What is Land Pooling?

Land pooling is an urban development strategy where small land parcels are consolidated and redeveloped with modern infrastructure by a government agency or a designated authority. A portion of the developed land is returned to the original owners after deducting infrastructure costs. It is a costeffective alternative to traditional land acquisition, fostering sustainable urban growth while ensuring landowners retain ownership of a portion of their land.

Definition and Mechanism

Land pooling consolidates fragmented plots into a larger, unified area. The government or private developers redevelop these plots with necessary infrastructure, such as roads, sewage systems, and public amenities. Postredevelopment, a portion of the improved land is returned to the original owners. This process enhances land value and urbanizes areas with minimal displacement, aligning with guidelines set by the Ministry of Urban Development.

Advantages of Land Pooling

For Landowners:

1. Increased Land Value: Landowners retain plots with significantly higher postredevelopment value, as noted by the National Institute of Urban Affairs.
2. Access to Infrastructure: Improved amenities like schools, hospitals, and roads elevate living standards.
3. Regularization of Land: Irregular parcels are transformed into wellplanned plots suitable for development.
4. Retention of Ownership: Unlike traditional acquisition, landowners remain stakeholders, fostering a sense of belonging.

For the Government:

1. CostEffective: No large initial expenditure for land acquisition.
2. Reduced Resistance: Partnering with landowners mitigates opposition, streamlining the process.
3. Expedited Process: The inclusion of social stakeholders accelerates traditional processes while reducing conflicts.
4. Increased Tax Revenue: Higher property values lead to an expanded tax base.
5. PublicPrivate Collaboration: Enhances partnerships between the government and private developers for balanced growth.

Challenges of Land Pooling

1. Consent Issues: While land pooling is participatory, consent from all landowners is sometimes contentious, with allegations of coercion (The Hindu).
2. Insufficient Compensation: Tenant farmers and agricultural workers often face inadequate resettlement and compensation options.
3. Legal Complexities: Varying state regulations and compliance with acts like the RFCTLARR Act, 2013, complicate implementation.
4. Reestablishing Agriculture: Returning landowners face high costs and challenges in restarting agriculture on fragmented plots.

Conclusion

Land pooling represents a transformative solution for urbanization, merging costeffective strategies with inclusive development. While it offers substantial benefits for landowners and the government, addressing challenges like consent, compensation, and legal hurdles is critical for its success. With collaborative efforts, land pooling can drive sustainable urban development in India.

Centrally Sponsored Schemes (CSS) are schemes that are implemented by state governments of India but are largely funded by the Central Government with a defined State Government share. Some examples of such schemes are Mahatma Gandhi National Rural Employment Guarantee Act, Pradhan Mantri Gram Sadak Yojana etc. Subject matter of such scheme is generally fond in the State List. It is done to ensure realization of national objectives and uniformity in implementation across the nation. The CSSs are implemented to achieve social objectives like poverty reduction, improving health services, raising food production etc.

CSS always been a point of contention between the Centre and States:

• The criticism voiced by the States on the proliferation in the number of Centrally Sponsored Schemes:
  • In 1968, the National Development Council Committee recommended a cap on the value of the Centrally Sponsored Schemes as 1/6th of the Central Plan assistance to States. However, the Central Ministries continued to introduce new schemes and the financial limit came to be exceeded. The number of CSS increased from 45 in 1969 to 190 at the end of the Fifth Five Year Plan.
  • However, the Central Ministries continued to introduce new schemes and the financial limit came to be exceeded.
  • To resolve various issues raised by state concerning CSS, NDC constituted an Expert Group under the Chairmanship of K. Ramamurty. However, the group in its report said that the criteria to continue with existing CSS/start new CSS as were too broad and that fulfilment of an important national objective as one of the criteria was essential.
  • Later, Narshimha rao committe laid down criteria for the formation of a new CSS;
    • The fulfillment of an important national objective e.g. poverty alleviation, education etc.
    • The programme has a regional or inter-State character
    • The programme or scheme should be in the nature of a pace setter or should relate to demonstration, survey or research.
  • This committee suggested that schemes other than those having high national importance could be considered for transfer to the State Plans.
• Previously, NDC observed that the better off States were benefiting more through the CSS as they had better resource matching and implementation capabilities compared to poor States. Thus, it can further widen the divide between rich and poorer states. And poorer states are left dissatisfied.
• Generally, States desire that the CSS along with funds should be transferred to the States particularly relating to those sectors which come within the purview of the State List. However, there exists divergence of opinion on the issue of transfer of CSS. This divergence was not only among the States but also between the States on the one hand and the Central Ministries/Departments on the other:
  • Andhra Pradesh suggested abolition of all CSS with transfer of funds to the States in true spirit of cooperative federalism.
  • Arunachal Pradesh proposed that Union Government should finance 100% CSS.
  • other North Eastern States suggested retention of few important schemes as CSS and others to be transferred to States with full funding.
• Delivery of goods;
  • Under the Centrally Sponsored Schemes Central Government of India prepare the guidelines and sanction the fund for the scheme (e.g. PM Awas yojna etc.) without taking responsibility to deliver the goods without corruption.
  • If any Indian lodge a grievance to the concerned Ministry or department of Govt. of India through Centralised Public Grievance Redress and Monitoring System (CPGRAMS), the related Ministry or department by saying “the subject do not fall under the purview of this Ministry”, closed the case by forwarding it to the concerned state govt.
  • According to a Press Trust of India news in 2014, on an average, around 42,000 grievances are received every month on Centralised Public Grievance Redress and Monitoring System (CPGRAMS) and in the Prime Minister’s Office.
• It is seen by many as against to the idea of federalism. As center are interfering with the subjects listed under the state list.
• The union government had amended the terms of reference (ToR) issued to the Fifteenth Finance Commission, asking it to examine a separate mechanism for funding of defence and internal security.
  • The amendment was based on the rationale that if Union government is required to contribute through Centrally Sponsored Scheme (CSS), on the matters of the State List, then the states too should contribute to items like defence in the Union List.
• According to the former Planning Commission’s 2001 B K Chaturvedi report, restructuring in CSS should be done, to resolve some of the structural problems:
  • CSS has multiple objectives and service delivery standards are not clearly defined.
  • In principle, there should be consultations with states in designing the schemes, but this is hardly done.
  • “The one-size-fits-all” approach cannot succeed in a large and diverse country like India.
• Such schemes promoted uniformity but generally ignored the diversity between the states which required flexibility in schemes.
• The CSSs have been criticized on the ground of poor ownership of the States, inadequate monitoring and evaluation of programmes. In view of the fact that the Central Ministries have a large number of CSS, there is generally very little concurrent evaluation.
  • To ensure meaningful and effective evaluations, the funds of the CSS should be monitored by independent organizations which are not part of the implementation process.

After restructuring as per suggestions of the 14th Finance Commission, there are 29 centrally sponsored schemes. These are broadly divided into two categories – core of the core schemes and core schemes. Six centrally sponsored schemes fall in the category of core of the core schemes, or the most crucial schemes for the government of India.

• There are 6 core of the core schemes:
  • National Social Assistance Programme
  • MGNREGA or the Mahatma Gandhi National Rural Employment Guarantee Act
  • Umbrella Scheme for Development of Scheduled Castes
  • Umbrella Programme for Development of Scheduled Tribes
  • Umbrella Scheme for Development of Minorities
  • Umbrella Scheme for Development of Other Vulnerable Groups
• 23 others are Core schemes: e.g.
  • Green Revolution
  • White Revolution
  • Blue Revolution
  • Pradhan Mantri Krishi Sinchai Yojna (PMKSY)
  • Pradhan Mantri Gram Sadak Yojna
  • Pradhan Mantri Awas Yojna (PMAY)
  • Rural Drinking Water Mission
  • Swachch Bharat Mission (SBM)
  • National Health Mission

1. Introduction

– Introduce the concept of planned development as a critical strategy for India’s economic recovery post-independence.

– Highlight the importance of the Second Five-Year Plan in accelerating economic reforms and establishing a foundation for industrialization.

1. Background of Planned Development

– Explain India’s post-independence challenges, such as poverty, unemployment, and underdeveloped infrastructure.

– Discuss the launch of the First Five-Year Plan (1951-56) to address basic needs and the transition to the Second Plan to focus on long-term growth.

1. Overview of the Second Five-Year Plan

– Timeline: 1956-1961.

– Based on the Nehru-Mahalanobis model, prioritizing capital goods and heavy industries to stimulate economic self-reliance.

– Objectives: Industrial expansion, infrastructure development, and balanced regional growth.

1. Key Contributions of the Second Five-Year Plan

– Industrialization: Focus on heavy industries and capital goods production.

– Fact: Industrial output grew significantly, with large-scale industrial projects initiated (Source: Economic Survey of India, 2018).

– Infrastructure Development: Establishment of IITs and scientific institutions to foster human capital.

– Fact: These institutions became key contributors to India’s development (Source: Planning Commission Reports).

– Investment Rates: Increased savings and investments.

– Fact: Investment rates grew from 12% to 19% of GDP (Source: Reserve Bank of India).

– Agricultural Advancements: Land reforms and the Community Development Programme improved agricultural productivity.

– Fact: Food grain production rose by 23% during the plan (Source: Agricultural Statistics Reports).

– Public Sector Role: Dominance in critical industries, ensuring self-reliance.

– Fact: Public sector contribution to GDP surged, shaping economic policies (Source: Planning Commission).

1. Criticism and Challenges

– Criticisms: Overemphasis on industrialization at the expense of agriculture.

– Fact: Critics highlighted the neglect of rural areas and unemployment issues (Source: Economic Analyses).

– Challenges: Wealth concentration and regional disparities persisted despite industrial growth.

1. Conclusion

– Summarize the Second Five-Year Plan’s significance as a pivotal milestone in India’s planned development.

– Reflect on its enduring impact on the Indian economy, particularly in industrial and infrastructure growth.

Relevant Facts

1. Economic Growth: The Second Five-Year Plan resulted in a significant increase in industrial output, particularly in capital goods (Source: Economic Survey of India, 2018).
2. Infrastructure Development: Established institutions like IITs, fostering a skilled workforce and scientific research (Source: Planning Commission Reports).
3. Investment Rates: The rate of investment increased from 12% to 19% of GDP during 1956-1961 (Source: Reserve Bank of India).
4. Agricultural Productivity: Food grain production increased by 23% through reforms and development initiatives (Source: Agricultural Statistics Reports).
5. Public Sector Growth: Enhanced GDP contribution from the public sector, solidifying its role in capital goods industries (Source: Planning Commission).

Indian Railways still uses diesel locomotives due to incomplete network electrification, especially in remote or difficult terrains. Diesel engines provide flexibility on non-electrified routes and act as backups where power supply is unreliable. Full electrification is costly and challenging in some areas, so a phased approach is in place. While diesel use continues, Indian Railways aims for net-zero carbon emissions by 2030 through gradual electrification and renewable energy adoption.

Capital Account Convertibility (CAC) refers to the ability of a country to allow unrestricted capital inflows and outflows, enabling the free exchange of local currency into foreign currency for capital transactions. CAC is significant for India’s economy as it could increase India’s integration with global financial markets, potentially boosting investment flows and economic growth.

Understanding Capital Account Convertibility

CAC allows the unrestricted conversion of local currency into foreign currency for investment purposes, enabling residents and foreign investors to move capital freely across borders. Currently, India has full convertibility in the current account but only partial convertibility in the capital account (Source: Ministry of Finance). The Tarapore Committee Reports (1997, 2006) provided a roadmap for implementing full CAC in a gradual, phased approach to avoid sudden economic disruption (Source: Reserve Bank of India).

Advantages of Full Capital Account Convertibility

1. Improved Access to International Markets: Full CAC can attract significant foreign investment, thereby supporting India’s economic growth.
2. Financial Efficiency: Increased exposure to global competition may drive innovation and reduce capital costs, benefiting Indian businesses and consumers.
3. Increased Investment Choices: With CAC, Indian residents could invest in foreign securities, potentially leading to higher financial returns and more diversified investment portfolios.
4. Hedging Investment Risks: By allowing diversification into global markets, CAC can protect the value of assets against local economic volatility.

Disadvantages of Full Capital Account Convertibility

1. Outflow of Domestic Savings: Full CAC can lead to capital flight, as seen during the 1997-98 Asian financial crisis, where countries like Thailand experienced significant outflows, highlighting the risks associated with speculative activities (Source: World Bank).
2. Tax Evasion: CAC could weaken the government’s ability to monitor and tax domestic financial activities, posing challenges for revenue collection.
3. Cost-Push Inflation: The fluctuating exchange rate under full CAC may increase import prices, leading to inflationary pressures.
4. Economic Disruptions: Currency depreciation due to unregulated capital flows could negatively impact trade balances and capital flows, causing economic instability.

Preconditions for Full Convertibility

The Tarapore Committee outlined essential economic conditions to be met before moving to full CAC to ensure stability:

– Fiscal Deficit: Should be below 3.5% of GDP.

– Inflation Rate: Needs to be maintained between 3-5% over a three-year period.

– Cash Reserve Ratio (CRR): Effective CRR should be maintained at 3%.

– Non-Performing Assets (NPAs): Gross NPAs should be capped at 5% (Source: Tarapore Committee).

Meeting these preconditions is crucial to mitigate the risks associated with full CAC and ensure that India’s economy is resilient enough to handle unrestricted capital flows.

Conclusion

Understanding CAC is critical for assessing its impact on India’s economic stability and financial landscape. While full capital account convertibility offers opportunities for enhanced growth and investment diversification, India must carefully balance these benefits against potential economic risks, such as capital flight and inflation. A gradual and cautious approach, as recommended by the Tarapore Committee, could allow India to reap the benefits of CAC while maintaining economic stability.