Availing Banking Services in Rural and Urban Areas of Odisha

Table 1: Percentage of households availing banking services by social group (i.e. SC, ST and Overall) in Odisha in 2001 and 2011
(in % of households)

Social group

Odisha

2001

2011

Rural Urban Total Rural Urban Total
SC

15.41

33.19

17.37

35.16

49.95

37.22

ST

14.67

33.14

15.81

34.10

47.62

35.00

All

19.74

52.10

24.21

41.02

66.58

45.04

Note: SC – Scheduled Caste; ST – Scheduled Tribe.
Source: Calculated from data available at Census Directorate, Odisha, Bhubaneswar, 2001 and 2011.

Figure1

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Important Changes in UNDP’s HDI

Important Changes in UNDP’s HDI

The United Nations Development Programmes (UNDP) human development index (HDI), which was devised by the two distinguished economists Prof. Mahbul ul Haq and Prof. Amarty Sen in 1990, has brought a paradigm shift in development economics from national income to people centric perspective. There was no change in the dimensions, the indicators and the tools to calculate HDI from 1990 to 2009, though a series of new indices such as human poverty index (HPI-1 and HPI-2), gender-related development index (GDI), gender empowerment measure (GEM), gender inequality index (GII) and multidimensional poverty index (MPI) added over the years. Interestingly, after 20 years the construction of HDI went through remarkable changes in its indicators and statistical tool. In fact, the three dimensions of HDI viz. a long and healthy life, knowledge, and a decent standard of living continue to be the same. The changes in the indicators and the statistical tool of HDI are given in tabular format as under.

Table-1: Changes in indicators and statistical tool of HDI in 2010

Items 1990 to 2009 2010 onwards
Dimensions A long and healthy life same as before
Knowledge same as before
A decent standard of living same as before
Indicators Life expectancy at birth Same as before
Adult literacy rate

Gross enrolment ratio

Mean years of schooling

Expected years of schooling

Gross domestic product per capita (PPP US$) Gross national income per capita (PPP US$)
Statistical tool to integrate three different dimensions indices for HDI Arithmetic mean Geometric mean

Source: United Nations Human Development Reports from 1990 to 2011, http://hdr.undp.org/en/reports/global/hdr2011/ [Archived on 28 October 2012 at http://www.webcitation.org/6Bkl1Y6OH%5D.

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Freedom From Hunger: Anti-poverty Programme in Tribal Areas

Dear Friends,

Greetings.

One of my earlier research report is published in New Delhi (http://ssdnbooks.com/ViewDetails.aspx?ID=12387&_pt=freedom%20from%20hunger) as a book. The name of the book is Freedom From Hunger: Anti-poverty Programme in Tribal Areas.  Me and Prof. Kishor C. Samal, who was my teacher at Master level and colleague at Nabakrushna Choudhury Centre for Develeopment Studies, Bhubaneswar (An ICSSR Institute) were doing this research.

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Concepts and Components of Union Budget

The entire budget speech (of the Finance Minister) is broadly classified under two parts, viz. Part A and part B. Part A of the speech covers the broad allocation of funds for various sectors and sub-sectors, initiation of new schemes, and focus areas of the government. This part is more concerned about the development issues at macro level. On the other hand, Part B covers the specific tax proposals in the economy. It has direct bearing over household and manufacturing/service providing unit. Therefore it deals with the micro aspects of the economy.

COMPONENTS AND CONCEPTS
OF UNION BUDGET

 

 

 

Damodar Jena

 

 

 

Tata-Dhan Academy

Madurai

26 February 2010

Contents

I.     Components of Union Budget. 1

Flow Chart. 1

Budget Heads. 2

II.    Concepts of Union Budget. 4

Broad Components of the Budget Speech. 4

Budget. 4

Revenue Expenditure. 4

Capital Expenditure. 5

Plan Expenditure. 5

Non-Plan Expenditure. 5

Revenue Receipt. 6

Non-tax revenue. 6

Tax Revenue (net to centre) 6

Direct Tax. 6

Indirect Tax. 6

Custom Duties. 7

Peak Rate. 7

Excise Duties. 7

Capital Receipt. 7

Revenue Deficit. 7

Budgetary Deficit. 8

Fiscal Deficit. 8

Primary Deficit. 8

RRBM Act 2003. 9

Current Account Deficit. 9

Gross Domestic Product (GDP) 9

Gross National Product (GNP) 9

Net Domestic Product (NDP) 9

Net National Product (NNP) 10

  1. Components of Union Budget

Flow Chart

                                   

Budget Heads

The followings are the budget heads and the important components of union budget.

Budget Heads
1. Revenue receipts
(a)   Tax revenue (net to centre)
(b)   Non-tax revenue (Interest receipts, Dividends from PSUs, Fees, Stamp duties, etc)
2. Capital receipts
(a)   Recovery of loans
(b)   Disinvestment of equity of PSUs (other receipts) and net grants
(c)    Borrowings and other liabilities (Internal and External borrowings)
3. Total receipts (1 + 2)
4. Non-plan expenditure
(a)   On revenue account
  • of which (a 1) interest payment
(b)   On capital account
           Other items on capital account
                      (b 1) Defence capital
                      (b 2) Other non-plan capital
(c)    States’ share of small savings
                      (c 1) included in capital account
                      (c 2) included in the NSSF
(d)   Centre’s share in small savings
5. Plan expenditure
(a)   On revenue account
(b)   On capital account
6. Total Expenditure (4 + 5)
(a)   Revenue expenditure (4a + 5a)
(b)   Capital expenditure (4b + 5b)
7. Revenue deficit = 1 – 6a
8. Budgetary deficit = 3 – 6
9. Fiscal deficit = 2c + 8 OR                       = 1 + 2a + 2b – 6
10. Primary deficit = 9 – 4a1


  1. Concepts of Union Budget

Broad Components of the Budget Speech

The entire budget speech (of the Finance Minister) is broadly classified under two parts, viz. Part A and part B. Part A of the speech covers the broad allocation of funds for various sectors and sub-sectors, initiation of new schemes, and focus areas of the government. This part is more concerned about the development issues at macro level. On the other hand, Part B covers the specific tax proposals in the economy. It has direct bearing over household and manufacturing/service providing unit. Therefore it deals with the micro aspects of the economy.

Budget

The budget is the outline of a government’s planned receipts and expenditures for some future period, normally one year.

Revenue Expenditure

The revenue expenditure is akin to consumption expenditure. In addition to expenditure on salaries and administration of government departments, it includes subsidies, interest payments on past debts and pension.

Capital Expenditure

Unlike revenue expenditure, capital expenditure is on the creation of assets. It includes: government expenditure on roads, structures and equipments; government investment including shares; and loans to public sector undertakings (PSUs).

Plan Expenditure

The plan expenditure deals with the new initiatives of government. It includes: the central plan expenditure; and the central assistance to state and union territory plans. Plan expenditure has the budget heads of revenue plan expenditure and capital plan expenditure.

Non-Plan Expenditure

Unlike plan expenditure, non-plan expenditure deals with the past commitments of the government. Non-plan expenditure has the budget heads of revenue non-plan expenditure and capital non-plan expenditure. Compared to revenue non-plan expenditure, the share of non-plan capital expenditure is much lower. Within the capital component of non-plan expenditure, the largest allocation goes to defence.

Revenue Receipt

Government’s revenue receipt is consisting of tax revenue (net to centre) and non-tax revenue. Tax revenue includes both direct and indirect taxes. Direct tax includes corporation tax, personal income tax and wealth tax. Direct taxes, by nature, cannot be passed on to other. It is based on the ability to pay principle. Indirect tax includes custom duty, excise duty and service tax.

Non-tax revenue

It is explained under Revenue Receipt.

Tax Revenue (net to centre)

It is explained under Revenue Receipt.

Direct Tax

It is explained under Revenue Receipt.

Indirect Tax

It is explained under Revenue Receipt.

Custom Duties

These are referred to duties charged on goods imported to or exported from the country. Accordingly, the importer or the exporter pays custom duties. It is being regulated by the Customs Act, 1962.

Peak Rate

Peak rate is the highest rate of custom duty applicable on an item.

Excise Duties

These are referred to duties imposed on goods produced or manufactured within the country.

Capital Receipt

The capital receipt is consisting of non-debt and debt receipt. The former consists of loan recovery, net grants, proceeds from PSUs disinvestments. The latter includes public borrowing from both internal and external sources, and other liabilities.

Revenue Deficit

The revenue deficit is defined as the difference between the government revenue expenditure and government revenue receipts.  In fact, revenue receipt is not enough to meet revenue expenditure. However, as per the Fiscal Responsibility and Budget Management (FRBM) Act 2003, revenue deficit should not have been since 2008‑09.

Budgetary Deficit

The budgetary deficit refers to the difference between government total expenditure (revenue expenditure and capital expenditure) and total receipts (revenue receipts and capital receipts).

Fiscal Deficit

The fiscal deficit is defined as the difference between the government total expenditure and the government total non-debt receipt.  It is also defined as the combination of budgetary deficit and government debt receipt, i.e. borrowing from both internal and external sources, and other liabilities.

Primary Deficit

The primary deficit is measured by the difference between the fiscal deficit and interest payments (a component of non-plan revenue expenditure).

FRBM Act 2003

It is explained under Revenue Deficit.

Current Account Deficit

The current account deficit refers to the difference between the country’s export and import.

Gross Domestic Product (GDP)

The gross domestic product (GDP) is defined as the money value of final goods and services produced within the country’s territory, irrespective of the ownership of the resources that produced it.

Gross National Product (GNP)

The gross national product (GNP) is defined as the money value of final goods and services produced by the country’s owned resources, irrespective of the place of production.  [GNPF = GNPM – Indirect Taxes + Subsidies]

Net Domestic Product (NDP)

The net domestic product (NDP) is measured as the difference between GDP and the capital consumption, i.e. depreciation.

Net National Product (NNP)

The net national product (NNP) is measured as the difference between GNP and the capital consumption, i.e. depreciation. The net national product at factor cost (NNPF) is internationally referred to as national income.


Notes

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Wish you a Happy New Year 2011

On the eve of 2011, I wish you a Happy New Year. I acknowledge the sharing of your valuable thoughts through comments. Please keep on sharing your thoughts.

Regards

Damodar Jena                                                                                                                                       Faculty (Economics) and Coordinator of Research                                                                     Tata-Dhan Academy                                                                                                                   Madurai                                                                                                                                               E-mail: damodarjena@gmail.com

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Deforestation and Tribal Poverty

We have been witnessing the progressive tendency towards deforestation. At the same time we have also been witnessing the progressive marginalisation and impoverishment of the tribal population. We have seen how closely tied up tribal life is with forests.

Basic economic theory tells us that the process of generation of value or wealth involves the application of factors of production like labour and capital on natural resources. The wealth so produced is shared by the agents of production. The process of deforestation must have involved a similar application of labour and capital on forest resources. Now the question is what has happened to the wealth generated as a result of the process. If a substantial part of it has accrued to the tribals, who, obviously, supplied the labour inputs, then it must manifest itself in the form of higher material standards for them. This is not the fact what the different studies reveal (Samal and Jena, 2001[1]; Jena and Pandey 2004[2]).

On the other hand, what it shows that the tribals are still in a state of poverty. Very little of the benefits of deforestation appears to have gone to them. Obviously, almost all the surplus wealth generated through deforestation has accrued to the other agents of production, which in this case are the suppliers of working capital and fixed capital, viz. the merchants and other commercial interests.

Given the fact that the nexus between commercial interests and the forest department creates virtual monopoly conditions in the utilisation of forest wealth[3], it is easy see that labour could be subjected to gross exploitation. The tribals share in the wealth generated cannot be more than subsistence wage. This explains the positive correlation between deforestation and tribal poverty.    


[1] Samal, Kishor C. & Jena, Damodar. (2001). Livelihood of Forest Dwellers: A Study in Three Villages (Keonjhar District) of an Eastern State, Orissa, India. The paper presented in the International Workshop on ‘Livelihood and Poverty Reduction: Lessons from Eastern India’ at Bhubaneswar on 25-27 September 2001. The Workshop was organised by the Centre for Development Studies, University of Wales Swansea, United Kingdom.

[2] Jena, Damodar. & Pandey, Balaji. (2004). Poor and Marginalised People in Orissa. The report submitted to the Department for International Development (DFID), New Delhi Office. Bhubaneswar: Institute for Socio-Economic Development.

[3] My subsequent article will try to qualify the statement on virtual monopoly.

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Development Projects and Deforestation in Orissa: A Retrospect

[A major part of this post is the excerpt of my Ph.D. thesis[1]]

It has been studied that the benefit of most of the development projects in Orissa has not been percolated to poor. Rather, the whole process is called as the destitute of development (Baverstock, n.d.[2]) or the problem of development (Jena and Pandey, 2004[3]).

Deforestation as a word is not available in the lexicon of the forest department unless the forest area of forest department is transferred to other department(s). In other words, irrespective of tree coverage, the area under forest department is called as forest area.

From 1947 to October 1980, a total of 1,99,348 hectare forest land in Orissa had been diverted for other development projects. Similarly, from December 1980 to 2004-05, a total of 34,264.3 hectare forest land has been deforested for different projects such as mining, industry, irrigation, railways, etc. During 1980 and 1991, the extent of deforestation, due to the above projects (88 projects), was 13,733.16 hectare, which has increased to 17,255 hectare during 1992 and 2001 due to 150 projects. Interestingly, the percentage of deforestation due to mining, and power and transmission has been increasing over the years (Table-1).

Table-1

Percentage distribution of forest area diverted to non-forest use in Orissa

Purpose of deforestation Pre-1980 (post-independence up to Oct 1980) Under Forest Conservation Act, 1980
Dec 1980 to June 1991 1992 to Dec 2001 2002-03 to 2004-05 Dec 1980 to 2004-05
Projects as % to total Area as % to total Projects as % to total Area as % to total Projects as % to total Area as % to total Projects as % to total Area as % to total
Irrigation NA 44.32 35.73 10.67 4.96 12.77 35.04 21.40 20.17
Industries NA NA NA 3.33 13.94 2.13 0.58 2.11 7.08
Mining NA 9.09 11.20 43.33 45.75 51.06 48.94 34.04 32.21
Roads NA 12.50 1.48 6.67 NA 19.15 2.15 10.53 0.80
Railway NA 1.14 6.56 2.67 6.16 NA NA 1.75 5.73
Power Transmission & Pipelines NA 14.77 6.69 18.67 9.71 14.89 12.82 16.84 8.80
Others* NA 18.18 38.34 14.67 NA NA NA 13.33 NA
Total 100.00(199348) 100.00(88) 100.00(13733.16) 100.00(150) 100.00(17255) 100.00(47) 100.00(3276) 100.00(285) 100.00(34264.3)

Note: Figures in parentheses show the respective total (projects in nos. and area in hectare).                                 

*Others include defence and human habitation.

NA: Not Available

Source: Extracted from the author’s Ph.D. thesis.

The percentage of deforestation area due to mining to total deforestation area was 11.20 per cent during 1980 and 1991, which has significantly increased to 45.75 per cent during 1992 and 2001, and further increased to 48.94 per cent during 202-03 and 2004-05. It indicates that mining alone is responsible for nearly 50 per cent of the total deforestation in the State. Besides, as on first January 1983, a total of 74,383 hectare forest land was encroached. The extent of the encroached forest land has increased to 78,505 hectare by 2003-04.

Discussions with the expert concern reveal that deforestation is responsible for higher frequencies and intensities of floods, soil erosion, siltation of river beds, and for the frequent changes in climatic conditions of the State. Moreover, the forest dwellers[4], which constitute around one-fourth of the total population of the State, are being victimised due to deforestation and fast depletion of forest resources.


[1] Economic Growth, Environment and Sustainable Development: An Empirical Study in Orissa

[2] Baverstock, P. (n.d.). The price of progress: Buying development from the poor. Forum of Fact-Finding, Raipur.

[3] Jena, Damodar. & Pandey, Balaji. (2004). Poor and Marginalised People in Orissa. The report submitted to the Department for International Development (DFID), New Delhi Office. Bhubaneswar: Institute for Socio-Economic Development.

[4] Forest dwellers: People living in and around forests.

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