12 Finance Commission of India

 

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

 

Recommendations of the Twelfth Finance Commission

Restructuring public finances

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

Sharing of Union tax revenues

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

Local bodies

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

Calamity relief

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

Grants-in-aid to States

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

Fiscal reform facility

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

Debt relief and corrective measures

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

Others

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

Source:Ministry of Finance

Export Import (EXIM) Policy  of India  

Export Import Policy or  Exim Policy or Foreign Trade Policy is a set of guidelines and instructions related to the import and export of goods.

Various Objectives of Exim Policy are :-

  • To facilitate sustained growth in exports from India and import in India.
  • To stimulate sustained economic growth by providing access to essential raw materials, intermediates, components, consumables and capital goods scheme required for augmenting production and providing services.
  • To enhance the technological strength and efficiency of Industry Agriculture industry and services, thereby improving their competitive strength while generating new employment opportunities, and to encourage the attainment of internationally accepted standards of quality.
  • To provide clients with high-quality goods and services at globally competitive rates. Canalization is an important feature of Exim Policy under which certain goods can be imported only by designated agencies. For an example, an item like gold, in bulk, can be imported only by specified banks like SBI and some foreign banks or designated agencies.

The new five year Foreign Trade Policy, 2015-2020 provides a framework for increasing exports of goods and services as well as generation of employment and increasing value addition in the country, in keeping with the “Make in India” vision of our Hon’blc Prime Minister. The focus of the government is to support both the manufacturing and services sectors, with a special emphasis on improving the ‘ease of doing business’.

Merchandise Exports from India Scheme (MEIS):-To offset infrastructural inefficiencies and the associated costs of exporting products produced in India giving special emphasis on those which are of India’s export interest and have the capability to generate employment and enhance India’s competitiveness in the world market.With the aim in making India’s products more competitive in the global markets, the scheme provides incentive in the form of duty credit scrip to the exporter to compensate for his loss on payment of duties.

Service Exports from India Scheme (SEIS) :-Service Provider of eligible services shall be entitled to Duty Credit Scrips at notified rates.

Export Promotion Capital Goods (EPCG) scheme allows import of capital goods including spares for pre production, production and post production at zero duty.

Other Specific steps taken for the developement of international trade are:-

 

  • Trade Facilitation & Ease Of Doing Business
  • DGFT as a facilitator of exports/imports
  • Niryat Bandhu – Hand Holding Scheme for new export / import entrepreneurs
  • Online Complaint Registration and Citizen’s Charter
  • Monitoring System
  • Issue of e-IEC (Electronic-Importer Exporter Code)
  • e-BRC
  • MoU with State Governments for sharing of e-BRC data
  • Exporter Importer Profile
  • Reduction in mandatory documents required for Export and Import
  • Online Inter-ministerial consultation
  • Facility of online filing of applications
  • Facility to upload documents by Chartered Accountant / Company Secretary / Cost Accountant
  • Electronic Data Interchange (EDI)
  • Message Exchange with Community partners
    (a) Message Exchange with Customs
    (b) Message Exchange with eBiz
    (c) Message Exchange with Banks
    (d) Message Exchange with EPCs
  • Encouraging development of Third Party API
  • Forthcoming e-Governance Initiatives
  • Free passage of Export consignment
  •  No seizure of export related Stock
  • 24 X 7 Customs clearance
  • Single Window in Customs
  • Self-Assessment of Customs Duty
  • Authorised Economic Operator (AEO) Programme
  • Prior filing facility for Shipping Bills
  • Cutting down delay in filing of Export General Manifest (EGM) for duty drawback
  • Facility of Common Bond / LUT against authorizations issued under different EP Schemes
  • Exemption from Service Tax on Services received abroad
  • Export of perishable agricultural Products
  • Time Release Study (TRS)
  • Towns of Export Excellence (TEE)

Environmental Impact Assessment (EIA)

Notification on Environmental Impact Assessment (EIA) of developmental projects 1994 under the provisions of Environment (Protection) Act, 1986 making EIA  mandatory for 29 categories of developmental projects. One more item was added to the list in January, 2000. environmental impact assessment statutory for 30 activities

Environment Impact Assessment Notification of 2006 has categorized the developmental projects  in two categories, i.e., Category A and Category B

‘Category A’ projects are appraised at national level by expert appraisal committee

India has constituted the State Level Environment Impact Assessment Authority (SEIAA) and State Level Expert Appraisal Committee (SEAC)  to decentralize the environmental clearance process

The objective of EIA is to foresee and address potential environmental problems/  concerns at an early stage of project planning and design.

The EIA notification establishes four stages for obtaining Environmental Clearance.

  1. Screening
  2. Scoping and consideration of alternatives Baseline data collection
  3. Impact prediction
  4. Assessment of alternatives, delineation of mitigation measures and environmental impact statement
  5. Public hearing
  6. Environment Management Plan Decision making
  7. Monitoring the clearance conditions

Screening- It is only for Categories B

Screening Criteria are based upon:

  • Scales of investment; •       Type of development; and, •      Location of development

B1 Categories project require Environmental Impact Assessment while B2 category projects are exempted from EIA.

State Level Expert Appraisal Committee determine about project categories

Waste minimization

Waste minimization is an appropriate strategy to address the problems of industrial pollution. The objective of the scheme is to assist the small and medium scale industries in adoption of cleaner production processes.

• A scheme on adoption of clean technology and promotion and establishment of waste minimization circles in small and medium scale industries is being implemented at the initiative of Ministry of Environment & Forests.
• So far, 118 waste Minimisation Circles have been established in 41 sectors in 17 geographic locations in the country.
• A “Waste Minimization Circle (WMC)” is a small group (5 to 7 units) of entrepreneurs in the small scale sector, whose units manufacture similar products and employ the same processes voluntarily meeting periodically and regularly in the premises of each member unit, one after another, to analyze the current operations of the host unit.

E-Waste

The rapid growth of technology, upgradation of technical innovations and a high rate of obsolescence in the electronics industry have led to one of the fastest growing waste streams in the world which consist of end of life electrical and electronic equipment products. It comprises a whole range of electrical and electronic items such as refrigerators, washing machines, computers and printers, televisions, mobiles, i-pods, etc., many of which contain toxic materials. Many of the trends in consumption and production processes are unsustainable and pose serious challenge to environment and human health.

E-waste is not hazardous if it is stocked in safe storage or recycled by scientific methods or transported from one place to the other in parts or in totality in the formal sector. The e-waste can be considered hazardous if recycled by primitive methods

Major Toxins in E‐waste

• Toxins in e‐waste include polyvinyl chloride (PVC plastics), copper, lead, mercury, arsenic (in  older models), cadmium, manganese, cobalt,  gold, and iron.
• Between 1994 and 2003, disposal of PCs resulted in 718,000 tons of lead, 287 tons of  mercury, and 1,363 tons of cadmium
• Mercury, chromium, lead, and  brominated flame retardants are likely to cause the most adverse health effects in humans.

Survey was carried out by the Central Pollution Control Board (CPCB) during 2005

In India, among top ten cities; Mumbai ranks first in generating e-waste followed by Delhi, Bangalore, Chennai, Kolkata, Ahmadabad, Hyderabad, Pune, Surat and Nagpur.

Noise Pollution

 

Sound is measured in decibels (dB). An increase of about 10 dB is approximately double the increase in loudness.

A person’s hearing can be damaged if exposed to noise levels over 75 dB over a prolonged period of time.

The World Health Organization recommends that the sound level indoors should be less than 30 dB.

Ambient Noise Level Monitoring –   Noise Pollution (Control and Regulation) Rules, 2000 define ambient noise levels for various areas as follows-

  1. Industrial Area—75DB to 70Db (Day time-6am to 10pm and night time 10pm to 6am ..75 is day time and 70 is night time)
  2. Commercial Area–65 to 55
  3. Residential Area–55 to 45
  4. Silence Zone– 50  to 40
  • The Government of India on Mar 2011 launched a Real time Ambient Noise Monitoring Network.
  • Under this network, in phase- I, five Remote Noise Monitoring Terminals each have been installed in different noise zones in seven metros (Delhi, Hyderabad, Kolkata, Mumbai, Bangalore, Chennai and Lucknow).

In Phase II another 35 monitoring stations will be installed in the same seven cities.

Phase III will cover installing 90 stations in 18 other cities.

Phase-III cities are Kanpur, Pune, Surat, Ahmedabad,  Nagpur, Jaipur,  Indore,

Bhopal, Ludhiana, Guwahati, Dehradun, Thiruvananthpuram, Bhubaneswar,

Patna, Gandhinagar, Ranchi, Amritsar and Raipur.

Silence Zone is an area comprising not less than 100 metres around hospitals, educational institutions, courts, religious places or any other t area declared as such by a competent authority.

Soil Pollution

Soil Pollution is the Contamination of the soil by human and natural activities which may cause harmful effects on living beings.
This may be due to the following factors.

(i) Industrial wastes: Industries are the major causes for soil pollution Textiles, steel, paper, Cement, oil, dyeing and other industries are responsible for soil pollution. Toxic organic compounds and phenol destroy the fertility of the soil.
(ii) Biological agents – Fungi, protozoa, bacteria are important Biological agents for soil pollution. The human and animal wastes, garbage, waste water generates heavy soil pollution.
(iii) Radio active pollutants: Atomic reactor, nuclear radio active devices releases radio active pollutants. These pollutants enter the land and accumulate there by causing soil pollution.
(iv) Pesticides: Pesticides pollute the soil. There are of two types (i) chlorinated hydrocarbon insecticide (2) Organic phosphorous pesticides. Common chlorinated hydrocarbon insecticides are DDT, BHC.

Organo phosphorous insecticides are synthetic chemicals like Malathion and parathion.

DDT reduces the activity of sex hormones of male and female. The land with fungicides insecticides causes diseases to human beings.

Fertilizers: These discharge N, Na, K, S, Nitrates etc., into the soil. The nitrate causes cancer.

Polymer, Plastics & other water: These materials appear as garbage. Solid wastes and their quantities increase day by day. They pollute the atmospheres, land and also water badly.

Agricultural practices: Modern agriculture practices pollute the soil to a large extent. Today huge quantities of fertilizers, pesticides, weedicides are added to increase the crop field. Apart from these farm wastes, manure debris, soil erosion containing inorganic chemicals are causing soil pollution.
Effect of soil pollution
1.Organic wastes enter the soil pores and decompose. Pathogenic bacteria spread infection.
2.Compounds containing As, Hg, Cr, Ni, Zn and Fe are toxic to life.
3.Fluorides affect plant development
4.Water logging and salinity increase the dissolved salt content in the soil. Some plants are very sensitive to soil PH and salinity.
Thus land becomes unfit for irrigation.
Control of soil pollution
1.Treat the sewage before land disposal
2.Rotate the crop pattern to allow the soil replenish the nutrients.
3.Preserve and protect top fertile soil, control soil erosion by tree plantation.
4.Fertilizers may be applied only after estimating the soil and crop measures.
5.Production of natural fertilizers Excessive use of chemical fertilizers and insecticides should be avoided. Bio pesticides should be used instead of toxic chemical pesticides.
6.Proper hygienic condition- People should be trained regarding the sanitary habits.
7.Recycling and reuse of waster – The wastes such as paper, plastic, metals, glasses should be recycled and used.

Water Pollution

 

Addition of certain substances to the water such as organic, inorganic,

biological, radiological, heat, which degrades the quality of water so that it

becomes unfit for use.

Putrescibility is the process of decomposition of organic matter present in water by microorganisms using oxygen.

Water having DO (dissolved oxygen)  content below 8.0 mg/L may be

considered as contaminated.  Water having DO content below. 4.0 mg/L is

considered to be highly polluted.

Water pollution by organic wastes is measured in terms of Biochemical Oxygen Demand-(BOD). BOD is the amount of dissolved oxygen needed by bacteria in decomposing the organic wastes present in water.

Chemical oxygen demand (COD) is a slightly better mode used to measure pollution load in water. It is the measure of oxygen equivalent of the requirement of oxidation of total organic matter (i.e. biodegradable and non- biodegradable) present in water.

A cripling deformity called Minamata disease due to consumption of fish captured from mercury contaminated Minamata Bay.

Water contaminated with cadmium can cause itai itai disease also called ouch-ouch disease (a painful disease of bones and joints) and cancer of lungs and liver.

The compounds of lead cause anaemia, headache, loss of muscle power and bluish line around the gum

Excess nitrate in drinking water reacts with hemoglobin to form non -functional met haemoglobin, and impairs oxygen transport.  This condition  is  called methaemoglobinemia or blue baby syndrome.

Over exploitation of ground water may lead to leaching of arsenic from soil and rock sources and contaminate ground water.  Chronic exposure to arsenic causes black foot disease. It also causes diarrhoea,-peripheral neuritis, hyperkerotosis and also   lung and skin cancer.

Air Pollution

 

aggravated because of four developments:

Increasing traffic, growing cities, rapid economic development, and industrialization

contamination of air by the discharge of harmful substances

 

Major air pollutants and their sources

  1. Carbon monoxide (CO)
  • It is a colourless, odourless gas that is produced by the incomplete burning of carbon – based fuels including petrol, diesel, and wood.
  • It is also produced from the combustion of natural and synthetic products such as cigarettes.
  • It lowers the amount of oxygen that enters our blood. It can slow our reflexes and make us confused and sleepy.
  1. Carbon dioxide (CO2)

principle greenhouse gas

  1. Chloroflorocarbons (CFC)
  • gases that are released mainly fromair-conditioning systems and refrigeration.
  • When released into the air, CFCs rise to the stratosphere, where they come in contact with few other gases, which lead to a reduction of the ozone layer that protects the earth from the harmful ultraviolet rays of the sun.

 

  1. Lead

present in petrol, diesel, lead batteries, paints, hair dye products, etc.

affects children in particular. cause nervous system damage and digestive problems and, in some cases, cause cancer.

 

  1. Ozone
  • occurs naturally in the upper layers of the atmosphere.
  • at-the ground level, it is a pollutant with highly toxic effects.
  • Vehicles and industries are the major source of ground-level ozone emissions.
  • Ozone makes our eyes itch, burn, and water. It lowers our resistance to cold and pneumonia.

 

  1. Nitrogen oxide (Nox)
  • causes smog and acid rain. It is produced from burning fuels including petrol, diesel, and coal.
  • Nitrogen oxide can make children susceptible to respiratory diseases in winters.

 

  1. Suspended particulate matter (SPM)
  • consists of solids in the air in the form of smoke, dust, and vapour that can remain suspended for extended periods
  • The finer of these particles when breathed in can lodge in our lungs and cause lung damage and respiratory problems.

 

  1. Sulphur dioxide (S02)
  • a gas produced from burning coal, mainly in thermal power plants.
  • Some industrial processes, such as production of paper and smelting of metals, produce sulphur dioxide.
  • a major contributor to smog and acid rain.
  • Sulphur dioxide can lead to lung diseases

 

  1. Smog
  • a combination of the words fog and smoke. Smog is a condition of fog that had soot or smoke in it.
  • interaction of sunlight with certain chemicals in the atmosphere.
  • primary components of photochemical smog is ozone.
  • Ozone is formed through a complex reaction involving hydrocarbons, nitrogen oxides, and sunlight. It is formed when pollutants released from gasoline, diesel- powered vehicles and oil-based solvents react with heat and sunlight from biofuels, the four most serious pollutants are particulates, carbon monoxide, polycyclic organic matter, and formaldehyde

 

Pollutants

  1. i) Volatile organic compounds

The main indoor sources are perfumes, hair sprays, furniture polish, glues, air

fresheners, moth repellents, wood preservatives, and other products.

 

  1. ii) Biological pollutants

It includes pollen from plants, mite, and hair from pets, fungi, parasites, and some bacteria.

iii) Formaldehyde

Mainly from carpets, particle boards, and insulation foam. It causes irritation to the eyes and nose and allergies.

  1. iv) Radon

It is a gas that is emitted naturally by the soil. Due to modern houses having poor ventilation, it is confined inside the house and causes lung cancers.

 

Fly Ash

Ash is produced whenever combustion of solid material takes place.

Composition

  1. Aluminium silicate (in.large amounts)
  2. silicon dioxide (Si02) and
  3. Calcium oxide (Ca0).

Fly ash particles are oxide rich and consist of silica, alumina, oxides of iron, calcium, and magnesium and toxic heavy metals like lead, arsenic, cobalt, and coppers

 

Policy measures of MoEF:

  • The Ministry of Environment and Forests vide its notification in 2009, has made it mandatory to use Fly Ash based products in all construction projects, road embankment works and low lying land filling works within 100 kms radius of Thermal Power Station.
  • To use Fly Ash in mine filling activities within 50 kms radius of Thermal Power Stations.
  • Arresters: These are used to separate particulate matters from contaminated air.
  • Scrubbers: These are used to clean air for both dusts and gases by passing it through a dry or wet packing material.

Government Initiatives

(1) National Air Quality Monitoring Programme

In India, the Central Pollution Control Board (CPCB) has been executing a nationwide programme of ambient air quality monitoring known as National Air Quality Monitoring

Programme (NAMP).

The National Air Quality Monitoring Programme (NAMP) is undertaken in India

(i) to determine status and trends of ambient air quality;

(ii) to ascertain the compliance of NAAQS;

(iii) to identify non-attainment cities;

(iv) to understand the natural process of cleaning in the atmosphere; and

(v) to undertake preventive and corrective measures.

Annual average concentration of SOx levels are within the prescribed National Ambient

Air Quality Standards (NAAQS).

National Ambient Air Quality Standards (NAAQS) were notified in the year 1982, duly revised in 1994 based on health criteria and land uses .

The NAAQS have been revisited and revised in November 2009 for 12 pollutants, which include. sulphur dioxide (S02), nitrogen dioxide (NO2), particulate matter having size less than 10 micron

(PM10),particulate matter having size less than 2.5micron (PM2.5), ozone, lead, carbon monoxide (CO), arsenic, nickel, benzene, ammonia, and. Benzopyrene.

Environment Pollution: An Introduction

Environment Pollution is  defined as ‘an addition or excessive addition of certain materials to the physical environment (water, air and lands), making it less fit or unfit for life’.

Pollutants are the materials or factors, which cause adverse effect on the natural quality of any component of the environment.

Classifications

  1. According to the form in which they persist after release into the environment.
  • Primary pollutants: These persist in the form in which they are added to the environment e.g. DDT, plastic.
  • Secondary Pollutants: These are formed by interaction among the primary pollutants. For example, peroxyacetyl nitrate (PAN) is formed by the interaction of nitrogen oxides and hydrocarbons.
  1. According to their existence in nature.
  • Quantitative Pollutants: These occur in nature and become pollutant when their concentration reaches beyond a threshold level. E.g. carbon dioxide, nitrogen oxide.
  • Qualitative Pollutants: These do not occur in nature and are man-made. E.g. fungicides, herbicides, DDT etc.
  1. According to their nature of disposal.
  • Biodegradable Pollutants: Waste products, which are degraded by microbial action. E.g. sewage.
  • Non-biodegradable Pollutants: Pollutants, which are not decomposed by microbial action. E.g. plastics, glass, DDT, salts of heavy metals, radioactive substances etc
  1. According to origin
  • Natural
  • Anthropogenic