Why in News:
The government announced a set of five measures aimed at supporting the rupee.
- To attract more foreign portfolio investors (FPI) into the corporate debt market, the government has said it will review a couple of restrictions on their investments.
- So, the condition that FPIs’ investment in a single corporate entity cannot exceed 20% of its corporate bond portfolio will be reviewed.
- The condition that FPIs cannot invest more than 50% of an issue of corporate bonds will also be reviewed.
- The government will review the mandatory hedging condition for infrastructure loans borrowed under the external commercial borrowing (ECB) route.
- Presently there is no compulsion on borrowers to hedge these loans.
- Manufacturing companies borrowing up to $50 million through ECBs will be able to do so only for a one-year term as against the three-year term allowed earlier.
- Masala bonds will be exempted from withholding tax this financial year and Indian banks will be allowed to become market makers in masala bonds including by underwriting.
- Masala bonds are rupee-denominated instruments issued abroad by Indian borrowers.
- The advantage of these bonds is that any depreciation in the rupee will not affect the borrower.
- The government will take necessary steps to cut down non-essential imports and increase export.
- Human Development Index
India slipped down one place from 130 to 131 among the 188 countries ranked in terms of human development, says the 2016 Human Development Report (HDR) released by the United Nations Development Programme (UNDP).
India’s human development index (HDI) value of 0.624 puts it in the “medium human development” category, alongside countries such as Congo, Namibia and Pakistan.
It is ranked third among the SAARC countries, behind Sri Lanka (73) and the Maldives (105), both of which figure in the “high human development” category.
The world’s top three countries in HDI are Norway (0.949), Australia (0.939) and Switzerland (0.939).
The HDI is a measure for assessing progress in three basic dimensions of human development: a long and healthy life, access to knowledge, and access to a decent standard of living.
Public health spending
The report says 1.5 billion people worldwide still live in multidimensional poverty, 54% of them concentrated in South Asia. While poverty fell significantly from 1990 to 2015, inequalities sharpened in the region.
South Asia also had the highest levels of malnutrition in the world, at 38%, and the lowest public health expenditure as a percentage of the GDP (1.6%, 2014). India’s public health expenditure was even lower, at 1.4% of the GDP. However, it did make some gains between 1990 and 2015, improving life expectancy by 10.4 years in this period. Child malnutrition also declined by 10 percentage points from 2015, and there was a modest gain in infant and under-five mortality rates.
The report praised India’s reservation policy, observing that even though it “has not remedied caste-based exclusions”, it has “had substantial positive effects”. It pointed out that “in 1965, for example, Dalits held fewer than 2% of senior civil service positions, but the share had grown to 11% by 2001”. The HDR also hailed the national rural employment guarantee programme as a “prime example” of “combining social protection with appropriate employment strategies”.
The report noted with approval India’s progressive laws, especially the Right to Information, National Food Security, and Right to Education Acts.
It commended the Indian grassroots group Mazdoor Kisan Shakti Sanghatan for popularising social audits of government schemes.
Noting that women, on an average, have lower HDI than men across the world, the report pointed out that the largest gender disparity in development was in South Asia, where the female HDI value is 20% lower than the male value.
In South Asia, gender gaps in entrepreneurship and labour force participation caused an estimated income loss of 19%. “Between their first and fifth birthdays, girls in India and Pakistan have a 30% to 50% greater chance of dying than boys,” the report noted.