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The focus of our expense is going to be on:

Rural development (80% increase in allocation)

Healthcare (48% increase in allocation)
Urban development (31% increase in allocation)
Education (20% increase in allocation)

RURAL DEVELOPMENT
The term rural development connotes overall development of rural areas to improve the
quality of life of rural people. In this sense, it is a comprehensive and multi-dimensional
concept, and encompasses the development of agriculture and allied activities, village and
cottage industries and crafts, socio-economic infrastructure, community services and
facilities and, above all, human resources in rural areas. As a strategy, it is designed to
improve the economic and social well-being of a specific group of people the rural poor.
Rural development has always been an important issue in all discussions pertaining to
economic development, especially in India.
India lives in its villages, and while the cities have grown immensely over the last 20 years,
rural areas have not seen that kind of development. For Indias economy to be strong, the
rural economy needs to grow. Rural areas are still plagued by problems of malnourishment,
illiteracy, unemployment and lack of basic infrastructure like schools, colleges, hospitals,
sanitation, etc. This has led to youth moving out of villages to work in cities. This could be
compared to the brain drain from India to US. Our villages need to grow in tandem with
cities and standard of life has to improve there for inclusive growth to happen. If rural India
is poor, India is poor.
It is easy to see the rising disconnect between cities and villages. Some examples are
1. While there are international fully air conditioned schools in our cities, the schools in
villages still dont have benches and chairs, leave alone computers. There is a huge
shortage of teachers in rural areas, and the school dropout rate is huge.
2. Cities have wide roads, flyovers and underpasses while many villages still dont have
proper roads. Urban-rural road links can play a vital role in rural growth.
3. Employment opportunities are hardly there in villages which forces youth to move to
cities creating imbalance in the ecosystem and leaving the villages deprived.
4. While there may be numerous hospitals, nursing homes and medical facilities in
cities, villages neither have health awareness nor health facilities.
Role and function of the Government

The Government's policy and programmes have laid emphasis on poverty alleviation,
generation of employment and income opportunities and provision of infrastructure and
basic facilities to meet the needs of rural poor. Agriculture, handicrafts, fisheries, poultry,
and diary are the primary contributors to the rural business and economy. The introduction
of Bharat Nirman, a project by the Government of India in collaboration with the State
Governments and the Panchayati Raj Institutions is a major step towards the improvement
of the rural sector. The National Rural Employment Guarantee Act 2005 was introduced by
the Ministry of Rural Development, for improving the living conditions and its sustenance in
the rural sector of India. The Ministry of Rural Development in India is engaged in
legislations for the social and economic improvement of the rural populace.
A large number of governments, public and private non-government organizations are
involved in developing technologies for rural areas. However, these technologies have
hardly touched the lives of the rural population. Apparently, the problem lies not only in the
generation, diffusion and adoption of technologies but also in poor documentation.
Recently, efforts have been made by several organizations to bring out a compendium of
technologies for rural areas for wide information dissemination and public awareness.
Table 1: The XIth plan allocation under various schemes/programmes
S.
No.
1.
2.
3.
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19

Scheme/Programme
SJGSY
SGRY
DPIP9SS (EAP) / EAPII Phase
Rural roads
Indira Avas Yojana
IWDP
DRDA
DPAP
Gramin Ajivika Pariyaojna
National Rural Rojgar Guarantee Scheme
MP Rojgar Gurantee Council
Mid-day meal
BRGF
Community Development
Walmi
Road maintenance
State rural road Connectivity
CM Awas Yojana (Apna Ghar)
State SGSY

Proposed out lay XIth Five Year (20072012) (Lakh Rs.)

29656.12
18016.64
23158.72
50000.00
27766.71
10598.56
6012.36
21294.84
22480.00
199881.85
3800.00
69.462.00
225695.00
29265.20
1250.00
2030.00
8647.60
6200.00
1800.00

20
Training
21
Master Plan
22
Sutradhar scheme
23
Gokul Gram adhosanrachan
24
Godan Yojana
Grand Total

50.00
1363.00
50.00
5000.00
1000.00
7,64,478.50

Some new schemes viz., State Rural Road connectivity, State Rural Housing, State SGSY,
Training, Master Plan and Sutradhar were proposed for XIth Five Year Plan period. The
provision made under new schemes for 2007-12 were Rs.18,110.60 lakhs and for 2007-08
were Rs.6,720.00 lakhs.
The road ahead
Although concerted efforts have been initiated by the Government of India through several
plans and measures to alleviate poverty in rural India, there still remains much more to be
done to bring prosperity in the lives of the people in rural areas. At present, technology
dissemination is uneven and slow in the rural areas. Good efforts of organizations
developing technologies, devices and products for rural areas could not yield high success.
Experiences of many countries suggest that technological development fuelled by demand
has a higher dissemination rate. However, in India, technology developers for rural areas
have been catering to needs (with small improvement), rather than creating demand. There
is no industry linkage machinery to create demand-based-technology market for rural
communities. Besides, there is also an imbalance between strategies and effective
management programmes. Propagation of technology/schemes for rural development is
slow and there is a lacking in wider participation of different stakeholders. An ideal
approach may therefore, include the government, panchayats, village personals,
researchers, industries, NGOs and private companies to not only help in reducing this
imbalance, but also to have a multiplier effect on the overall economy.
Hence, an increase in 80% in allocation is suggested in Rural Development.

HEALTHCARE
Introduction
Healthcare has become one of Indias largest sectors - both in terms of revenue and
employment. Healthcare comprises hospitals, medical devices, clinical trials, outsourcing,
telemedicine, medical tourism, health insurance and medical equipment. The Indian
healthcare sector is growing at a brisk pace due to its strengthening coverage, services and
increasing expenditure by public as well private players.

Indian healthcare delivery system is categorised into two major components - public and
private. The Government, i.e. public healthcare system comprises limited secondary and
tertiary care institutions in key cities and focuses on providing basic healthcare facilities in
the form of primary healthcare centers (PHCs) in rural areas. The private sector provides
majority of secondary, tertiary and quaternary care institutions with a major concentration
in metros, tier I and tier II cities.
India's competitive advantage lies in its large pool of well-trained medical professionals.
India is also cost competitive compared to its peers in Asia and Western countries. The cost
of surgery in India is about one-tenth of that in the US or Western Europe.
Market Size
The overall Indian healthcare market today is worth US$ 100 billion and is expected to grow
to US$ 280 billion by 2020, a compound annual growth rate (CAGR) of 22.9 per cent.
Healthcare delivery, which includes hospitals, nursing homes and diagnostics centers, and
pharmaceuticals, constitutes 65 per cent of the overall market.
There is a significant scope for enhancing healthcare services considering that healthcare
spending as a percentage of Gross Domestic Product (GDP) is rising. Rural India, which
accounts for over 70 per cent of the population, is set to emerge as a potential demand
source.
India requires 600,000 to 700,000 additional beds over the next five to six years, indicative
of an investment opportunity of US$ 25-30 billion. Given this demand for capital, the
number of transactions in the healthcare space is expected to witness an increase in near
future. The average investment size by private equity funds in healthcare chains has already
increased to US$ 20-30 million from US$ 5-15 million, as per Price Water House Coopers.
The Indian medical tourism industry is pegged at US$ 3 billion per annum, with tourist
arrivals estimated at 230,000. The Indian medical tourism industry is expected to reach US$
6 billion by 2018, with the number of people arriving in the country for medical treatment
set to double over the next four years. With greater number of hospitals getting accredited
and receiving recognition, and greater awareness on the need to develop their quality to
meet international standards, Kerala aims to become India's healthcare hub in five years.
Government Initiatives
India's universal health plan that aims to offer guaranteed benefits to a sixth of the world's
population will cost an estimated Rs 1.6 trillion (US$ 24.03 billion) over the next four years.
Some of the major initiatives taken by the Government of India to promote Indian
healthcare industry are as follows:
A unique initiative for healthcare 'Sehat' (Social Endeavour for Health and
Telemedicine) has been launched at a government run common service centre (CSC)
to empower rural citizens by providing access to information, knowledge, skills and
other services in various sectors through the intervention of digital technologies and
fulfilling the vision of a Digital India.

India and Sweden celebrated five years of Memorandum of Understanding (MoU).

The cooperation in healthcare between India and Sweden will help in filling gaps in
research and innovative technology to aid provisioning of quality healthcare.
Mr J P Nadda, Union Minister for Health & Family Welfare, Government of India has
launched the National Deworming initiative aimed to protect more than 24 crore
children in the ages of 1-19 years from intestinal worms, on the eve of the National
Deworming Day.
Under the National Health Assurance Mission, Prime Minister Mr Narendra Modi's
government would provide all citizens with free drugs and diagnostic treatment, as
well as insurance cover to treat serious ailments.
All the government hospitals in Andhra Pradesh would get a facelift with a cost of Rs
45 crore (US$ 6.76 million), besides the establishment of 1,000 generic medical
shops across the State in the next few months.
Mission Indradhanush launched by Mr JP Nadda aims to immunise children against
seven vaccine preventable diseases namely diphtheria, whooping cough, tetanus,
polio, tuberculosis, measles and hepatitis B by 2020. Government has set a target of
95 per cent immunisation cover by end of 2016.
The E-health initiative, which is a part of Digital India drive launched by Prime
Minister Mr Narendra Modi, aims at providing effective and economical healthcare
services to all citizens. The programme aims to make use of technology and portals
to facilitate people maintain health records and book online appointments with
various departments of different hospitals using eKYC data of Aadhaar number.

Strong growth in healthcare expenditure

Healthcare industry is growing at a tremendous pace owing to its strengthening
coverage, services and increasing expenditure by public as well private players.
During 2008-20, the market is expected to record a CAGR of 16.5 per cent.
The total industry size is expected to touch US$ 160 billion by 2017 and US$ 280 billion by
2020.
As per the Ministry of Health, development of 50 technologies has been targeted in the
FY16, for the treatment of disease like Cancer and TB.

Rise in per capita healthcare expenditure

Per capita healthcare expenditure is estimated at a CAGR of 5 per cent during FY 200815
to US$ 68.6 billion by 2015.
This is due to rising incomes, easier access to high-quality healthcare facilities and greater
awareness of personal health and hygiene.
Greater penetration of health insurance aided the rise in healthcare spending, a trend
likely to intensify in the coming decade.
Economic prosperity is driving the improvement in affordability for generic drugs in the
market.

Road Ahead
India is a land full of opportunities for players in the medical devices industry. The country
has also become one of the leading destinations for high-end diagnostic services with
tremendous capital investment for advanced diagnostic facilities, thus catering to a greater
proportion of population. Besides, Indian medical service consumers have become more
conscious towards their healthcare upkeep.

India's competitive advantage also lies in the increased success rate of Indian companies in
getting Abbreviated New Drug Application (ANDA) approvals. India also offers vast
opportunities in R&D as well as medical tourism. To sum up, there are vast opportunities for
investment in healthcare infrastructure in both urban and rural India.
Hence, we have proposed a 48% increase in allocation in the Healthcare sector.

URBAN DEVELOPMENT
India, the largest democracy in the world, a vibrant nation full of resources, on the path of
improving literacy rates has a great tendency to adopt and compete with the best of
international trends and technologies. The key for the development of India as a nation will
solely be dependent on striking the right balance of urban development alongside the
infrastructure growth. While cities in India are full of vibrant activity and energy, they are
also
becoming
disordered,
complex,
and
too
often
congested.
India's urban population is larger than the entire United States, and is second only to
China's. It is clear that India's urban population will continue to grow, probably doubling in
the next couple of decades. The scale and potential is enormous. To meet the challenges of
this inevitable and rapid urbanization, India needs well-performing cities and the integrated
infrastructure
development
will
be
the
key.
It has now become imperative that helping the Indian cities to function efficiently is
mandatory for the better future of the country. At the same time, we need to be extra
cautious while designing the new cities so that the mess that we are witnessing now can
better
be
avoided.
It has been recorded since several years that a rapid urbanization is happening across states
of India.
Projected Urban Population
The Registrar General of India has projected total and urban population for India and states.
It is interesting to know that 67% of total population growth in India in next 25 years is
expected to take place in urban areas. Urban population is expected to increase from 286
million in 2001 to 534 million in 2026 (38%)

Projected Urban and Total Population in India 2011, 2021 and 2026
Of the total increase in population, 50% during the period is likely to occur in seven less
developed states, namely, UP, MP, Rajasthan, Bihar, Chhattisgarh, and Jharkhand. But urban
growth is going to take place in states of U.P., Maharshtra, Tamil Nadu, and Gujarat and
these will contribute over 45% of urban growth over next 25 years.
To meet the demand of developing / upgrading the infrastructure which is generated out of
rapid urbanization as per statistics above and otherwise, we will have to take the following
steps:

a. We will have to build new cities to accommodate the surge and shift of population. The
basic premise of the design of these new cities must be that these new city projects are
considered as Infrastructure projects and not real estate projects. Infrastructure shall be
the key. These cities shall be green, sustainable, livable and a well planned integrated
development
b. Improve infrastructural facilities and help create durable public assets and quality
oriented services in existing cities & towns.
c. We will have to create conducive working environment to give a boost to private
investment under PPP model for sustainable development

Issues

with

the

existing

model

of

city

development:

Unplanned Expansion within Cities

Planned Traditional Expansion within Cities
(Semi) Planned Traditional expansion via Satellites

We Need to Get Serious about the Issue of City Development and Integrated
Infrastructure Development
This traditional approach will not work because new challenges call for new and innovative
solutions.
SHARE OF INFRASTRUCTURE IN GDP

Infrastructure Potential
India is the fourth largest economy in the world. However, one factor which is a drag on its
development is the lack of world class infrastructure. In fact, estimates suggest that the lack
of proper infrastructure pulls down India's GDP growth by 1-2 per cent every year.
Inadequate infrastructure was recognized in the Eleventh Plan as a major constraint for
rapid growth. The Plan had, therefore, emphasized on the need for massive expansion on
investment in infrastructure based on a combination of public and private investment, the
latter through various forms of PPPs. The total investment as a percentage of GDP is also
expected to be in the range of 7-9%
Owing to all the above factors, we plan to have a 31% increase in allocation towards Urban
Development in the budget.

EDUCATION
The Indian education sector has been recognized as a Sunrise Sector for investment in the
recent past. This recognition stems from the fact that the sector offers a huge untapped
market in regulated and non-regulated segments due to low literacy rate, high
concentration in urban areas and growing per capita income. The Government has also
been proactively playing the role of facilitator in this sector. The higher education sector,
owing to its huge potential, holds very promising prospects. With an estimated 150 mn
people in the age group of 18-23 years, the sector offers one of the most attractive yet
highly complex market for the private/foreign players. Despite some inherent concerns with
respect to choice of entity, not for profit character and foreign investment in formal
education space; the industry does offer various innovative business opportunities, which
can be explored for establishing a presence. The Government of India has recently reignited
its reforms agenda by opening up certain sensitive sectors to foreign investment such as
retail and civil aviation, which should ideally result in increased economic activity and
employment generation. In order to capitalize on this huge employment opportunity, we
believe the Government should take such a positive step in the higher education sector also
by reducing the complexities governing foreign investment. This should also help the
Government in achieving its aggressive goals of access, equity and excellence in higher
education. The Planning Commission in its approach paper to 12th Five Year Plan had
suggested that the current not-for-profit approach in the education sector should be reexamined in a pragmatic manner so as to ensure quality without losing focus on equity we
believe that the Government should seriously consider this suggestion to attract
private/foreign investment in this sector.

Below is a snapshot of the current higher education sector in India:

India has a total of 610 universities. 43 central universities, 299 state universities, 140
private Universities, 128 deemed universities and 5 institutions established through state
legislation, 30 Institutions of National Importance
There are 45 technical institutes, 13 management institutes, 4 information technology
institutes, 6 science and research institutes and 3 planning and architecture institutes
Currently, the Government spends around 3.8% of its GDP on education
Less than 1% of the $38 bn of the Government spend on education was towards Capex
(2008-09)
According to the 2011 census, the total literacy rate in India is 74.04% compared to the
world average of 83.4% (2008)
The female literacy rate is 65.46 % and male literacy rate is 82.14 %
FDI inflows in the education sector during May 2012 stood at $31.22 mn
Industry Growth & Size
The Indian Education sector is characterized by a unique set of attributes: Huge market size both in terms of number of students and annual revenues
A potential growth rate of 16% is expected over the next 5 years
Significant activity in terms of new foreign entrants and participation is expected to be
witnessed in the years ahead
Accreditation is still not mandatory, however, reforms are in the pipeline to address this
issue The Indian education space is evolving, which has led to the emergence of new niche
sectors like vocational training, finishing schools, child-skill enhancement and e-learning
among others. Growth is driven by the increasing propensity of the middle class to spend on
education and more aggressive initiatives by private entrepreneurs.
Role of Education in the Economic growth:
The growth of the economy and development of a country is depending upon the
education system of that particular country. A perfect and successful batch of youth of a
country is come from education sector. Many foreign / abroad countries including India,
China, Australia, Newzeeland, Singapore and many other developing moves started to
welcome more international students. As they bring different ideas, culture as well as
foreign incomes in the form of fees structure, living expenses and other daily expenses.
Whereas those developed countries like UK, USA Canada and other developed European

countries already open doors for international students and these countries are always
emphasis on improving their education structure, developing more colleges and universities
on country side areas and always in a way to update their course content on regular. India
has also launched many types of different degree courses offered by various universities
and colleges of India. But more as times goes on, Indian Education Development has very
well improved and now started many programmes and degree courses at International of
standard along with the implementation of grading system in middle school that brings
relief to middle school students and make them motivated to work hard to complete with
co-operate world. The story of education in India is a paradox. Twenty percent of Indian get
a fairly decent education, and in a nation of 1.2 billion, this is huge number and helps to
explain why India has become the back office of the world. Government schools have failed
in India, and this is why one-third of Indians children attend private schools. The
Government has implicity recognized its failure and requires that a fourth of the seats in all
private schools be reserved for the poor, whose fees are subsidized by the Government.

Higher Education in India: Current State of Play:

India possesses a highly developed higher education system, which offers the facility of
education and training in almost all aspects of human creativity and intellectual endeavors
like: arts and humanities; natural, mathematical and social sciences; engineering; medicine;
dentistry; agriculture; education; law; commerce and management; music and performing
arts; national and foreign languages; culture; communications etc. The institutional
framework consists of Universities established by an Act of Parliament (Central Universities)
or of a State Legislature (State Universities), Deemed Universities (institutions which have
been accorded the status of a university with authority to award their own degrees through

central government notification), Institutes of National Importance (prestigious institutions

awarded the said status by Parliament), Institutions established State Legislative Act and
colleges affiliated to the University (both government-aided and unaided) There are three
principal levels of qualification within the higher education system in the country:
I.
II.
III.

Graduation level
Post-graduation level
Doctoral degree.

Besides these three, there is another qualification called a Diploma. It is available at the
undergraduate and postgraduate level. At the undergraduate level, the duration of the
course varies between one to three years; postgraduate diplomas are normally awarded
after one year course, though some diplomas are awarded after two years of study.

Primary Education in India:

Primary education is often referred to as elementary education. The framers of Indian
Constitution did not initially include Education as one of the fundamental rights.
However, the Right to Education has later been included as a fundamental right in
India. The Right to Education Act (RTE) came into force on 1st April, 2010. Every child aged
between 6 and 14 years are entitled to free elementary (primary) education.
Present Status:
The condition of elementary schools has improved during the recent years. However,
some of the government or semi-government controlled primary schools are located in the
far interior corners of the districts. The condition of buildings and infrastructure are poor.
Though the teachers posted there get good salary, there are instances of irregularity of
teachers in schools.
The government should allocate more funds towards elementary education, which is the
key to building the future of the nation. If additional funds are allocated towards primary

education, then surely the requirement of primary education could also be attended to in
right earnest.
Thus primary education has been bifurcated into the two classes:

Well-equipped, well maintained and well-set public schools for the rich and
The primary school for the poor.

Private Primary Schools: It is the privately run public schools which are rendering excellent
service in this field, but then the fee-structure in these schools is so high that it is beyond
the reach even of the middle classes.
Drop-outs in Government run schools: The main reason for the drop-outs from primary
schools has been the engagement of children in child-labour. Though child labour is
prohibited by law, the government has yet taken sufficient measures to punish the
offenders who engage child-labour. The families find their children working as a source of
additional income.
The government run schools have less facilities to attract children. The percentage of dropouts in states such as Rajasthan, Bihar, etc. has been found to be very high. There still exists
many schools which has insufficient class rooms, no facility for drinking water, and no toilets
and no furniture in the classrooms, if a classroom existed.
In 2008, only about 50 percent of Standard 3 students could read a Standard 1 text, but by
2012, it declined to 30 percent - a fall of 16 percent. About 50 percent of the Std 3 kids
cannot even correctly recognise digits up to 100, where as they are supposed to learn two
digit subtraction. In 2008, about 70 percent of the kids could do this.
Not only that the country is unable to improve the learning skills of half its primary school
children, in the last four years, it has fallen to alarming lows. Similar deterioration in
standards of education was also noted among Std 5 students.
In order to overcome the various problems mentioned above and to elevate the current
condition of the Education sector in India, we plan to increase allocation of funds by 20%
over last year.