to fiscal consolidation from various factors, including the expected pressures from the implementation of the Sixth Pay Commission award, there would be limits to further increases in public sector saving rates in the short run. Therefore, improving the household sector saving rate should constitute the main plank for sustaining the overall domestic savings in the Indian economy.

4.70 In this regard, it may be noted that the share of financial savings (net of financial liabilities) in total household savings has declined by almost 10 percentage points to around 47 per cent in the current decade, reflecting higher savings in physical assets. Accordingly, a major challenge would be to raise financial saving rate which would depend on further deepening of the financial sector through introduction of new instruments with features catering to the household sector's requirement consistent with their risk-return and maturity profiles as well as through the continuation of insurance and pension reforms. Furthermore, another challenge would be to release resources of the household sector held in physical assets over and above the genuine requirement for savings in various financial assets. Although households continue to hold their financial savings mainly in the form of bank deposits, there was a significant decline in its share in total financial savings from an average of around 45 per cent during 1970-1984 to around 37 per cent during 1995-2005, before increasing to 51 per cent in the last two years. The recovery partly reflects the aggressive efforts at mobilisation of time deposits by banks from 2005-06 onwards to meet high credit demand and was partly facilitated by the Government measure of extending tax incentives on special bank deposit schemes. The interest rate differential between small savings/post office deposits and bank deposits, which narrowed down initially, turned subsequently in favour of bank deposits in view of unchanged interest rates on small savings/post office deposits, which also made the bank deposits more attractive. Accordingly, the sharp jump in time deposit growth reflected to an extent some switch away from small savings, signifying only a portfolio shift and it is a moot question as to whether the current trend would be sustained. Therefore, to sustain the recent trend in deposits, banks need to tap hitherto untapped savings, especially in rural areas, by introducing appropriate deposit schemes suitable to savers with various risk and return profiles.

4.71 The current phase of high growth has been supported by a step up in the household gross financial saving rate, which, in turn, has been led by aggressive mobilisation of deposits by the banks. It is observed that the increase in the growth rates of real GDP from 5.8 per cent during 1992-93 to 2002-03 to 8.8 per cent during 2003-04 to 2006-07 was supported by the household gross financial saving rate increasing from 12.1 per cent of GDP to 15.6 per cent. Over the same period, the ratio of bank deposits to household gross financial savings increased from 36.7 per cent to 44.0 per cent. A sensitivity analysis based on these trends shows that raising real GDP growth by one percentage point would require 1.2 percentage point increase in the household gross financial saving rate (gross financial savings/nominal GDP) in the current phase of economic growth. This, in turn, would require the ratio of bank deposits to gross financial savings to grow by 2.5 percentage point. In the light of the growing resource requirements for sustaining the high growth momentum of the Indian economy, banks would have to reassess their traditional strategies of resource mobilisation, including from the rural sector.

Implications of Changing Pattern of Bank Deposits

4.72 Following the financial liberalisation since the early 1990s, some shifts have taken place in the ownership pattern of bank deposits. The household sector's share in aggregate deposits has steadily declined, while the shares of the Government and corporate sectors have increased. The decline in household sector's share reflects mainly the sharp fall in their shares in term deposits. The increased interests from the corporate and Government sectors reflects the favourable impact of successive shortening of the stipulated minimum maturity of time deposits as well as the policy of allowing banks to offer differential interest rates on wholesale term deposits. Another notable feature in respect of time deposits has been the decline in the share of deposits of over five years maturity across all the sectors, reflecting availability of alternative saving instruments with attractive returns. This phenomenon is not confined to India alone and was observed in several other countries, as was alluded to earlier.

4.73 As the financial sector develops, the share of non-deposit saving instruments tend to increase at the expense of bank deposits. This trend is expected to accentuate in the coming years. The challenge, therefore, for the banks is to mobilise hitherto untapped savings and to improve their services to not only retain their existing depositors but also attract new depositors. They would also have to widen their deposit base through exploring new opportunities thrown up by the recent emphasis on inclusive growth and financial inclusion. As the growth process strengthens and becomes more inclusive, it is expected that demand for financial products would accelerate rapidly, necessitating a greater penetration of banking services.

Changing Demographics and Financial Services

4.74 Banks also have to recognise the changing saving patterns associated with the changing demographic profiles. The proportion of population in the working age group of 15-64 years is expected to increase steadily from 62.9 per cent in 2006 to 68.4 per cent in 2026. Accordingly, the dependency ratio (ratio of dependent to working age population), which declined from 0.80 in 1991 to 0.73 in 2001, is expected to decline further to 0.59 by 2011 (GoI, 2008). The changing demographics appear to have played a role in the shift in composition of household savings towards physical assets, especially reflecting housing demand. Accordingly, banks would also need to devise innovative strategies of mobilising surplus resources from a progressively younger age profile of savers. Another noticeable feature emerging in India is that public sector employment, which grew by an average of 1.53 per cent per annum during 1983-1994, declined by 0.70 per cent during 1994-2005. On the other hand, growth in private sector employment in the organised sector accelerated from 0.44 per cent to 0.58 per cent over the same period. With the private sector leading the growth in organised employment, there would be an increased demand for varied financial products such as insurance and other contractual saving instruments consistent with the changing risk-return profiles of the working age population. The changing demographics and employment patterns would generate demand for a wide range of financial services such as insurance, housing and other financial products with innovative features. In order to reap the benefits of the changing demographics and employment patterns, banks would have to re-orient their role as financial intermediaries beyond the traditional confines of passive deposit mobilisation and lending by providing a package of financial services as demanded by the customers. Ipso facto, the customers would be keeping their deposits with the banks.

Rural Deposit Mobilisation – Need for Innovations

4.75 Against the backdrop of a decline in the share of rural deposits in total deposits of SCBs since the 1990s, there is a need to step up efforts to access rural savings to raise the overall deposit mobilisation of banks. Although there are many challenges, the rural sector throws up vast opportunities for banks to reap the benefits of low cost large deposit base, which may not be available to other financial intermediaries. The international experience provides some useful lessons in this regard.

4.76 The rural sector harnesses the power of providing small amounts of household savings which can be mobilised by the banks that can be made available for productive uses to rural and agricultural enterprises. A major challenge faced by banks in rural areas is that deposit transactions often involve small amounts and display irregular patterns reflecting seasonality and erratic nature of small scale income generating activities. In order to cater to this demand, many banks in the Philippines have adopted 'piggy banking' concept, whereby small locked boxes were provided to the savers to be maintained at their homes after opening of the savings account with a minimum deposit. The keys were kept with the banks. This allowed the clients to save small amounts on a daily basis in their boxes and bring them to the banks when they intended to deposit their savings. This enabled reduction in banks' time on collections (USAID, 2005). Another major challenge lies in identifying appropriate technologies to reduce significantly the costs of doing rural business that result from low population density and poor physical infrastructure. While technological and management information system (MIS) solutions are necessary to overcome this challenge, their impact on the efficiency, quality of services, bottomlines and outreach potential of the banks need to be carefully assessed. For instance, local technology firms in the Philippines helped develop open source software to meet the specific needs with multiple branches and units and the central bank's data processing and reporting requirements. This software allowed customisation of the technology by the rural banks and its flexible adjustment in tandem with additions or changes in products. It proved to be high quality and cost effective system that improved the banks' ability to quickly and efficiently handle multiple transactions and more clients. Thus, although there are challenges in tapping rural savings, the international experience shows that these challenges could be met effectively by adopting some innovative methods. The experience of other countries with suitable adaptations can be a guide to the banks attempting to expand their outreach in the rural sector and boost rural savings.

Competition from Other Intermediaries/Markets

4.77 With greater avenues for the deployment of funds and the prospects for higher returns enabled by the development of markets, investors progressively diversify their por tfolios across instruments and institutions, thereby demanding financial services for management of cross-sectional risks. This leads to a change in the nature of the demand for intermediation services, whereby investors look beyond stable returns offered by bank deposits while parking their surplus funds. This, in turn, leads to the emergence of a number of specialised intermediaries/markets that are able to cater to the evolving investor requirements. Against the backdrop of the ongoing financial innovations following the adoption of financial liberalisation in India in the early 1990s, equity market related instruments such as equity shares and units of mutual funds have been gaining importance in view of their higher returns, albeit with higher embedded risks. To an extent, this trend has resulted from the natural process of financial market development, whereby new instruments gain popularity with a decline in transactions cost and asymmetric information. By enabling investors in better assessment of risk-return perceptions, this has widened the choices of investments. With traditional deposit base of banks shrinking with these developments, there is a need for them to extend their outreach to prospective depositors/investors by expanding the ambit of the specialised financial services offered by them by repackaging and redesigning of products to suit individual needs.

4.78 Banks, however, face various constraints compared to non-banks while diversifying their activities. First, non-banks are able to manage their resources more effectively by having a leaner cost structure and quickly adopting new technologies, thereby offering higher returns. Furthermore, non-bank intermediaries such as brokerages, asset management firms and mutual funds are able to offer specialised services like cash management and wealth management for various investors, including high net worth individuals. Second, unlike non-banks, banks are often subjected to various regulatory requirements such as statutory stipulations of reserve requirements, directed lending, prudential regulations driven provisioning requirements and limits on capital market exposures. While these measures promote financial stability, they constrain the diversification opportunities thrown by a developing financial system. Third, special deposit schemes announced by the Government from time to time which offer not only higher returns but also provide tax incentives, boost effective returns vis-à-vis the traditional bank deposits, thereby constraining banks' effor t at deposit mobilisation. While various restrictions on banks and prudential requirements may be justifiable from the special role banks play in the system, the policy anomaly arising out of tax benefits needs to be removed to provide banks a level playing field.

Need for Continued Focus on Deposits


4.79 Banks have the benefit of low cost deposit base which, to an extent, make them immune from the day-to-day market volatilities. Thus, the core deposit base serves as a source of 'stored liquidity' which is durable as compared with 'borrowed liquidity' originating from the market. Another distinguishing feature is that while deposits rates are relatively more rigid, interest rates on borrowing vary more flexibly in tune with the market conditions. During periods of favourable macroeconomic conditions characterised by abundant liquidity and low nominal rates, the low perception of financial risks often induces financial market participants to undertake progressively higher risks. On the other hand, during periods of turbulence caused by any unforeseen event, the resultant reassessment and repricing of risks by investors trigger heightened uncertainties in the market and thereby expose the excessively leveraged entities to the risk of default. Therefore, while accessing the market for borrowed liquidity have the benefits, the probability of excessive leveraging associated with borrowings calls for adequate safeguards to protect the fund base from unforeseen events. This was borne out by the Northern Rock crisis, a UK-based bank, which had a higher share of borrowed liquidity vis-à-vis stored liquidity. Faced with problems in mobilising funds from the market due to the tightening of credit conditions, the performance of the bank was adversely affected prompting depositors to withdraw their money in large numbers, which ultimately resulted in a bank run.

4.80 Banks in India have traditionally relied on deposits for their funding requirements. Their reliance on borrowings has been insignificant. As the economy expands and the demand for funds increases, banks at times may find their deposit resources to be insufficient for meeting the growing demand, thereby encouraging them to raise funds by way of borrowings. Going by the Northern Rock experience, heavy borrowing by banks has serious implications, especially during financial distress, and, therefore, too much reliance on borrowings needs to be avoided. In case banks resort to such borrowings, they also need to adopt appropriate internal risk management strategies. In particular, while the increased flexibility given to banks in India in recent years opens up new opportunities for raising resources, the enhancement of associated risks would demand appropriate management of their liabilities through minimising costs along with mitigation of risks arising from adverse movement in interest rates and exchange rates. They need to regularly review their business strategies so that they are in a position to combine longer term viable financing with profitability in operations.

Need for Skill Development in Banks

4.81 Banks while gearing to face competition from non-banks and capital market instruments both at home and abroad, which is likely to increase in future, would have to appropriately price and package their products to remain competitive, which would demand appropriate skill development at bank levels. While banks have the potential, they need to invest significantly in skill enhancement at all levels, for developing innovative products and delivering new service modes in the face of increased competition. Public sector banks face added challenges while attracting and retaining new personnel in the face of rigid compensation structures in comparison with private and foreign sector banks.

Implications for Monetary Policy

4.82 Moving forward, resource mobilisation that dovetails into the transition to the higher growth trajectory is likely to lead to more product innovations on the part of both banks and non-banks. With the blurring of distinctions between banks and non-banks from the functional perspective and increased substitutability of bank deposits with other saving instruments, the assessment of monetary aggregates for drawing policy perspectives would have to be carefully undertaken. Furthermore, addition of new features into the financial instruments would have implications for the conventional mode of accounting based on identifiable characteristics of money. With the growth process strengthening and becoming more inclusive, the demand for housing, urban services, retail and utilities is expected to be scaled up as disposable incomes grow. In such a scenario, it is likely that growth in bank credit and monetary aggregates might deviate, and persistently so, from what might be expected from historical relationships and elasticities in view of the ongoing structural changes. This raises the critical issues of clarity in reading signs of inflation, asset prices and systemic liquidity from money/credit expansion.

VI. SUMMING UP

4.83 Historically, banks in India have played a central role in mobilising and allocating resources for supporting the growth process. The nationalisation of private sector banks in 1969 marked a turning point in the history of the banking sector in India. Large branch expansion that followed enlarged the deposit base of banks in rural and semi-urban areas. Although another wave of nationalisation in 1980 carried forward this process, the aggressive strategies of fund mobilisation by mutual funds and NBFCs in the backdrop of buoyant capital market in the second half of the 1980s set in process of some disintermediation of household savings. Some deceleration in bank deposit growth was again observed during 1995-2005 in tune with the maturing of saving preferences under a deregulated market environment. However, bank deposits growth accelerated significantly during 2005-2008 due to vigorous deposit mobilisation efforts by banks in the wake of strong credit offtake. This was despite the sharp growth in other instruments such as shares and units of mutual funds.

4.84 Bank deposits have all along been the mainstay of the savings process in the Indian economy. Although banks have played an increasingly important role in stepping up the financial savings rate, physical savings, nevertheless, have tended to grow in tandem with the financial savings. A major challenge, thus, is to convert unproductive physical savings into financial savings. This is also necessary for banks as they face several challenges in realising the full potential of deposit mobilisation in a growing economy. Bank deposits have become relatively less attractive to the households in view of the availability of a wide menu of alternative saving instruments offering scope of higher returns to savers. Furthermore, savers have also become more informed in managing risks of their portfolios through the use of specialised services offered by other financial intermediaries. This behaviour is expected to accentuate in future. In view of the shrinking share of the household sector deposits in total deposits, banks need to explore ways of broadening the depositor base as also provide improved services for retaining their clientele. It is, therefore, necessary for banks to seek for new sources of deposits. There is an enormous potential in rural and semi-urban areas and banks need to tap these sources. This, however, would require banks to offer customised products with features suitable to individual risk-return requirements as well as economise on their operational costs through diversification of activities. In this context, the recent policy emphasis on financial inclusion offers greater scope for banks to widen their deposit base. Furthermore, the changing demographics and employment patterns have also thrown opportunities for banks to expand their role by bringing the depositors with younger age profile within their fold. The substitution of funds from banks to non-bank instruments and vice-versa has been observed in the recent past and such trends may also occur in future. This would call for greater care in the assessment and interpretation of monetary aggregates.

http://rbi.org.in/scripts/PublicationsView.aspx?id=10488

The Political Demography of Ethnicity, Nationalism and Religion

Thanks to the support of:

Special Issue of Journal of Ethnopolitics on the Demography of Ethnic Conflict, coedited with Christian Leuprecht (planned for late 2010). Features my article on Demography and Dominant Ethnicity in Northern Ireland and also (with Richard Cincotta), article on Demography and Ethnic Conflict in Israel

Conference 2009: 'Demography and Security: the Politics of Population Change', Weatherhead Center, Harvard University, organized by Monica Toft, Jack Goldstone and myself, May 7-8, 2009.

Conference 2006:

Political Demography: Ethnic, National and Religious Dimensions, September 29-30, 2006, London School of Economics (details below):

Plenary Speakers

Jack A. Goldstone Its All Political: Why Demography isn't Just for Demographers Anymore

Jack Goldstone (PhD Harvard University) is Hazel Professor and Director of the Center for Global Policy at George Mason University, and a Scholar at the Mercatus Center. He is the author of Revolution and Rebellion in the Early Modern World (California 1981), and editor of The Encyclopaedia of Political Revolutions (Congressional Quarterly 1998).

Michael Hout : The Demographic Imperative in Social Change: Political Implications

The balance of fertility, mortality, and immigration fuels a population's growth. If important groups are growing at different rates, then their relative sizes will change over time. This demographic imperative can have a direct effect, as in the growth of evangelical Protestants in the USA over the last thirty years. It can have second-order effects too. One example is the well-known case of Northern Europe's greying welfare states. Entitlements tied to age succeed if age structures remain stable but can fail if the age structure shifts. Economic growth and performance respond to age structures too.

Michael Hout (PhD Indiana University) is professor at the University of California, Berkeley where he currently chairs the Graduate Group in Sociology and Demography and the Berkeley Population Center. He and Claude Fischer recently finished a book on twentieth-century social and cultural trends in the United States that exemplifies this approach; Century of Difference will be published by Russell Sage Foundation in Fall 2006. Another book, The Truth about Conservative Christians with Andrew Greeley, will be published in August 2006 by University of Chicago Press.

Monica Duffy Toft : Population Shifts and Civil War

Monica Duffy Toft (PhD University of Chicago) is Associate Professor of Public Policy at the Kennedy School and the Assistant Director of the John M. Olin Institute for Strategic Studies at Harvard. She was a research intern at the RAND Corporation and served in the U.S. Army in southern Germany as a Russian voice interceptor. She is the author of two book manuscripts, a monograph, The Geography of Ethnic Violence: Identity, Interests, and Territory, and an edited volume, The Fog of Peace: Strategic and Military Planning Under Uncertainty.

Conference Panel Speakers (with Presentations and Papers where available) by Theme:

Topics:

Book of Abstracts I (alphabetised) – pdf

Book of Abstracts II (alphabetised) – Excel


Sutay Yavuz, Max Planck Institute, Rostock
Ethnic Differences in Fertility Transition in Turkey (presentation)

Turkey has reached advance stage of Demographic Transition. This study aims to investigate determinants of the differential fertility transition pattern of Turkish and Kurdish women in Turkey.

Valér Veres -Babes-Bolyai University Cluj
Differential Demographics in Transylvania: Ethnocultural or Economic Factors?

An analysis of differential changes in fertility and natural increase in Transylvania including the role of ethnicity and economic development on fertility patterns, measurement issues.

Ram B. Bhagat, International Institute for Population Sciences, Mumbai
Hindu-Muslim Fertility Differentials in India

Hindu-Muslim differentials in fertility is no more than one child in India. It is not likely that Muslims will outnumber Hindus in foreseeable future.

Philip Verwimp, Institute of Social Studies, the Hague
Child Survival and Fertility of refugees in Rwanda (paper)

The paper researches the differential fertility history of refugee women and non-refugees in Rwanda. (Paper joint work with Jan Van Bavel, Free University of Brussels.)

Arvinda Meera-University of Tuebingen
Women's autonomy and fertility: A comparison of tribal and non-tribal women in India

Tribal women have a lower status, lesser autonomy and higher fertility than non-tribal women in India.

Bandita Medhi, Arya Vidyapeeth College
Demographic Patterns And Impact On Education In Assam

There has been a drastic change in the demographic pattern of the State of Assam since 1901. The paper examines the factors affecting these changes and their impact on educational enrolment.

Apostol Apostolov and Petya Dankova, Varna University of Economics
Ethnicity and family planning & Labour Emigration (Bulgaria) (paper)

A discussion of the impact of socio-cultural, ethnic and religious factors on family planning and labour emigration processes, based on a representative empirical study

Harald Wilkoszewski, Max Planck Institute for Demographic Research / LSE paper
Demographic change and the balance of power in Europe.

In this paper we examine the effect of differential population growth on the balance of power in the EU's Council of Ministers.

Wolfgang Lutz and Vegard Skirbekk – IIASA (International Institute of Applied Systems Analysis)
The Low Fertility Trap Hypothesis: Forces that May Lead to Fewer Births in Europe (paper)

The paper's hypothesis describes plausible self-reinforcing mechanisms that would result, if unchecked, in a continued decrease of the number of births in Europe.

Upala Barua , Cotton College, Assam, India
Cultural And Administrative Factors On Differential Fertility Rates in Assam, India (paper)

This is a study of the fertility status of two communities pursuing the same religion but migrated to the State at two distinctly different periods from two different locations.

Branislav Djurdjev, University of Novi Sad
Majorities And Minorities In Ex-Yugoslav Countries

The paper considers ethnic changes in the area of former Yugoslavia. In our days former majorities are stronger in their native countries and weaker in all other parts. Minorities tend to emigrate.

Ould Isselmou, Office National de la Statistique
Fertility Differentials : A Comparative Study (N & W Africa)

The study shows the level, trend and differential in fertility among North African and West African countries.


Elizabeth Leahy, Population Action International
The Shape of Things to Come: Population Age Structures and their Meanings

Description of the relationship between demography and political stability; analysis of connections between population age structure and risk of civil conflict in developing countries from 1970-2004.

Sarah Staveteig, University of California, Berkeley
Youthful Age Structure and Ethnic Conflict: Is there a Connection?

One cascading effect of population growth-age structure-is a predictor of civil war, but not of ethnic war. However, differential minority age structure appears to help predict ethnic conflict.

Christian Leuprecht, Royal Military College/Queen's University, Canada
The demographic security dilemma

Henrik Urdal, Peace Research Institute, Oslo
Censuses Recording, Ethnicity and Increased Risk of Political Instability and Violence  paper

The paper addresses the relationship between publishing ethnicity data from censuses and political stability and violence.

Tamas Makany U. of Southhampton
An Agent-based Model of Crisis-Driven Migration and Ethno-Religious Conflict

An agent-based model simulates crisis-driven migration and ensuing ethno-religious conflict; generates migratory patterns based on local crisis, ethnic tension, demography and breadth of networks.

Richard Cincotta, National Intelligence Council (USA)
Does a Demographic Transition Promote a Democratic Transition? presentation

The authors propose to formulate and test a series of hypotheses that predict the increased likelihood of a drift toward democracy as an autocracy's ethnic population age structures mature

Indra De Soysa, ISS/NTNU (Norway)
Dare to be Different! Ethnicity & Political Terror (paper)

This study will empirically assess the nexus between dissent and repression in ethnically fractionalized and exclusionary political environments.


Eliott Green, London School of Economics
Demographic Pressure and Ethnic Conflict in Contemporary Uganda (paper)

Uganda possesses both extreme ethnic diversity and a high rate of population growth. I argue here that the combination of these factors means that Uganda will see more ethnic conflict in the future.

Ricardo Neupert, UN Population Program & Silvino Lopes, NSD Timor L'Este
The demographic component of the east Timorese crisis (paper)

This study analyses the demographic determinants of the recent crisis in East Timor, which has the form a violent rivalry between the population of the Eastern and Western regions of the country.

Aitalina Azarova, Central European University
Consequences of the change of dominant ethnic group in the Sakha Republic (Russian Federation) (paper)

Discussion population growth of the Sakha and Russian people in one Russian region. Changing balance of social and political standing has affected the degree of ethnic tension

Mitch Young, London School of Economics
Property Law, Ethnic Fractionalisation and Return Migration in Post-war Bosnia

An analysis of factors affecting the return of refugees and displaced persons to pre-war property holdings in Bosnia and Herzegovina.

Renu Bhagat, The New School for Social Research, New York
Religion, Race and Caste: Comparing Affirmative Action in the India and the United States

This paper will examine the role of the state in identity construction in India and the United States,through Affirmative action plans.


Ugur Ungor, University of Amsterdam
Demographic engineering in the 20th century: a comparative historical-sociological approach (presentation)

Demographic engineering is the range of state-sponsored policies to maintain maximum homogeneity. This comparative paper outlines various episodes of demographic engineering in the twentieth century.

Tatyana Kotzeva, Center for Population Studies, Bulgarian Academy of Sciences
Depopulation in Bulgaria in the Times of Transition: Political and Scientific Visions

The presentation will analyse different interpretations and visions of Bulgaria's depopulation since the early 1990s, mainly nationalistic visions and more moderate and politically neutral views.

Cynthia Buckley, The University of Michigan
Russia Counts: The Social Construction of the 2002 Census

This paper examines the delays, debates and disagreements associated with the 2002 census of the Russian Federation.


Abby Day, Lancaster University
Believing in Belonging: a qualitative analysis of being Christian for the 2001 census (presentation)

Seventy-two per cent of respondents to the UK 2001 census affiliated to Christianity. The paper explains explorer this data via an intergenerational qualitative research project.

Hannah Cameron, Brussels School of International Studies
Transnational Marriage between Britain and the Indian Sub-continent: an evaluation of the demographic impact (paper)

The proposed paper will consider the demographic impact of transnational marriage, with reference to marriage between British born Asians and citizens of the Indian subcontinent.

Vegard Skirbekk & Katrin Fliegenschnee IIASA (International Institute of Applied Systems Analysis)
New Times, Old Beliefs: Projecting the Future Size of Religions in Austria (paper)

The paper presents the results of demographic projections for Austria for the next half century.

Eric Kaufmann, Birkbeck College, University of London

The End of Secularisation in the West? (presentation paper)

An analysis of differential fertility and secularisation patterns points to a growing long-term religious percentage of the west European  population

David Voas, University of Manchester
The Future of Christianity in Europe (presentation)

European countries have large subpopulations of people who are neither particularly religious nor decidedly unreligious. Despite its current size and strength this group is destined to dwindle.

Caroline Berghammer & Dimiter Philipov Vienna Institute of Demography
Religiosity and Demographic Events: a Comparative Study of European Countries (presentation)

We study the association between religiosity and young adults' life-course events in 17 European countries based on 3 theoretical aspects. Theoretical background and empirical results are discussed.

Jon Anson & Ofra Anson, Ben Gurion University of the Negev
Religion, Nationalism and Demography: False Consciousness, Real Consequences (paper)

Religion and nationalism are both social phenomena reflecting in consciousness what differential fertility reflects in practice: (class) struggles over access to socially created resources.


Liam Kennedy, Queen's University Belfast
Did Industrialisation Matter? Ethno-National Conflict in Ulster

Uneven industrialisation in Ireland shaped the conflict of nationality in Ireland but the vital link was through demography.

Amy Bailey, University of Washington
Fertility and Revolution: How Does Political Change Influence Reproductive Behaviour? (paper)

I use historical data to link revolution, individualistic ideology and fertility decline. Results indicate revolutions, not institutional political structures, predict the onset of fertility decline.

Margitta Maetzke, Georg August University Goettingen
Production, War, and Reproduction: State Interests in the Welfare State across Time

Implicit demographic motives in Western welfare policy: Resource-dependent states view their populations as taxpayers, workers, soldiers, and mothers. Social policies reflect this resource interest.


John Garcia, University of Arizona
Global citizenship among Latino immigrants in the United States (paper)

Examination of global citizenship among Latino immigrants in the United States; interactions, orientations,and attachments in country of origin and residence influencing civic engagement.

Ross Bond, University of Edinburgh
Scottish graduate migration: barriers to belonging? (presentation)
Scottish graduate migration: barriers to belonging? (paper)

Describes recent research on graduate migration in Scotland within a political context in which increased immigration to Scotland (especially of highly skilled individuals) is encouraged.

Ludi Simpson, University of Manchester
Segregation and integration in the UK (presentation)

Black and Asian populations are dispersing within the UK. But population growth enlarges clusters of minorities, identified negatively in media and political discourse. A review of the evidence.

Anwar Muhammad, University of Bergen
From Exclusion to Inclusion: the Pakistani Community in Norway (presentation)

This paper instead of seeing Pakistani immigrants precarious situation in simplified cultural terms, it presents the situation from political, social and demographic discourses.

Kiran Bhairannavar, University of Delhi
Migration, identity and conflict: the politico-demographic landscape of Assam state, India

Massive population influx in Assam has permanently changed its demographic landscape leading to conflicts and emergence of Identity movements having far reaching consequences.

Andriy Ushakov, Kharkiv National University of Economics
International co-ordination of illegal migration control: Ukrainian context

Migration in Ukraine, formerly a socio-cultural phenomenon, is now becoming an ethnic and national issue.

Scott Greer, University of Michigan
Migration in a Stateless Nation: Catalans and 'Immigrants' in the Democratic Transition

National political entrepreneurs' response to immigration by a different ethnic group, both in terms of organisational and ideological terms, based on a case study of 1970s Catalonia.

Eduard Rodriguez-Martin, Ecole des hautes etudes en sciences sociales (EHESS)
The New 'Fear of the Moor': Ethnicisation of the Demographic Discourse in Melilla, Spain

Since the census of the Muslim population of Melilla in 1986, demographic data has been used by Christian and Muslim communities to maintain a social stratification based on ethnical criteria.


Christian Autengruber, Andrassy University, Budapest, Hungary
Ethnic demography and party policy: voter alignment in Bulgaria, Romania and Slovakia (presentation)

Philip Howe, Adrian College, Michigan
Voting Across Ethnic Lines in Late Imperial Austria (paper)
Voting Across Ethnic Lines in Late Imperial Austria (presentation)

A comparison of district- and sub-district-level data over time reveals a surprisingly high degree of voting across ethnic lines in Late Imperial Austrian elections.

http://www.sneps.net/research-interests/political-demography-ethnicity-nationalism-religion

Muslim exclusion in India is deliberate: Prof. Javeed Alam

Submitted by admin on 13 March 2010 - 8:54pm.

By TCN News

Hyderabad: Muslims in India are badly under represented in different spheres of life. Their exclusion is rather dramatic. However, like other backward communities, Muslim marginalization has its own history. Prominent Social Scientist, Professor Javeed Alam, Chairman, Indian Council of Social Sciences & Research (ICSSR) expressed these views on Friday while delivering a lecture on "Contemporary Muslim Situation in India: Temporal Dimension" at Maulana Azad National Urdu University.

He was delivering a lecture on "Contemporary Muslim Situation in India: Temporal Dimension", Orgarnized by the Centre for Study of Social Exclusion and Inclusive Policy (CSSEIP). Prof. Khalid Saeed, Vice-Chancellor presided over the lecture. Tracing the history of Muslim exclusion & backwardness, Prof. Jevaeed Alam asserts it to be the result of colonial era & practices. Commenting on the political status of Muslim in India, he said that Muslim politics has disappeared from India after Independence. It is an era of region specific Muslim politics. Muslims, in religions terms may be called as a single community, but Muslims in India are not a singular community. Region & language are two of their major distinct features.

He focussed on Social Exclusion of Muslims and the present situation of the community in the country.  He highlighted the plight of poverty in the country in general and Muslim Community in particular. He pointed out that colonial rule is responsible for the creation of poverty in India in general and Muslims in particular.  In this country, disadvantaged sections and women have been preventing in accessing resources especially since the British rule.  Pointing out regarding gender issues, he observed that women have no control over their "work", "time" and "body". Men would dictate and decide what women should do. He also pointed out that during pre-independent period there were Muslim Politics under the leadership of Mohammad Ali Jinnah but post-independent period witnessed for region specific politics. For example, politics of Muslims in Andhra Pradesh is different from neighbouring states. Similarly, politics in Uttar Pradesh is different from politics of Muslims in West Bengal. There is nothing called all India Muslim Politics at present.

Further, he says that there is no all India Muslim Communalism but there is all India Hindu communalism. Ideology of Hindutva, Sangh Parivar and its organizational set up are promoting this trend. In the wake of Sachchar Committee Report, all these realities came into lime light. He questioned that why Muslims are under-represented in employment and political Institutions. He pointed out in this connection, education and skill development is very low among the Muslims.  He also pointed out about absence of infrastructural development (viz. roads, plumbing, roofed house, schools and medical facilities) in Muslim dominated 90 districts lead to further exclusion of the community.  It is because of Indian democracy, it is possible to have Sachchar Committee Report whereas in other countries (like Pakistan and China) it would not be possible.

Government of India assigned ICSSR to carry out a study in 90 Muslim population highly concentrated districts all over India to find out the plight of poverty and other problems. He said that ICSSR has carried out it and submitted reports of 90 districts to the government.

It is important to focus on politics of citizenship. Exclusion of Muslims is very dramatic. They are under-represented in every aspect. It is all deliberate one in this country. Muslims are butchered, massacred across several states. Muslim have been marginalized and even made landless in West Bengal. As a Marxist he is also critical of state in this regard. Finally, in order to understand and addressing these pertinent issues centres like CSSEIP should play prominent role to address the issues of exclusion of Muslims and work out modality for their inclusion.

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Who represents India Muslims

Submitted by SKS Mumbai (not verified) on 16 March 2010 - 7:12am.

'The Indian Muslims who felt that they will never ever get "justice in a Hindu dominated India" sought and got Pakistan in 1947.All such Indian Muslims shifted to Pakistan after creation of Pakistan'

First sentence is correct, not the second one. Because the fact is that Muslim league won 96% seats in 1946 elections, where league's only agenda was India's partition. Muslims of UP and Bihar were the strongest supporters of Pakistan. Certainly the Muslims left in India after partition, do not reflect the same 96% commitment.

Yes 1946 elections weren't based on Universal sufferage, but there is a thing called sampling. If 1937 results can be cited as conclusive evidence of Hindu-Muslim unity, then 1946 results are an equally emphatic evidence for the reverse, because sufferage rules were same both the time.

So yes, It is clear that India is not a Hindu country (if by Hindu we mean followers of Hinduism) and was not even intended to be so. Muslims have as much right to live, to seek and work for a better future and to claim all that the Indian constitution promises to its citizens, as any other Indian. But for that there isn't any need to deny historical facts.

Please remeber, one of main reasons behind India's partition was the demand for religious quotas in parliament and Jinnah's insistence that only Muslims can represent Muslsims and demand for religion based quotas in parliament. Prof. Javeed Alam's assertion that 'during pre-independent period there were Muslim Politics under the leadership of Mohammad Ali Jinnah but post-independent period witnessed for region specific politics. -- --- --- --- --- ------- ----There is nothing called all India Muslim Politics at present', is a vindication of Mr Jinnah's ideology. It is for Muslism to decide, whether they agree with Prof Javeed and Mr Jinnah.

It must be understood by all that, Muslims are free to seek reservations by following the methods permitted under the constituion of India, but they would do better, if they argued on the basis of their current socio-economic conditions rather than claiming a sinister Hindu plot against them. They can get many Hindus to support their cause, if they refuse to be led by those self-seeking leaders and intellectuals who have used and abused them for last 60 years in the name of fighting Hindu Tyranny. It isn't as if Muslims were not given the benefit of Reservation, a substantial percentage of socio-economically backward Muslims are even now elligible for reservation in most of the states, under OBC category.)

Are Grapes SOUR for A.K. Singh ???

Submitted by An Indian (not verified) on 16 March 2010 - 3:10am.

Reading various comments by imposter "Anonymous" a.k.a. "AK Singh" and others, it appears GRAPES are SOUR - especially after FAILURE of "Separate Khalistan" movement.

Readers on this platform need to comprehend AND think in "Aeykant" (seclusion), there was COLD-WAR between west and U.S.S.R. for more than four decades. At-last the WEST succeeded in BREAKING U.S.S.R. hegemony into nine "break-away" republics and six nations were formed from "break-away" former Yugoslavia. Now the WEST is pondering on how to handle / control these "breakaway" Muslim Republics NUCLEAR and OIL power - a gift in disguise from Ooperwaala !!!

It is noteworthy, Planner of planners is Ooperwaala - who plans for betterment of His Creation, based on His wisdom. Majority of "break-away" nations are ".......STANS" with "nuclear warheads" and are in Muslim nation control. Nobody knew until breakaway REPUBLICS (States) came into existence, due to IRON-WALL of Russia that Muslim Religion and Identity existed!!! It's a LITTLE thing to PONDER for WISE READERS - especially for "Anonymous" / "A.K. Singh" to ponder, before commenting on Muslims in India.

Total Muslim population in those breakaway Russian republics is circa 70 - 80 million; compared to Muslim population in India which is at-least double that figure. And remember, these are indigeneous inhabitants of Indian sub-continent, and more than that of break-away Pakistan OR Bangladesh.

Readers, if your have audio / video reading software on your computers, watch this:

http://www.youtube.com/watch?v=pISMGSw-DMA

It's an 8 minute video, but watch / hear it after fourth-minute and afterwards.

Lastly, those commenting against Indian Muslims - with support or instigation from INTERESTED POLITICIANS need to remember above, before challenging their existence. Thank you for your understanding.

An Indian

P.S.:
------
The best thing for all Indians across the board, is to live in peaceful co-existence, giving everyone EQUAL RIGHTS, without BIAS, giving everyone EQUAL JUSTICE, without PREJUDICE, giving everyone EQUAL SECURITY, without Preference. Thank you.

Breakaway Russian Republics is a good example to learn for India, which is meddling in affairs of Afghanistan and Pakistan. The LONE SUPERPOWER will leave the region after "mission accomplished"; leaving countries in region to deal with consequences, for decades.

Prof. Javeed Alam probably

Submitted by Tamizhan (not verified) on 15 March 2010 - 9:33am.

Prof. Javeed Alam probably ignored the status of Muslims in Tamil Nadu and Kerala. In Tamil Nadu Muslims are a very well developed community and are highly over represented in business just like the Chettiyars and Nadars. And in education we just don't have our ex-president Abdul Kalam but thousands of others who have taken to higher education especially in the last 25 years and excelled. For one who pulls oneself up by his own efforts the sky is the limit and there is no time to play the victim and Muslims in Tamil Nadu are proving that. Prof. Javeed Alam, there is a lesson there for the Muslims in the other states of India. I invite them to come and study in the colleges of Tamil Nadu and excel.

1. Muslims rejected western

Submitted by Anonymous (not verified) on 14 March 2010 - 10:02pm.

1. Muslims rejected western education in the 19th Century?

Sir Syed Ahmed Khan pioneered modern education for the Muslim community in India by founding the Muhammedan Anglo-Oriental College, which later developed into the Aligarh Muslim University. His work gave rise to a new generation of Muslim intellectuals and politicians who composed the Aligarh movement

Through the 1850s, Syed Ahmed Khan began developing a strong passion for education. While pursuing studies of different subjects including European [jurisprudence], Sir Syed began to realise the advantages of Western-style education, which was being offered at newly-established colleges across India.

The words "Muslim Rejection" are a a bold and unjustified comment. I will not even begin to mention the significant contributions Muslim scholars and academics have made to secular sciences and studies throughout history. Aligarh graduates are a prime counter to your 19th century comment.

"Muslims"?

Submitted by Anonymous (not verified) on 14 March 2010 - 1:37pm.

Point 1:

To some of the comments which mention that Muslims collectively wanted, carved out, and took Pakistan; please re-read history.

Maulana Abul Kalam Azad was one of the most prominent Muslim leaders to support Hindu-Muslim unity, opposing the partition of India on communal lines. Following India's independence, he became the first Minister of Education in the Indian government.

Not all Muslims collectively wanted the formation of Pakistan. There were significant vested political interests by Muslims in wanting Pakistan and significant extremist religious interests by Hindus who wanted Muslims out of what they considered India.

What of the Muslims AND Hindus who had been and felt they could continue to live in secular harmony and perhaps hoped to not be overwhelmed by corrupt ideologies breaking the country on communal lines?

Point 2:

So one comment mentioned that those Muslims who were not of a decision making age when this happened, if they feel injustice in India, can and should leave.

First, there is a significant amount of naivety and disregard to reports of numerous international human rights organizations that not only Muslims, but numerous other minorities also, are victims of grave injustices and human rights violations. India which is aspiring to be a "first world country" cannot ensure true and proper justice to its citizens, as long as they are here and are identified as citizens by the constitution, but rather throws its hands up and says oh well we cannot ensure justice so please leave? Quite ridiculous.

Point 3:

To ask a group of people to leave, especially based off of the theory of partition, means to say that we have accepted India is and only should be a Upper Caste Hindu country, disregarding the numerous Indian Muslims who have historically contributed to the development of the region. Then we can start throwing the Christians, Dalits, Sikhs, and everyone else who is unhappy....and accept that secularism in India is a farce.

Point 4:

Muslims rejecting education? I am not even going to attempt to answer such a ridiculous comment. Go and search yourself in a search engine, yes in the age of technology such ridiculous lies cannot just be said but easily typed up and checked by the common man, and type Muslim contributions to civilization. Oh but 19th century you say, taking a opinionated time sample really a great approach.

Go and type that too in a search engine, the numerous Muslim educational NGO's which exist today promoting and striving towards the educational development in some of the most poor and rural areas in the country. WHY? BECAUSE MUSLIMS HAVE BEEN EXCLUDED HISTORICALLY BY THE GOVERNMENT.

Its for muslims not getting justice in Hindu majority India

Submitted by AK SINGH (not verified) on 15 March 2010 - 6:57am.

Never stated that India is HINDU COUNTRY NOR that many MUSLIMS did not participate in FREEDOM struggle. The fact that India has the second highest population of Muslims in the world and that India has people of every religious group living together- Hindus, Muslims, Christians, Sikh, Jain, Buddhist, Jew, Parsee etc etc- is cause foe happiness for all Indian.

All that has been stated is that the concept of MINORITY must go. INDIANS CAN NOT BE MINORITY IN INDIA. Are the Parsees who are just 69000 people demanding reservation or claiming that they are minority??

TCN can abstain from allowing comments which are not in agreement with MUSLIM ideas but it will just reduce every topic into a one sided discussion.
Point 1. Yes many Muslims did NOT want Pakistan and they are happy to be in India. So they do not form the "minority amongst Muslims" who feel oppressed by MAJORITY HINDUS after 63 years of Independence and need to go to Pakistan.

Point 2 Forget about international agencies. What has been stated is about the feelings of "individual MUSLIM" who was not even born in 1947 and are staying in India because their parents opted to stay back in India rather than go to Pakistan. Such MUSLIMS who are UNHAPPY in Hindu majority India and feel that they are not getting justice in India is most welcome to go to Pakistan.

Point 3- Unhappiness "alone" is not the point- it is "unhappiness and feeling of injustice from the Hindu majority". This is felt mostly by Muslims and it is only. More importantly, Muslims who have a choice as Pakistan was created for Indian Muslims who felt that they will not get justice in Hindu Majority India.

Point 4. Even if 100% Indian Muslims are POOR it would be just 16 Crore POOR INDIANS. But if 20% Hindus are poor it would be 17 Crore of the 85 Crore INDIANS who would be POOR. statistically 100% to 20% may sound disparity but there are more HINDU POOR than MUSLIM POOR in India. Muslims must shed "minority mentality" as cause of their poverty.

BUT ANY MUSLIM WHO FEEL THAT HE WILL NOT GET JUSTICE IN HINDU MAJORITY INDIA MUST GO TO PAKISTAN.

Have a choice to decide again

Submitted by AK SINGH (not verified) on 14 March 2010 - 8:39am.

All Indian Muslims who feel that they are not getting justice in India must accept following facts and decide again.

1-- The Indian Muslims who felt that they will never ever get "justice in a Hindu dominated India" sought and got Pakistan in 1947.All such Indian Muslims shifted to Pakistan after creation of Pakistan.

2-- All Indian Muslims who stayed back in India in 1947 were those who were happy to be in a secular India. However these Muslims who took the decision to stay back in India in 1947 would be about 80-83 years old as "independent decision" could have been taken only by someone at least 18 years old in 1947 who by 2010 would be 81 years old.

3-- Now that a minority of Muslims, mostly of the younger generation who were not even born in 1947, again started feeling that Indian Muslims are not getting justice in India, these Muslims must take an "independent decision on their own" and migrate to Pakistan. The Muslims who are less than 63 years old were not born in 1947 and so have no reason to be bound by their "parents decision" to live in India.

4-- Pakistan must be to Indian Muslims as Israel is to world JEWS. Any Indian Muslim who feels that he is NOT likely to get justice in "Hindu dominated India" should be allowed to migrate to Pakistan and become citizen of Pakistan. Pakistan was created as a refuge for Muslims who feared living in a Hindu dominated India and must remain so indefinitely for every Indian Muslims.

mr ak singh and all rss

Submitted by suresh (not verified) on 15 March 2010 - 1:25am.

mr ak singh and all rss goons,you all are aryans who came from iraq. pls leave india as early as possible. you are outsiders so you dont have any right to decide about india.so plz leave before we throw you out.
after you there will be no problem in india.

mr ak is anti rss.

Submitted by AK SINGH (not verified) on 15 March 2010 - 4:04pm.

mr ak singh is anti-RSS as he believes that creation of pakistan in 1947 was the best thing happened to india in the last 1000 years unlike RSS who are broken hearted for "akhandh bharath"- stretching from afghanistan to myanmar. indian muslims who strongly feel that they are "not getting justice because of hindu domination of india" must go to pakistan- ONLY THOSE MUSLIMS WHO EXCLUSIVELY FEEL THAT HINDU DOMINATED INDIA WILL NEVER GIVE THEM JUSTICE need to go to pakistan because pakistan has been created for such indian muslims- all others are welcome in india- more the merrier- dravidians, aryans, hindus, budhhist, jains, jews, christians, parsees, muslims, sikhs and any other religion yet to be formed.

Muslims do not require advice from AK Singh

Submitted by Hamza Hameed (not verified) on 14 March 2010 - 10:34am.

AK Singh,

We will take our decision we don't need your advice.

India is a SECULAR DEMOCRATIC REPUBLIC. We won't allow India to become a Hindu Taliban state.

Indian Muslims have no connection with Pakistan but we don't need your certificate for that.

Our freedom fighters fought for a secular country. Hindus and Muslims stood together against British to win the freedom. India had several great Muslim leaders who fought for this country and opposed partition. The vision of our freedom fighters are reflected when we declared India as a SECULAR DEMOCRATIC REPUBLIC.

As long as India consists those people who respect our freedom fighters India will remain as SECULAR DEMOCRATIC REPUBLIC.

Those who don't like to live in Secular India can apply citizenship in Pakistan or NEPAL.

Muslims took pakistan from

Submitted by Chandra (not verified) on 14 March 2010 - 1:47am.

Muslims took pakistan from us. India is for the Hindus. Always is and always will be. Muslims came and curved out India into pieces. Muslims are always causing problems where ever they are. There are hardly any Hindus allowed to live in Pakistan, which they took from us. Why are there so many muslims living in India? Didn't we give you people land to live on, where we are not even allowed to live becaue of the muslims wouldn't let us. The muslims would convert us or kill us in Pak. Don't complain about us, just leave. Go to Pak!!!! We are letting you stay there for a while, until we decide to take it back. We are the Hindus. And all of India belong to us, not to you.

India V pakistan

Submitted by MI (not verified) on 14 March 2010 - 4:25pm.

I take exception to Chandra's comment. India is not Hindus private property and neither Pakistan for Muslim's. It is a question of who is ruling and who is more powerful.

Struggle for Independece was fought by Muslims standing in front and every one including Hindus are enjoying the freedom. Regarding, seperation it was a political decision by few individuals and does not apply to all muslims in general. If it would have been compulsory then entire country should have been divided in 50:50 ratio between Hindus and Muslims. Why only a small part was created?

Muslims have trusted Hindus (rulers) all these years but end result is selfishness without any benefit to Muslim community. Very soon, Muslims will have to play a dominant role in Indian politics and that day is not far!!

Chandra we will make you

Submitted by Anonymous (not verified) on 14 March 2010 - 10:18am.

Chandra we will make you accept Islam and we will make you Muslim. We will convert all Hindu into Muslim. Hence India will belong to Muslim.

Jai Hind.

India belongs to all Indians

Submitted by Hamza Hameed (not verified) on 14 March 2010 - 9:24am.

Twocircle.net message board is for positive discussions. All non-muslims are welcome except those brainwashed from RSS libraries; because it's a waste of time responding to their provocative statements. These cowards can only sit in the RSS office and write provocative statements, if they speak the same in front of Muslims they won't go home in good shape.

Please note the fact that vast majority of Indian Muslims are against terrorism whether by Hindus or Muslims. We have no problems with our Hindu brothers our problems are with the narrow minded RSS loyalists. They want to brand all Muslims as terrorists or anti-nationals to raise anti-Muslim feelings among ordinary people and take the political advantage. They deliberately accuse the whole Muslim community for the misdeeds of few misguided Muslims at the same time they encourage and appreciate the terrorist activities of fanatic organizations like BD/RSS/AB/VHP etc. etc. They don't like people to know the truth behind Parbhani blasts, Jalna blasts, Jama Masjid blasts, Mecca Masjid blast, Ajmer blasts, Modasa blast, Malegaon blast, Goa blast and those numerous riots organized by RSS in the past in several cities like Moradabad, Meerut, Kanpur, Bhiwandi, Aurangabad, Ahmadabad, Surat, Ajmer, Murshidabad, Aligarh, Agra, Bhagalpur, etc.

For the information of those who want Muslims to get out of India; please note

Our freedom fighters fought for a secular country. Those who sacrificed their life for freedom struggle of India such as Bhagat Singh,Chandarsekhar Azad,Tatya Tope, Zhansi Ki Rani, Mahatma Gandhi, Subhash Chandra Bose, etc. none of these leaders had grudge or complaints against Muslims. Hindus and Muslims stood together against British to win the freedom. India had great Muslim leaders who fought for this country and who were against the division of the country. The vision of our freedom fighters are reflected when we declared India as a SECULAR DEMOCRATIC REPUBLIC.

You RSS cowards were no were in the picture of freedom struggle that is why you fanatics could not make India a Hindu Taliban nation at that time. Why India was not made Hindu Raj. If you have common sense think about it. Now after winning the freedom you people getting out of RSS office asking for Hinduraj ?
No way as long as India consists those Muslims who opted to stay in the SECULAR DEMOCRATIC REPUBLIC INDIA; you are not going to win. Even the sensible Hindus wont allow that.
India belongs to all Indians. INDIA IS NOT PRIVATE PROPERTY OF SANGH PARIVAR.

Jai Hind

good topic

Submitted by bharati (not verified) on 14 March 2010 - 12:47am.

but a little bit of self-criticism would be a good idea. The muslim rejection of western education in 19th century is well known and should be discussed.

There seems to be no problem collecting thousands of muslims for danish cartoons/salman rushdie/middle-east politics but it is somehow very hard for the community to start schools and educate its own young people.

How come these topics werent included in the talk?

http://www.twocircles.net/2010mar13/muslim_exclusion_india_deliberate_prof_javeed_alam.html

Democracy at the Crossroads

Edited by Harihar Bhattacharyya, Partha Sarkar, Angshuman Kar

  • Price: £80.00 £72.00
  • Binding/Format: Hardback
  • ISBN: 978-0-415-55357-5
  • Publish Date: 7th December 2009
  • Imprint: Routledge
  • Pages: 194 pages

Series: Routledge Advances in South Asian Studies

Social exclusion and inclusion remain issues of fundamental importance to democracy. Both exclusion and inclusion relate to the access to participation in the public realm, public goods and services for certain groups of people who are minorities, marginalized and deprived. Democratization has led to the inclusion of the previously excluded in the political process. While the problems of exclusion remain even in advanced Western countries in respect of the minorities of sorts, and the underprivileged, the problem of deep-rooted social and cultural exclusions is acute in post-colonial countries, including India. This book analyses social exclusions in India, which remain the most solid challenges to Indian democracy and development. Communal clashes, ethnic riots, political secessionist movements and extremist violence take place almost routinely, and are the outward manifestations of the entrenched culture of social exclusion in India. With its interdisciplinary approach, the book looks at the multidimensional problems of social exclusion and inclusion, providing a critical, comprehensive analysis of the problem and of potential solutions. The authors are experts in the fields of historical sociology, anthropology, political theory, social philosophy, economics and indigenous vernacular literature. Overall, the book offers an innovative theoretical perspective of the long-term issues facing contemporary Indian democracy.

Contents

Introduction - Harihar Bhattacharyya, Partha Sarkar, and Angshuman Kar 1. Some Theoretical Issues Concerning Social Exclusion and Inclusion in India - Sobhanlal Datta Gupta 2. Social Exclusion and the Strategy of Empowerment - T. K. Oommen 3. Identity Politics and Social Exclusion in India's North-East: The Case for Redistributive Justice - N. K. Das 4. Inclusion in Nationhood: Bhudev Mukhopadhyay's Concept of Jatiyabhav - Harihar Bhattacharyya 5. Rabindra Nath Tagore's Concept of Social Exclusion and Inclusion in India: A Nation without Nationalism - Jyotirmay Bhattacharyya 6. Identity and Social Exclusion-Inclusion: A Muslim Perspective - Asghar Ali Engineer 7. Inclusive and Exclusive Development in India in the Post-Reform Era - Provat Kuri 8. Social Exclusion in India: Evidences from the Wage Labour Market - Rajarshi Majumdar 9. Polavaram Dam Project: A Case Study of Displacement of Marginalized People - Sudipti Banerjea 10. Purity as Exclusion, Caste as Division: The Ongoing Battle for Equality - Jasbir Jain 11. Narrating Gender and Power: Literary and Cultural Texts and Contexts - Sanjukta Das Gupta 12. The Fire and the Rain: A Study in Myths of Power - Anima Biswas 13. Conclusion: Democracy at the Crossroads - Harihar Bhattacharyya, Partha Sarkar, and Angshuman Kar List of Contributors

Author Bio

Harihar Bhattacharyya is Professor of Political Science, University of Burdwan, India. He has been awarded international fellowships and visiting assignments by the universities of Heidelberg, London, Hull and Fribourg. His publications include India as a Multicultural Federation: Asian Values, Democracy and Decentralization.

Partha Sarkar is Senior Lecturer in the Department of Business Administration at the University of Burdwan, India.

Angshuman Kar is Reader and Head of the Department of English, University of Burdwan, India. He edited Critical Perspectives on Contemporary Literatures.


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