foŸkh; izcU/k izf’k{k.k ,oa 'kks/k laLFkku] mŒçŒifmtr.up.nic.in/images/Cronicle2012.pdf ·...

F&A Chronicle 2012

1

foŸkh; izcU/k izf’k{k.k ,oa 'kks/k laLFkku] mŒçŒ

vad % NCchlok ¡

Issue : XXVI

o"kZ % 2012

Year : 2012

Institute of Financial Management Training & Research, U.P.

F&A Chronicle 2012

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F&A Chronicle 2012

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Qkbusal ,.M ,dkmUV~l ØkWfudy

Finance & Accounts Chronicle

F&A Chronicle 2012

4

Ádk'kd

funs'kd]

foŸkh; izcU/k izf’k{k.k ,oa 'kks/k laLFkku] mŸkj Áns'k

24@3&4] bfUnjk uxj] y[kuÅ&226016

nwj‚k"k % 0522&2345210] 2345176] 2353623] 2346314

QSDl % 0522&2349446

osclkbV % http://ifmtr.up.nic.in Ã&esy % [email protected]

vad % NCchlok¡

Issue : XXVI o"kZ % 2012

Year : 2012

laj{kd

oÙnk l:i

Áeq[k lfpo] foŸk]

mŸkj çns'k 'kklu

laiknd

gseUr dqekj lDlsuk

funs'kd] foRrh; izcU/k izf'k{k.k

,oa 'kks/k laLFkku] mŸkj çns'k

Ádk'ku lykgdkj lfefr

vt; vxzoky

fo'ks"k lfpo] foŸk]

mŸkj çns'k 'kklu

ykyth

vuqØef.kdk (Index)

[k.M&d % ys[kekyk (Articles) SN. Øe

Topic fo"k;

Author ys[kd

Page i`"B

1 A Compilation….. Mr. H.K.Saxena, Director,

IFMTR 1

2 Asset Management in Govt. Sector Mr. Vivek Tripathi,

Asstt. Director, IFMTR 6

3 India & Globalisation: A Mythical

Dream or A New Horizon

Ms. Pooja Raman,

Asstt. Accounts Officer,

Cane Commissioner Off.

16

4 Fiscal Decentralization Mr. R.S. Shukla,

Joint Director, IFMTR 37

5 Impact of Aadhar (Unique ID) on Mr. Ashesh Agarwal, Tech. 45

ßQkbusal ,.M ,dkmUV~l ØkWfudyÞ if=dk esa Ádkf'kr ys[kksa esa O;Dr fopkj ys[kd¨a ds futh fopkj gSa

v©j ÁLrqr if=dk esa Ádk'ku ek= ls mDr fopkj laLFkku vFkok ljdkj ds fopkj ugha ekus tk ldrs gSaA

F&A Chronicle 2012

5

funs'kd] d¨"kkxkj] mŸkj çns'k

vCnqy xuh

funs'kd] vkUrfjd ys[kkijh{kk]

mŸkj çns'k

Á¨å,ådsåflag

funs'kd] fxfj fodkl v/;;u

laLFkku] y[kuÅ

vk'ks"k vxzoky

rduhdh funs'kd] ,uåvkÃålhå]

mŸkj çns'k

jktho JhokLro

vij funs'kd] ,Qå,låMhå]

mŸkj çns'k

eqjyh/kj flag

lgk;d lwpuk funs'kd]

¼lwpuk funs'kd] mŸkj çns'k }kjk

ukfer vf/kdkjh½

Governance Director, NIC

6 Tax on Goods & Services: Need and

Issues

Prof. Ajit Kumar Singh,

Director, GIDS, Lko 51

7 Implementation of MNREGP in U.P.:

A Critical Appraisal

Dr. G.S. Mehta,

Sr. Fellow, GIDS, Lko 58

8 Budget Allotment through Central

Server

Mr. Pankaj Saxena,

Deputy Director, FSD 68

9 Áns'k esa uohu isa'ku ;kstuk dk

fØ;kUo;u Jh ,ådså flag] laŒ funs'kd]

isa'ku funs'kky;] måÁå

73

10 ,Øqvy vk/kkfjr n¨gjh ys[kk Á.kkyh %

uxjh; fudk;¨a ds lUnÒZ esa

Jh d̀".k x¨iky] lsåfuå@Òwå

iwå funs'kd] vkÃŒ,QŒ,eŒVhŒvkjŒ

86

11 xouZesUV ,dkm.V~l #Yl 1990 Jh dsåMhåchåchåflag]

funs'kd ¼foÙk½] måÁå phuh fuxe

92

12 izns'k esa foRr foHkkx dk laxBukRed

,oa izdk;kZRed

F&A Chronicle 2012

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F&A Chronicle 2012

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foRrh; izcU/k izf'k{k.k ,oa 'kks/k laLFkku] mŸkj Áns'k % ,d ifjp;

fo’o ds lcls cM+s yksdrU= ds lcls cM+s jkT; mRrj izns'k dk foRrh; izcU/ku vius vki esa vR;ar

egRoiw.kZ gh ugha vfirq fofo/krkiw.kZ ,oa cgqvk;keh jgk gSA bls n`f"V esa j[krs gq, jkT; ds ys[kk ,oa vkfMV ls

lEcfU/kr dkfeZdksa ds izf'k{k.k ,oa lrr dkS’ky&vfHkòf) gsrq bl laLFkku ds cht :i esa loZizFke o"kZ 1973 esa

dks"kkxkj deZpkjh izf'k{k.k dsUnz dh LFkkiuk dh x;h Fkh ftlesa o"kZ 1978&79 ls 'kklu ds fofHkUu foHkkxksa ds

ys[kkdkjksa ds izf'k{k.k dh Hkh O;oLFkk dh x;hA o"kZ 1984&85 ls foRr ,oa ys[kk lsok ds vf/kdkfj;ksa gsrq okf.kfT;d

ys[kk iz.kkyh esa izf'k{k.k izkjEHk fd;k x;kA foRrh; fo"k;ksa esa fuiq.krk ,oa fo'ks"kKrk gsrq fof'k"V izf'k{k.k dh

mikns;rk dks ns[krs gq, o"kZ 1986&87 esa izf'k{k.k dsUnz dks iw.kZdkfyd funs’kd ds v/khu foRr ,oa ys[kk izf'k{k.k

laLFkku ¼FATI½ ds :i esa mPphd`r fd;k x;k vkSj o"kZ 1987 esa gh bls orZeku ifjlj ¼24@3] bfUnjk uxj]

y[kuÅ½ esa LFkkukUrfjr fd;k x;kA dkykUrj esa bl laLFkku dks o"kZ 1997&98 esa jk"Vªh; Lrj iznku djrs gq, bldk

uke ÞfoRrh; izcU/k izf'k{k.k ,oa 'kks/k laLFkkuß ¼IFMTR½ dj fn;k x;kA laLFkku ds orZeku uke esa foRrh; izcU/ku]

izf'k{k.k&izfof/k ,oa rRlEcU/kh 'kks/k dh ßf=os.khÞ lekfo"V gSA

laLFkku dh LFkkiuk ewy :i esa mŸkj Áns'k ljdkj ds foRr ,oa ys[kk lEcU/kh dkfeZdksa ds izf'k{k.k gsrq dh

x;h FkhA foRr ,oa ys[kk lEcU/kh fo"k;ksa dh O;kid mikns;rk ds n`f"Vxr nwljh lsokvksa@foHkkxksa ds dkfeZdksa dks Hkh

foRrh; fo"k;ksa esa izf’kf{kr djus ds mn~ns’; ls o"kZ 1998 esa laLFkku ifjlj esa ßlsUVj Qkj MsoyiesaV vkQ QkbusfU'k;y

,sMfefuLVªs’kuÞ ¼CDFA½ dh LFkkiuk dj laLFkku dh xfrfof/k;ä dks ,d o`gRrj Lo:i iznku fd;k x;kA

foRr foHkkx ds gh v/khu lEçfr dk;Zjr nks vU; izf'k{k.k laLFkkuksa& bykgkckn fLFkr LFkkuh; fuf/k

ys[kkijh{kk foHkkx ds izf'k{k.k laLFkku rFkk QStkckn fLFkr iapk;r ,oa lgdkjh lfefr;k¡ ys[kkijh{kk foHkkx ds

izf'k{k.k laLFkku dks Hkh blh laLFkku esa lafoyhu djus dh laLrqfr foŸk ¼osru vk;¨x½ fo‚kx }kjk dh tk pqdh gS]

ftlds QyLo#i Hkfo"; esa mDr nksuksa laLFkkuksa }kjk fd, tkus okys dk;Z Hkh blh laLFkku }kjk lEikfnr fd,

tk,axsA

izns'k ljdkj rFkk mlls lEcfU/kr {ks=h; laxBuksa esa fofHkUu Lrjksa dh izf'k{k.k vko';drkvksa dk vkdyu

dj rnuqlkj izf'k{k.k dk;ZØeksa dk vk;kstu djuk laLFkku dk Áeq[k ,oa dsUnzh; dk;Z gSA mDr ds vfrfjDr foRrh;

Á'kklu ,oa ÁcU/ku esa 'kks/k dk;ksZa dks xfr'khyrk iznku djus ds fy, laLFkku esa le;≤ ij fofo/k le&lkef;d

fo"k;ksa ij xksf"B;ksa] dk;Z’kkykvksa ,oa lsfeukjä vkfn dk vk;kstu Hkh gksrk jgrk gSA

laLFkku }kjk ÁLrqr okf"kZd if=dk ßQkbusal ,.M ,dkmUV~l ØkWfudyÞ ds vfrfjDr =Sekfld U;wtysVj

ßvFkZÞ rFkk le;≤ ij fofHkUu foRrh; fo"k;ksa ij lkjxfHkZr lkexzh ds ladyu ÞfoRr&iFkß dk izdk'ku ‚h fd;k

tkrk gSA

laLFkku ds mi;ZqDroÆ.kr ÞlkW¶Vos;jß ds vuqdwy gh mlds ÞgkMZos;jß dk lrr~ fodkl g¨rk pyk vk jgk

gSA Á'kklfud ‚ou fLFkr okrkZd{k] dEI;wVj ySc] iqLrdky;] l‚kd{k] Ás{kkxg̀ ,oa vU; dk;kZy; d{k l‚h esa

foVªhQkbM VkbYl ¶y¨fjax rFkk ;Fk¨fpr lTtk dh O;oLFkk dh xÃ gSA ifjlj dk ifjos'k gjk&‚jk ,oa

Áf'k{k.k®i;qDr gSA laLFkku dh oÆ.kr voLFkkiuk dk foLrkj orZeku ifjlj ls layXu Hkw[k.M ¼24@4] bfUnjk uxj]

y[kuÅ½ ij ‚h fd;k tk jgk gS tgk¡ v/kqukru lqfo/kkvksa ls lqlfTtr yxHkx 300 O;fDr;ksa ds cSBus dh {kerk okyk

izs{kkx`g 'kkldh; fu;eä ds vuqlkj Á;¨x fd;k tkus yxk gSA blh Hkw[k.M ij 100 izf'k{k.kkfFkZ;ksa ds fy, ,d mUur

Nk=kokl Hkh lEçfr fuekZ.kk/khu gSA

bl izdkj ;|fi ;g laLFkku jkT; ljdkj dk ,d vxz.kh laLFkku gS rFkkfi izf'k{kq vf/kdkfj;ksa@deZpkfj;ksa

dh varghu Kku fiiklk dks 'kkUr djus ds fy, izf'k{k.k ds u;s&u;s mikxeksa dh ryk'k rFkk rnuqdwy laLFkku dk

fodkl ge fujUrj tkjh j[ksaxsA------

F&A Chronicle 2012

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foRrh; izcU/k izf'k{k.k ,oa 'kks/k laLFkku & ladk;

Jh gseUr dqekj lDlsuk funs’kd 1974 cSp

,e0,l-lh0 ¼HkkSfrdh½ [email protected] 9336081514

lEÁfr funs'kd] isa'ku ds lkFk&lkFk laLFkku dk vfrfjDr ÁÒkjA

jkT; ljdkj ds fofÒé foHkkxksa ;Fkk dks"kkxkj] ou] [kk| o jln] vkcdkjh] Ñf"k ,oa vU;

fo’ofo|ky; ä rFkk v©|¨fxd o vkoklh; fodkl Ákf/kdj.k¨a esa v©j 'kklu ds foŸk foÒkx esa fo'ks"k

lfpo ds #i esa foRrh; Á'kklu o izcU/ku dk 35 o"k Z̈a dk fo’kky vuqHkoA

vfÒ#fp {ks= % ekuo lalk/ku izcU/ku] Q.M eSustesUV] cSafdax] lsokuSo`fŸkd ykÒ] Ñf"k

fo'ofo|ky; izcU/ku bR;kfnA

Jh jkds’k pkScs la;qDr funs’kd ¼Áf'k{k.k½ 1984 cSp

ch0,l-lh0] ,e0,0 ¼vFkZ’kkL=½] ,y,y0ch0

[email protected] 9415216493

vfHk;kstu] dks"kkxkj rFkk fofHkUu foHkkxksa esa foRr ,oa ys[kk dk;ksZ dk O;kid vuqHkoA

vfÒ#fp {ks= % vk;dj fu;e] vodk'k fu;e] dks"kkxkj iz.kkyh] dEI;wVj] Ã&xousZUl bR;kfnA

Jh jek’kadj 'kqDy la;qDr funs’kd ¼Á'kklu½ 1987 cSp

,e0,l-lh0 ¼HkkSfrdh½ [email protected] 9451144962 dks"kkxkj] xUuk foHkkx] bUthfu;fjax dkyst] fo|qr fu;ked vk;ksx] jkgr foHkkx esa dk;Z dk

vuqHkoA

vfÒ#fp {ks= % ;k=k HkRrk fu;e] isa’ku fu;e] Hk.Mkj Ø; fu;e] osru fu/kkZj.k fu;e] ctV]

vodk’k fu;e bR;kfnA

Jh dey pUnz mi funs’kd 1991 cSp

,e0,l-lh0 ¼izkf.k foKku½ [email protected] 9936749662 orZeku lsok ls iwoZ xzkeh.k cSad esa vf/kdkjh rFkk lsok;kstu vf/kdkjh ds in ij lkr o"kZ dk vuqHkoA

orZeku lsok esa LFkkuh; fudk;] ftyk ifj"kn] vYila[;d dY;k.k] df̀"k] izkfof/kd f’k{kk] lSfud dY;k.k

foHkkx esa dk;Z dk vuqHkoA

vfÒ#fp {ks= % ;k=k HkRrk fu;e] vuq’kklfud dk;Zokgh] ctV] Hk.Mkj Ø; fu;e] foRrh;

vf/kdkjksa dk izfrfu/kk;u] lkekU; Hkfo"; fuf/k fu;e bR;kfnA

Jh vkj0,y0 f=ikBh mi funs’kd 1994 cSp

,e0,0 ¼izk0Hkk0bfrgkl½ [email protected] 9415090412

csfld f’k{kk] dks"kkxkj] flapkbZ] cht izek.khdj.k laLFkk] ty fuxe esa dk;Z dk vuqHkoA

vfÒ#fp {ks= % osru fu/kkZj.k fu;e] ,0lh0ih0] isa’ku fu;e] ;k=k HkRrk fu;e] thih,Q fu;e]

dks"kkxkj iz.kkyh bR;kfnA

F&A Chronicle 2012

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Jh Kku flag mi funs’kd 1995 cSp

,e0,l-lh0 ¼xf.kr½ [email protected] 9451673453

ftyk iapk;r] iqfyl eq[;ky;] csfld f’k{kk ifj"kn] fucU/ku] ekuokf/kdkj vk;ksx vkfn esa

dk;Z dk vuqHkoA

vfÒ#fp {ks= % lkekU; ys[kk fu;e] isa’ku fu;e] ;k=k HkRrk fu;e] thih,Q fu;e] Hk.Mkj Ø;

fu;e] vkpj.k fu;e] vuq’kklfud dk;Zokgh] fctusl xf.kr bR;kfnA

Jh foosd f=ikBh lgk;d funs’kd 1997 cSp

,e0,l-lh0 ¼HkkSfrdh½] ih0th0Mh0ch0,e0


f’k{kk fo‚kx] dks"kkxkj] måçå iz’kklu ,oa ÁcU/ku vdkneh esa dk;Z dk vuqHkoA

vfÒ#fp {ks= % foRrh; izcU/ku] lkekU; ‚fo"; fuf/k] dEI;wVj] lwpuk dk vf/kdkj] ifCyd

ÁkbosV ikVZujf'ki ¼ihŒihŒihŒ½ bR;kfnA

Jh foosd dqekj flag lgk;d funs’kd 1998 cSp

,e0,l-lh0 ¼HkwxHkZ foKku½] ,e0,0 ¼fgUnh½] ,e0ch0,0 ¼Qkå½


l’kL= lsuk eq[;ky; flfoy lsok ¼Hkkjr ljdkj½ esa lso®ijkUr bl laLFkku esa foxr 10 o"k¨Za

ls dk;ZjrA

vfÒ#fp {ks= % foRrh; izcU/ku] lsok fu;e] thih,Q fu;e] dEI;wVj bR;kfnA

Jh iadt dqekj e)sf’k;k lgk;d funs’kd 2008 cSp

ch0,0 [email protected] 9415037831

ftyk iapk;r] js’ke] i'kqikyu] m0iz0 gsYFk flLVe MsoŒ ifjŒ esa dk;Z dk vuqHkoA

vfÒ#fp {ks= % thih,Q fu;e] ;k=k HkRrk fu;e] vkpj.k fu;e bR;kfnA

Jh cgksjh yky ofj"B izf’k{kd [email protected] 8948858967 dks"kkxkj funs'kky; ds f'kfoj dk;kZy;] {ks=h; dk;kZy; ,oa eq[;ky; esa cRrhl o"k Z̈a ls ‚h

vf/kd dk lsokuqHkoA

vfÒ#fp {ks= % vodk’k fu;e] lsok fu;e] dk;kZy; i)fr] lkewfgd chek bR;kfnA

Jh v#.k dqekj d©f'kd ofj"B izf’k{kd 9839154260

,eådkeå ys[kk o ys[kkijh{kk dk; Z̈a esa yx‚x iPphl o"k¨Za dk lsokuqHkoA

vfÒ#fp {ks= % okº; lsok] ys[kkijh{kk] okf.kfT;d ys[kkadu bR;kfnA

F&A Chronicle 2012

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lEikndh;

Jhen~‚xon~xhrk esa dgk x;k gS& Þ;®x% deZ"kq d©'kye~ß vFkkZr~ vius dk;¨Za

d¨ Bhd Ádkj ls lEikfnr djuk gh ;¨x gSA nwljs 'kCnä esa dgk tkrk gS& ^deZ

gh iwtk gSA^ vrSo vius dk;Z d¨ lnSo ÅtZfLor ru v©j ÁQqfYyr eu ls

d©'kY; ds lkFk djuk pkfg,A

mijksDr Hkko dks vkRelkr~ djrs gq;ss foRrh; izcU/k izf'k{k.k ,oa 'kks/k

laLFkku ‚h mŸkj Áns'k ds foRrh; izcU/ku ,oa Á'kklu ds {ks= esa izf'k{k.k l=®a ds lrr~ lapkyu]

lax¨f"B; ä] lsfeukjä o dk;Z'kkykvä ds vk;¨tu rFkk i=&if=dkvä ds lkef;d Ádk'ku vkfn

'kkldh; dk;¨Za d¨ lEikfnr djrk pyk vk jgk gSA blh Øe esa laLFkku dh yC/kÁfrf"Br okf"kZd

if=dk ßQkbusal ,.M ,dkmUV~l ØkWfudyÞ ds NCchlosa vad ds Ádk'ku ds volj ij g"kZ dk vuq‚o

g¨ jgk gSA foŸkh; izcU/ku ,oa ys[kk laca/kh v|ru fu;eksa o 'kklukns’kksa dh lE;d~ tkudkjh leLr

ljdkjh lsodä d¨ vius drZO;ksa ds fuoZgu esa fu’p; gh mikns; gksrh gSA ßQkbusal ,.M ,dkmUV~l

ØkWfudyÞ if=dk esa blh d¨ Ë;ku esa j[krs gq, Áklafxd fo"k;ksa ij Kkuo)Zd ys[k Ádkf'kr fd,

tkrs gSaA vf‚uo 'kklukns’kksa ds ladyu dh mikns;rk ds dkj.k if=dk ds vad cgqÁ'kaflr ,oa

laxzg.kh; jgs gSaA

ßQkbusal ,.M ,dkmUV~l ØkWfudyÞ ds ÁLrqr vad esa ÁcU/ku ds vusd vk;ke®a d¨ ÁLrqr

djus dk Á;kl fd;k x;k gSA ^ys[kekyk^ ds vUrxZr jkT; ds lexz o prqÆnd fodkl gsrq

ifjorZu'khy ifjos'k esa 'kkldh; LokfeRo ds vUrxZr ifjlEifŸk; ä dk ÁcU/ku] oS'ohdj.k ds n©j esa

fodklÜeq[k ‚kjrh; vFkZO;oLFkk dh leh{kk] ÁcU/ku esa jktd¨"kh; fodsUæhdj.k dh ‚wfedk ds

ekun.M ä dk Áfriknu] lq'kklu ds ifjÁs{; esa jk"Vªh; igpku i= ¼vk/kkj dkMZ½ dh la‚koukv®a dk

foospu] jktLo djk/kku esa oLrq ,oa lsokdj dk ÁkDdyu] Þeujsxkß dk flagkoy¨du] Áns'k ds

d¨"kkxkj ä esa dsUæh; loZj ds ek/;e ls ctV&vkcaVu] uÃ isa'ku ;¨tuk dk fØ;kUo;u] ,Øqvy

vk/kkfjr n¨gjh ys[kk Á.kkyh ds ldkjkRed O;ogkfjd igyqvä dk js[kkadu] ^xouZesUV ,dkm.V~l

#Yl 1990^ dk Áklafxd foospu rFkk jkT; ds foŸkh; izcU/ku ds lw=/kkj foŸk fo‚kx dh bdkb;¨ a

,oa muds Ádk;¨Za dk fooj.k foU;Lr gSA

ßQkbusal ,.M ,dkmUV~l ØkWfudy 2012Þ dk Ádk'ku if=dk dh laj{kd lqJh oÙnk l#i]

izeq[k lfpo] foŸk] måçå'kklu ds ekxZn'kZu ls gh la‚o g¨ ldk gSA eSa izeq[k lfpo eg¨n;k ds Áfr

viuk gkfnZd vkHkkj O;Dr djrk g¡wA if=dk dh Ádk'ku lykgdkj lfefr ds v/;{k Jh vt;

vxzoky] fo'ks"k lfpo] foŸk] måçå'kklu( Jh ykyth] funs'kd] d¨"kkxkj] måçå rFkk vU; lEekfur

lnL; ä ds Áfr eSa viuh fouez —rKrk Kkfir djrk gw¡A if=dk esa Ádk'kukFkZ laÁsf"kr leLr ys[kä

ds fo}ku ys[kd ä dk eSa fo'ks"k vkÒkjh gw¡A if=dk d¨ orZeku Lo:i esa ÁLrqr fd, tkus gsrq eSa

leLr ladk; vf/kdkfj; ä fo'ks"kdj Jh dey pUæ] mi funs'kd ,oa Jh foosd dqekj flag] lgk;d

funs'kd rFkk laLFkku ds deZpkfj;ä d¨ muds cgqewY; lg;¨x gsrq ËkU;okn nsrk g¡wA

if=dk ds ÁLrqr vad ds lEcU/k esa lq/kh ikBdksa ds fopkjksa dk Lokxr gSA

y[kuÅ gseUr dqekj lDlsuk

fnukad % 02&02&2012 funs’kd

F&A Chronicle 2012

11

[k.M&d

ys[kekyk

(Articles)

“दीऩ वो दीऩ है जो जर के यौशनी कय दे, गझर वही गझर है जो गझरशन भें खझशफझएॉ बय दे।

ज ॊदगी म ॉ तो हय इॊसान जजमा कयता है, आदभी वो है जो भझदों भें ज ॊदगी बय दे।”

- अऻात

F&A Chronicle 2012

12

A Compilation……

Management is process of goal directed, interrelated and interdependent activities,

aimed at accomplishing organisational objectives in efficient and effective manner. In this era of

cut-throat competition, the new age leaders are not only required to redesign, reinvent and

renovate existing organisations but at the same time, secure coherence, coordination and

accountability. Good managers know how to get the best through “motivation”. Motivation is

key to performance improvement. Organisations value the people who are willing to “go an extra

mile”. As for motivation, the text of famous speech of Steve Jobs delivered on June 12, 2005 to

the Graduates of Stanford University which continues to inspire millions world over in pursuing

their dreams and see the opportunities even in the face of setbacks, is reproduced here for

the benefit of readers.

-H.K. Saxena

Director/ Editor

Three Stories of Life… ―I am honoured to be with you today at your commencement from one of the finest

universities in the world. I never graduated from college. Truth be told, this is the closest I've

ever gotten to a college graduation. Today I want to tell you three stories from my life. That's

it. No big deal. Just three stories…

The first story is about connecting the dots.

I dropped out of Reed College after the first 6 months, but then stayed around as a

drop-in for another 18 months or so before I really quit. So why did I drop out? It started

before I was born. My biological mother was a young, unwed college graduate student, and

she decided to put me up for adoption. She felt very strongly that I should be adopted by

college graduates, so everything was all set for me to be adopted at birth by a lawyer and his

wife. Except that when I popped out they decided at the last minute that they really wanted a

girl. So my parents, who were on a waiting list, got a call in the middle of the night asking:

"We have an unexpected baby boy; do you want him?" They said: "Of course." My biological

mother later found out that my mother had never graduated from college and that my father

had never graduated from high school. She refused to sign the final adoption papers. She only

relented a few months later when my parents promised that I would someday go to college.

And 17 years later I did go to college. But I naively chose a college that was almost as

expensive as Stanford, and all of my working-class parents' savings were being spent on my

college tution. After six months, I couldn't see the value in it. I had no idea what I wanted to

do with my life and no idea how college was going to help me figure it out. And here I was

spending all of the money my parents had saved their entire life. So I decided to drop out and

trust that it would all work out OK. It was pretty scary at the time, but looking back it was one

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of the best decisions I ever made. The minute I dropped out I could stop taking the required

classes that didn't interest me, and begin dropping in on the ones that looked interesting.

It wasn't all romantic. I didn't have a dorm room, so I slept on the floor in friends'

rooms, I returned coke bottles for the 5¢ deposits to buy food with, and I would walk the 7

miles across town every Sunday night to get one good meal a week at the Hare Krishna

temple. I loved it. And much of what I stumbled into by following my curiosity and intution

turned out to be priceless later on. Let me give you one example:

Reed College at that time offered perhaps the best calligraphy instruction in the

country. Throughout the campus every poster, every label on every drawer, was beautifully

hand calligraphed. Because I had dropped out and didn't have to take the normal classes, I

decided to take a calligraphy class to learn how to do this. I learned about serif and san serif

typefaces, about varying the amount of space between different letter combinations, about

what makes great typography great. It was beautiful, historical, artistically subtle in a way that

science can't capture, and I found it fascinating.

None of this had even a hope of any practical application in my life. But ten years

later, when we were designing the first Macintosh computer, it all came back to me. And we

designed it all into the Mac. It was the first computer with beautiful typography. If I had never

dropped in on that single course in college, the Mac would have never had multiple typefaces

or proportionally spaced fonts. And since Windows just copied the Mac, it's likely that no

personal computer would have them. If I had never dropped out, I would have never dropped

in on this calligraphy class, and personal computers might not have the wonderful typography

that they do. Of course it was impossible to connect the dots looking forward when I was in

college. But it was very, very clear looking backwards ten years later.

Again, you can't connect the dots looking forward; you can only connect them looking

backwards. So you have to trust that the dots will somehow connect in your future. You

have to trust in something - your gut, destiny, life, karma, whatever. This approach has never

let me down, and it has made all the difference in my life.

My second story is about love and loss.

I was lucky - I found what I loved to do early in life. Woz and I started Apple in my

parent‘s garage when I was 20. We worked hard, and in 10 years Apple had grown from just

the two of us in a garage into a $2 billion company with over 4000 employees. We had just

released our finest creation - the Macintosh - a year earlier, and I had just turned 30. And then

I got fired. How can you get fired from a company you started? Well, as Apple grew we hired

someone who I thought was very talented to run the company with me, and for the first year

or so things went well. But then our visions of the future began to diverge and eventually we

had a falling out. When we did, our Board of Directors sided with him. So at 30 I was out.

And very publicly out. What had been the focus of my entire adult life was gone, and it was

devastating.

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I really didn't know what to do for a few months. I felt that I had let the previous

generation of entrepreneurs down - that I had dropped the baton as it was being passed to me.

I met with David Packard and Bob Noyce and tried to apologize for screwing up so badly. I

was a very public failure, and I even thought about running away from the valley. But

something slowly began to dawn on me - I still loved what I did. The turn of events at Apple

had not changed that one bit. I had been rejected, but I was still in love. And so I decided to

start over.

I didn't see it then, but it turned out that getting fired from Apple was the best thing

that could have ever happened to me. The heaviness of being successful was replaced by the

lightness of being a beginner again, less sure about everything. It freed me to enter one of the

most creative periods of my life.

During the next five years, I started a company named NeXT, another company named

Pixar, and fell in love with an amazing woman who would become my wife. Pixar went on to

create the world‘s first computer animated feature film, Toy Story, and is now the most

successful animation studio in the world. In a remarkable turn of events, Apple bought NeXT,

I returned to Apple, and the technology we developed at NeXT is at the heart of Apple's

current renaissance. And Laurene and I have a wonderful family together.

I'm pretty sure none of this would have happened if I hadn't been fired from Apple. It

was awful tasting medicine, but I guess the patient needed it. Sometimes life hits you in the

head with a brick. Don't lose faith. I'm convinced that the only thing that kept me going was

that I loved what I did. You've got to find what you love. And that is as true for your work as

it is for your lovers. Your work is going to fill a large part of your life, and the only way to be

truly satisfied is to do what you believe is great work. And the only way to do great work is to

love what you do. If you haven't found it yet, keep looking. Don't settle. As with all matters of

the heart, you'll know when you find it. And, like any great relationship, it just gets better and

better as the years roll on. So keep looking until you find it. Don't settle.

My third story is about death.

When I was 17, I read a quote that went something like: "If you live each day as if it

was your last, someday you'll most certainly be right." It made an impression on me, and since

then, for the past 33 years, I have looked in the mirror every morning and asked myself: "If

today were the last day of my life, would I want to do what I am about to do today?" And

whenever the answer has been "No" for too many days in a row, I know I need to change

something.

Remembering that I'll be dead soon is the most important tool I've ever encountered to

help me make the big choices in life. Because almost everything - all external expectations, all

pride, all fear of embarrassment or failure - these things just fall away in the face of death,

leaving only what is truly important. Remembering that you are going to die is the best way I

know to avoid the trap of thinking you have something to lose. You are already naked. There

is no reason not to follow your heart.

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About a year ago I was diagnosed with cancer. I had a scan at 7:30 in the morning, and

it clearly showed a tumor on my pancreas. I didn't even know what a pancreas was. The

doctors told me this was almost certainly a type of cancer that is incurable, and that I should

expect to live no longer than three to six months. My doctor advised me to go home and get

my affairs in order, which is doctor's code for prepare to die. It means to try to tell your kids

everything you thought you'd have the next 10 years to tell them in just a few months. It

means to make sure everything is buttoned up so that it will be as easy as possible for your

family. It means to say your goodbyes.

I lived with that diagnosis all day. Later that evening I had a biopsy, where they stuck

an endoscope down my throat, through my stomach and into my intestines, put a needle into

my pancreas and got a few cells from the tumor. I was sedated, but my wife, who was there,

told me that when they viewed the cells under a microscope the doctors started crying because

it turned out to be a very rare form of pancreatic cancer that is curable with surgery. I had the

surgery and I'm fine now.

This was the closest I've been to facing death, and I hope it's the closest I get for a few more

decades. Having lived through it, I can now say this to you with a bit more certainty than

when death was a useful but purely intellectual concept:

No one wants to die. Even people who want to go to heaven don't want to die to get

there. And yet death is the destination we all share. No one has ever escaped it. And that is as

it should be, because Death is very likely the single best invention of Life. It is Life's change

agent. It clears out the old to make way for the new. Right now the new is you, but someday

not too long from now, you will gradually become the old and be cleared away. Sorry to be so

dramatic, but it is quite true.

Your time is limited, so don't waste it living someone else's life. Don't be trapped by

dogma - which is living with the results of other people's thinking. Don't let the noise of

others' opinions drown out your own inner voice. And most important, have the courage to

follow your heart and intution. They somehow already know what you truly want to

become. Everything else is secondary.

When I was young, there was an amazing publication called The Whole Earth Catalog,

which was one of the bibles of my generation. It was created by a fellow named Stewart

Brand not far from here in Menlo Park, and he brought it to life with his poetic touch. This

was in the late 1960's, before personal computers and desktop publishing, so it was all made

with typewriters, scissors, and polaroid cameras. It was sort of like Google in paperback form,

35 years before Google came along: it was idealistic, and overflowing with neat tools and

great notions.

Stewart and his team put out several issues of The Whole Earth Catalog, and then

when it had run its course, they put out a final issue. It was the mid-1970s, and I was your age.

On the back cover of their final issue was a photograph of an early morning country road, the

kind you might find yourself hitchhiking on if you were so adventurous. Beneath it were the

words: "Stay Hungry, Stay Foolish." It was their farewell message as they signed off. Stay

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Hungry, Stay Foolish. And I have always wished that for myself. And now, as you graduate to

begin a new, I wish that for you.

Stay Hungry. Stay Foolish.

Thank you all very much.‖

--------------

"दझ् ख की पऩछरी यजनी फीच पवकसता सझख का नवर प्रबात, एक ऩयदा मह झीना नीर छछऩामे है जजसभें सझख गात।

जजसे तझभ सभझ ेहो अभबशाऩ, जगत की ज्वाराओॊ का भ र- ईश का वह यहस्म वयदान, कबी भत इसको जाओ ब र।

पवषभता की ऩीड़ा से व्मक्त हो यहा स्ऩॊददत पवश्व भहान, मही दझख -सझख पवकास का सुम मही ब भा का भधझभम दान।

छनुम सभयसता का अधधकाय उभड़ता कायण जरधध सभान, व्मथा से नीरी रहयों फीच बफखयत ेसझखभणणगण द्मझछतभान।

शजक्त के पवद्मझु कण जो व्मस्त पवकर बफखये हैं, हो छनरूऩाम, सभन्वम उसका कये सभस्त पवजछमनी भानवता हो जाम।"

- जयशंकर प्रसाद (“काभामनी “ भहाकाव्म के ‘श्रद्धा’ सगग से)

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ASSET MANAGEMENT IN GOVERNMENT SECTOR Vivek Tripathi

As assets held by government are valuable, their custody and control assume a greater significance. Equally important is the need to

provide for their maintenance and timely replacement. In era of public &

private collaboration, many valuable assets are transferred conditionally to

private enterprises where effective ownership vests with government. So

information about the existing stocks, assets transferred, the cost of use, the need for

replacement, is therefore, vital for decision making and to protect public assets from misuse

and encroachment. It is seen that assets are the crucial parts of a private enterprise's very

existence and its financial and operational viability. Little wonder, then that the entire

accounting and internal control in private sector revolves around the management of assets.

However assets in the public sector are seen to be peripheral in their importance even though

they play an equally key role in delivery of services.

Lack of commercial considerations on part of public sector need not be a reason for

assets to be relegated to secondary position. So getting the act together on asset management

has its imperatives. Firstly government holds large number of valuable assets in trust on

behalf of its citizen. So proper upkeep and safety of these assets is a fundamental

responsibility of government. Secondly, notwithstanding non-commercial motive of

government, it still needs to know how efficiently it is delivering the services, which is

possible only when cost of use of assets is taken into consideration. Thirdly, proper planning,

maintenance and replacement of assets is possible only when there is a proper assets register

framework.

Asset Management in Government: Need and Objective Assets held by government, form bulk of the wealth of a nation. These assets mainly

include tangible assets like land, building, vehicles, roads, bridges, canals, ports, culverts,

work of arts, heritage structure, natural resources like forest, mines & intangible assets like

intellectual property rights, in house developed software etc. Unlike corporate assets,

deployed for generating revenues, public assets are used by government in delivery of public

services like health; education etc. and some assets like natural resources and heritage

buildings are held in trust on behalf of the people.

In the absence of an adequate assets management system, the following problems may

occur:-

Recognition of assets.

Failure to identify surplus assets.

Author is presently posted as Assistant Director in Institute of Financial Management

Training & Research, Uttar Pradesh, Lucknow

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Deteriorating physical condition and resultant fall in quality of assets and thus services delivery.

Poor use of valuable assets.

Continuing maintenance of unproductive assets.

Valuation of an assets held by government. The benefits generated in future is the main attribute of assets held by a public

authority or private enterprises For private enterprise the only future benefit provided by an

asset is its economic value to contribute directly or indirectly to future net cash inflow.

However government which holds enormous assets traditionally lacked focus on assets. Now

governments are realizing that proper management of their assets would help them improve

public infrastructure thus attracting higher rate of investment in their regions. Good public

assets management practices not only reduce the risk of loss but also the unnecessary burden

on the taxpayers. One of the contributory factors for poor asset management in government

sector is the fact that most governments follow single entry, cash based accounting system

which does not capitalize assets. Consequently, financial statements do not capture assets

owned by the government though assets physically exist and economic benefits flow from

them. On the other hand, under the accrual based accounting system, assets are capitalized and

their values are reflected in the financial statements. Therefore it is necessary to have physical

verification of assets. Not surprisingly, many government properties are encroached upon

causing not only financial loss to government but also damage to eco-system. Thus, the larger

issue is one of protecting government assets from loss and misuse. In this scenario, one of the

key components in asset management is to have asset register which is by and large

overlooked by the government departments.

Asset Management: Current Practices in State Government

Financial management of the state is governed by detailed procedures laid down in

various Financial Hand Books, Budget Manual and Treasury Manual etc. For example F.H.B.

Vol. V, Part-1 deals with ‗Accounts Rules‘ applicable to all government offices in Uttar

Pradesh. It talks about ‗Stores‘ and related procedures regarding purchase and disposal

(Chapter XII & Appendix XVIII, F.H.B. Vol. V, Part-1). It also mentions the term ‗works‘

alongwith its classification and execution (Chapter XIII, F.H.B. Vol. V, Part-1). But none of

these chapters define ‗Assets‘.

Again F.H.B. Vol. VI deals with ‗Public Works Accounts Rules‘. It also mentions the

terms ‗Store‘, ‗Tool & Plants‘, ‗Government Buildings‘ (Chapter VIII, Chapter X, F.H.B.

Vol. VI) and ‗Works‘, ‗Contracts‘ (Chapter XII, F.H.B. Vol. VI). In the F.H.B. VI, the assets

have been defined in the context of ‗Works Account‘ as- ―In the accounts of works this term

indicates all outstanding or anticipated creditors, which have to be taken in reduction of final

charges. Eg. Recovery of Advances; Recoverable Payments and Sale proceeds or transfer

value of surplus materials.‖ This definition is not in current perspective as economic-benefits

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related aspects have not been taken into account. So there is a need to define ‗Assets‘ keeping

in mind the accrual based accounting system in government. .

Similarly Financial Handbooks and other reference materials do not provide for any

coding. This is true for almost all state governments as these F.H.B.s and other manuals have

not been renewed and revised adequately. As the state government is aggressively promoting

creation of infrastructure through Public-Private Partnership (PPP), such ventures will pose a

major risk without necessary asset-monitoring framework.

APPROACH TO ASSET MANAGEMENT IN GOVERNMENT:-

In order to have an effective asset management in government, policies related to

various aspects of assets need to be looked into.

Asset Management Policy Framework: Policies are those statements which reflect

government‘s intentions. The general practice is to develop policy document however some

countries (like South Africa) have passed legislation in this respect –

Any policy document regarding ‗Assets‘ must cover following aspects-

Definition of Assets.

Classification of Assets.

Addition to Assets.

Numbering & Coding of Assets.

Capitalization criteria.

Custodial Responsibilities.

Depreciation.

Valuation of Assets.

Jointly Owned Assets.

Leased Assets.

Transfer of Assets.

Disposal of Assets.

Enumeration of Assets.

Utilization of Assets.

Monitoring and Control. Not all the items mentioned above regarding policy document of assets need to be put

in place in the beginning yet a well thought policy is required to be a pre-requisite for

preparation of Asset Register as first step.

Defining ‘Asset’ for Asset Register:

For the purpose of ‗Asset Management in government‘, the term 'Assets' may include

all assets whether movable or immovable. The immovable may include tangible ‗capital

assets‘ and ‗infrastructure assets‘. Here the ‗assets register‘ does not cover financial assets

such as investments and intangible assets such as copyright, patent etc.

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The assets held by government should have the following characteristics -

They have a useful life beyond an accounting period.

They are not items of stores, meant for consumption such as stationery, spare etc.

They are owned/controlled by the government/semi-government entity.

They include movable and immovable assets.

They are normally employed for delivering government services.

In above mentioned characteristic the control of assets is usually evidenced by an

entity's -

ability to use the assets to achieve its objectives.

ability to restrict access to the asset.

ability to transfer the asset to another entity.

ability to dispose off the assets.

obligation to bear the risk with holding it.

In Assets Register, the record of controlled or portable asset can be maintained.

Confiscated assets, assets under dispute etc. do not meet the requirement of asset

definition that an asset is used for delivering public services; therefore such items may not be

included in the asset register.

Assets of agencies sponsored by government may not be included in asset register because

most of these agencies are separate legal entities hence they prepare their own financial

statements in which the entity's assets are reflected.

Some assets components may be treated as asset as they facilitate replacement of

components without replacement of main (core) asset.

Assets involved in Public Private Partnership based on ownership may be included in asset

register. Infrastructure assets may also be included in asset register.

Asset leased by government may be reflected in asset register since operational risks are

transferred to the private party but ownership risks lies with government.

If Special Purpose Vehicle (SPV) is controlled or directly created by the government the

assets are considered to be government owned assets.

Codification:

A codification system to identify each asset with unique number, is one of the

important steps in asset management. Codification of assets requires the asset to be classified

into some meaningful groups. Assets are broadly classified under land, building,

infrastructure, plant & machinery, vehicles, office furniture and equipment and so on. The

following codification structure may be considered-

Land (100-109)

101 Open/ vacant/ usable land.

102 Land with construction

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--- ---

Building (110-119)

111 Building with built up areas of 1000 Sq mtrs.

112 Building with built up areas of 1001-5000 Sq mtrs.

113 Building with built up areas of 5001-10000 Sq mtrs.

--- ---

Infrastructure Road (200-209)

201 National Highway

202 State Highway

--- ---

Infrastructure Bridges (210-219)

211 Minor Bridge

212 Major Bridge

--- ---

Office Vehicle (300-309)

301 By-Cycles

302 Motor Cycle

--- ---

LMV (310-319)

310 Passenger Vehicles

311 Delivery Van

--- ---

MMV (320-329)

321 Bus

--- ---

--- ---

The classification pattern mentioned above for coding purpose is just indicative. A

standard ‗Asset Code‘ can be published as a 'Codification Handbook'. For each approved asset

name the handbook should offer description of its characteristics.

Coding for custodian office: Accountability for assets has to be fixed at the level of office

which directly uses, owns, control or maintain the assets. An informal system of coding can

be based on DDO code.

Tagging the Assets: It is used to identify the assets. One of the most common method could

be colour identification. Tagging should be mandatory for sensitive assets and movable assets.

Bar-coding could be another method of tagging the assets.

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Enumeration of Assets: If asset register is not there for majority of assets, there is need to

first enumerate all these assets. Once the asset register is created through enumeration, it will

be necessary to periodically verify the assets physically to establish their continued existence.

Enumeration of assets is the key process in building the asset register.

Valuation of Assets for Opening Balance Sheet:

The valuation process has to be carried out for assets on particular date. It could be the

last day of the previous financial year. All references to valuation should be made with respect

to this date. The process of valuation could be as follow-

If the asset was purchased/ constructed, it will be valued as per the following order of

preference-

I. If the cost & date of purchase /construction is available then it could be original cost less depreciation provided from the date of purchase/construction to the date of valuation.

II. If the cost is not available/ unascertainable but the date or year of construction/ purchase is ascertainable-

(a) In case of land where the original documents are not available, valuation can be ascertained on transaction value of a similar land in the similar area around the

estimated year of transaction.

(b) If the asset has outlived its estimated useful life, then it could be valued at `1 (c) If the assets have not outlived its useful life, then- Valuation could be based on the Current Standard Cost (CSC) rates. In order to reflect the cost of the asset in the year in which it was purchased the

Current Standard Cost (CSC) will need to be deflated by an appropriate inflation index

to give Deflated Standard Cost (DSC).

Thereafter, the value will have to be depreciated based on the recommended rate of depreciation in order to arrive at the ‗Estimated Book Value‘ of assets, which could be

carried to the Opening Balance Sheet.

(III) If neither the cost nor the date of purchase/ construction is available -

(a) If the asset is beyond its estimated useful life, it could be valued at `1 (b) If the asset is within its useful life, estimation can be made on the basis of its year of

purchase/construction and the procedure ie.- its estimated CSC, DSC and Current

Book Value could be deduced using the standard rates and deflation indices.

(IV) If the asset is received as gift- The asset will be valued at `1 (V) Heritage- Asset could be valued at nominal value of `1

PROPOSED ORGANIZATIONAL FRAMEWORK FOR ASSET MANAGEMENT:

Asset management is a strategic, integrated approach to maintenance that include all

the aspects that affect the productive life of an asset ie. from design to disposal. It is a

proactive process that compliments existing policies by providing strategic focus and

perspective. So there are essentially three broad stages in the life cycle of an asset-

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1. Acquisition of assets. 2. Operation and Maintenance of assets. 3. Disposal of assets.

Asset Management Cell: To have proper asset management, organizations need visibility

into three main areas of planning ie. Short term, medium term and long term planning. These

planned strategies would improve reliability, overall productivity, the length of an asset's life

and ultimately reduce the total cost of asset ownership. However there seems no unified

department in state government to look all aspects of asset management. In most of the

government department/offices the acquisition of asset is the responsibility of the Stores &

Purchase section. Similarly, the accounts department normally records only the financial

transaction and is not concerned with the maintenance and management of the asset.

For these reasons, it may be useful for State Government to set up an Asset

Management Cell centrally at government level. The AMC at government level may be

centrally located and under the charge of Head of Finance Department. This is because the use

of various assets such as land, building etc. has policies implications and these have to be

examined from a larger perspective.

Structure of Proposed AMC: It is imperative to mention that planning for assets is a

specialized and time consuming exercise and most of government departments lack in terms

of either time or human resources so the need of an AMC is justified and it can have

specialized and dedicated staff for exclusively focusing on the various issues related to assets.

The proposed AMC may consists of the following officials-

o Chief Executive Officer/Head- He/She should be preferably a person with expertise and experiences in Asset Management as well as in MIS.

o Procurement officer- He/She should be responsible for planning, scheduling and purchasing.

o Recording officer- To maintain & review the Asset Register as well as to keep track of assets to be disposed off, sale and preparation of various reports, taking into consideration

the depreciation aspect also.

o Maintenance officer- To oversee all planned, scheduled maintenance as well as coordinate with concerned departments to keep all assets in working condition.

o Other staff- As per requirement in due course of time. The AMC officers and staff at the minimum should have formal accounting

qualification. They must be computer literate and proficient in working of softwares like MS

office, Tally etc. and other related aspects of Information Technology.

Function of Proposed AMC

Procurement Planning: To prepare short term and medium term asset acquisition plan in

consultation with the user departments and to present the same with due financial impact

exercises and alternatives for consideration of competent authority. Besides this, the plan for

acquisition of approved assets, timeliness, benchmarks are to be taken into account.

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Asset Acquisition: To assist and facilitate the purchase to carry out procurement.

Recording & Reporting:

(i) to create, maintain and update an asset tracking database with respect to the condition,

location and other parameters as per requirement.

(ii) To develop, update and maintain a database related to capital work- in process and

generate necessary MIS there from.

(ii) To develop, maintain and update the Fixed Asset Register to record all fixed assets related transactions.

(iii) To maintain the register of impaired assets and assets scheduled for disposal with due attention to computation of value in use and salvage value.

Maintenance:

(i) To prepare planned maintenance and oversee its implementation.

(ii) To prepare plans for major repairs, renovation and modification.

Disposal of Asset:

(i) To prepare and follow through the annual disposal plan for fixed assets.

(ii) To prepare asset renewal plan which will feed into the capital procurement plan.

This AMC can be replicated at Directorate level also to oversee the management of

asset at field level.

Asset Management : Reforms & Experiences of Other Countries

Britain has prepared a department wise ‗National Asset Register‘ which lists assets not only owned by the departments directly but also those owned by non departmental public

bodies. Assets are listed in the asset register along with their location.

Australia has similarly developed an ‗Asset Management Manual‘ that provides the framework for the identification, acquisition, accounting and maintenance of government

owned assets.

New Zealand has a decentralized system of Asset Management. Each council and individual department of the state at the local level is responsible for proper identification

and recording of its assets.

Canada has developed a nationwide policy online registers of the various assets it owns, their valuation, acquisition and disposal.

Countries like Chilie & Botswana have also put in place the ‗Asset Management Framework‘.

Republic of South Africa has passed a legislation ie. ‗Government Immovable Asset Management Act, 2007‘. Although the Act refers to immovable assets, it actually captures

the essence of asset management and are relevant to all types of asset.

France began to codify and institutionalize reform efforts in year 2002.

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ACTION PLAN FOR ASSET MANAGEMENT IN GOVERNMENT:

All the state government has been spending enormous funds on creation of fixed assets

over the years. Even in Uttar Pradesh, the assets are scattered all over the state and presently

there is no systematic record of these assets with details such as ‗cost of acquisition‘, ‗cost of

construction‘, ‗type of assets‘, ‗life of assets‘ etc. The lack of proper records regarding assets

could lead to irregularities and therefore as part of Public Financial management, it is

necessary to have an action plan to put a proper asset management framework in place. This

will ensure the effective switchover to accrual based system of accounting. The following

steps may be taken as per action plan-

Action to be taken by government:

Workshop/ seminar/ discussion with departments Policy and organizational framework by government. Criteria to consider assets for inclusion in the ambit of asset management ie. Amendment

of FHBs etc. to define assets.

Framework of asset register. A database structure for asset register. Creation of an Asset Management Cell. Codification and preparation of related Handbook. Allotment of office code to different offices which act as custodian of assets in their

offices.

Issue of methodology for the valuation of different assets. Holding discussions with PWD, Irrigation, Forest departments at regular interval to

ascertain types of assets held by them that are required to be captured in the asset register.

Initiative to develop software for asset register.

Action to be taken by AMC :

Preparation of an 'Asset Manual' Preparation of guidelines. Preparation of training module. Simultaneous work on valuation methodology to be adopted. Control & Coordination with various administrative department as well as directorate

level.

Research & timely incorporation of new techniques/methodology.

Action to be taken by Head of department:

Creation of Asset Management Section in their headquarters for guiding the preparation of asset register in departments as well as subordinate offices.

Training of personnel for enumeration for future data to be entered into software whenever it is available.

Training regarding accrual based accounting system.

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26

The government might chose to implement the asset register framework in phases on

pilot basis in two departments and then study the feedback. If results are up to the mark then it

may be replicated in other department in due course of time.

In this proposed asset management framework, the asset captured in asset register and

its valuation will provide basic data in proposed switchover from cash based government

accounting to accrual based government accounting as recommended by 12th & 13th Finance

Commission of India. Once this asset management framework gets streamlined it would help

in providing linkages to decision making based on asset performance, asset maintenance,

capital budgeting and debt management.

----------------------

References: (1) „Accounting for Fixed Assets‟, Raymond H. Petersian, John Wiley & sons. (2) 'Govt Accounting-A Re examination', N.D. Gupta & Naveen Gupta, The Chartered

Accountant, Nov, 2002, ICAI.

(3) Government Immovable Asset Management Act 2007, Republic of South Africa. (4) „Managing Government Property Assets‟, Ulga Kaganova, James Mckellar & George

Peterson.

(5) Asset Register Framework, GOAP,CGG, Hyderabad. (6) Fixed Asset Policies & Procedure Manual, http://moneysoft.com. (7) National Municipal Account Manual, GOI. (8) „Roadmap for Accrual Accounting‟, http://www.gasab.gov.in. (9) „Operational Framework for Accrual Accounting‟ http://www.gasab.gov.in. (10) „Operational guidelines for Accrual based Reporting‟ http://www.gasab.gov.in.

“The most common source of mistakes in management decisions is the emphasis on finding the right answers rather than the right questions.”

-Peter Drucker

http://moneysoft.com/http://www.gasab.gov.in/http://www.gasab.gov.in/

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INDIA AND GLOBALISATION: A MYTHICAL DREAM OR

A NEW HORIZON Pooja Raman

INTRODUCTION

―Globalisation is the new buzzword that has come to dominate the

world since the nineties of the last century… With increased reliance on

the market economy and renewed faith in the private capital and resources,

a process of structural adjustment spurred by the studies and influences of

the World Bank and other International organisations have started in many

of the developing countries. Also Globalisation has brought in new opportunities to

developing countries. Greater access to developed country markets and technology transfer

hold out promise improved productivity and higher living standard. But globalisation has also

thrown up new challenges like growing inequality across and within nations, volatility in

financial market and environmental deteriorations. Another negative aspect of globalisation is

that a great majority of developing countries remain removed from the process. Till the

nineties the process of globalisation of the Indian economy was constrained by the barriers to

trade and investment liberalisation of trade, investment and financial flows initiated in the

nineties has progressively lowered the barriers to competition and hastened the pace of

globalisation.‖

- Bimal Jalan, Governor, Reserve Bank of India (1997- 2003)

There is a debate all over the globe about the pros and cons of "globalization". There is

hardly any important global meeting which does not witness vigorous protests by the

opponents of the globalization process. Equally, on the opposite side, there are those who

regard it as a panacea for all the world‘s problems and key to unmixed prosperity and well

being for all the countries and their people. But, the only rational view is to accept it as an

emerging and powerful global reality which has a momentum of its own. It is more important

to ensure that we maximize the advantages therein for our country and minimize the risks

involved. This article attempts to address the myths & realities about India‘s Globalization

and raise people‘s awareness on the potential benefits of Globalization and the challenges

lying therein to the Indian economy.

INDIA: POPULATION STATISTICS

India has more arable land area than any country except the United States, and more

water area than any country except Russia, Canada and United States. Indian life revolves

mostly around agriculture and allied activities in small villages, where the overwhelming

Author is presently posted as Assistant Accounts Officer in Office of Cane Commissioner,

Uttar Pradesh, Lucknow

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majority of Indians live. A demographic profile of a nation is a quick peep into the quantity

and quality of its human resource. To put in simple words, the size of the population, density,

growth rates, literacy rates, sex ratio etc. depict the available workforce, skilled/ unskilled

labour, dependency ratios (a ratio of dependent to working age population), etc. besides

providing an insight into various other aspects like pressure on the basic amenities available,

standard of living, quality of life besides steering the economic growth of a nation. India‘s

population in 1901 was about 238.4 million (23.84 crores), which has increased by more than

four times in mere 110 years to reach a population of 1.21 billion (121 crores) in 2011

comprising 623.7 million (62.37 crores) males and 586.5 million (58.65 crores) females.

India‘s total population is equal to the combined population of the United States, Indonesia,

Brazil, Pakistan, Bangladesh and Japan put together. As per the provisional data from the

census released on March 31, 2011 India added 181.5 million (18.15 crores) to its population

since 2001, slightly lower than the entire population of Brazil. 2001-2011 is the first decade

(with the exception of 1911-1921) which has actually added lesser population compared to the

previous decade. With a population growth rate of only 1.41%, India ranks 93rd in the world.

With 2.4% of the world's surface area India accounts for 17.5 % of world‘s population. China

being the most populous nation of the world accounts for 19.4 per cent of the global

population. Indian population makes for more than a sixth of the entire world‘s population,

meaning that every 6th

person on Earth is a resident of India.

Among the states and UTs, Uttar Pradesh is the most populous (199 million) followed

by Maharashtra (112 million), Lakshadweep is the least populated at 64,429. During 2001-

2011, as many as 25 States/UTs with a share of about 85% of the country's population

registered an annual growth rate of less than 2%. The percentage decadal growth rates of the

six most populous States have declined during 2001-2011 compared to 1991-2001: Uttar

Pradesh (25.85% to 20.09%), Maharashtra (22.73% to 15.99%), Bihar (28.62% to 25.07%),

West Bengal (17.77 % to 13.93%), Andhra Pradesh (14.59% to 11.10%), Madhya Pradesh

(24.26% to 20.30%). The highest population density is in Delhi's north-east district (37,346

per sq km) while the lowest is in Dibang Valley in Arunachal Pradesh (just 1 per sq km). In

2011, male- female sex ratio in India is 940 meaning, there are 940 females per 1000 males in

the country. Three major States- J&K, Bihar & Gujarat, have shown decline in sex ratio

compared to 2001- Census. Kerala (1084) has the highest sex ratio followed by

Puducherry(1038), Daman & Diu (618) has the lowest sex ratio while, amongst states

Haryana (877) has the lowest sex ratio. The total number of children in the age-group 0-6 is

158.8 million (-5 million since 2001). The proportion of Child Population in the age group of

0-6 years to total population is 13.1% while the corresponding figure in 2001 was 15.9%. The

latest child sex ratio is 914 female children against 1,000 male children—the lowest since

Independence. Literacy rate is one of the key parameters of socio-economic progress of

modern society. India has the largest school age population in the world. Literacy rate is of

India has increased to stand at 74.04% (82.14% for males & 65.46% for females) from

64.83% in the last decade with a decadal growth rate of 9.21%. i.e., literates constitute 74% of

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29

the total population aged seven and above. Complete population results are expected to be

released in 2012.

India still has a positive birth rate of 22.22 births/1,000 population (2009 estimate), a

low death rate of 6.4 deaths/1,000 population (2009 estimate) & a decent life expectancy of

69.89 yrs; meaning that the size of the workforce will continue to grow for the foreseeable

future. India has more than 50% of its population below the age of 25 and more than 65%

hovers below the age of 35. According to CIA World Factbook 2009, the median age of India

was 25.1 yrs as compared to world‘s 28.4 yrs. It is expected that, in 2020, the average age of

an Indian will be 29 years, compared to 37 for China and 48 for Japan; and, by 2030, India‘s

dependency ratio should be just over 0.4; lower the ratio more the jobs. A rising workforce

helps to increase saving and investment. It also enables increased productivity. As evident

from the above data, Demographics of India are favorable to an overall development and

growth.

INDIA & HUMAN DEVELOPMENT INDEX

The Human Development Index (HDI) is a comparative measure of life expectancy,

literacy, education and standards of living for countries worldwide. It is a standard means of

measuring the impact of economic policies on quality of life besides measuring the overall

well-being, especially child welfare. It is a composite statistic used to rank countries by level

of "human development" and distinguish them as "very high human development", "high

human development", "medium human development", and "low human development"

countries. The original index was developed in 1990 by Indian economist Amartya Sen

and Pakistani economist Mahbub ul Haq. Nobel laureate Amartya Sen‘s work on capabilities

and functioning‘s provided the underlying conceptual framework. Progress on the Human

Development Index (HDI) is often cited in national and international debates as a benchmark

of a country‘s progress on key development indicators.

Human Development Index as included in the United Nations Development

Programme's Human Development Report (released on 2 Nov. 2011), compiled on the

basis of estimates for 2011, covers 185 member states of the United Nations (out of 193),

along with Hong Kong (of the People's Republic of China), and the Palestinian

territories; 8 UN member states are not included due to lack of data. The average HDI of

regions of the World and groups of countries are also included for comparison.

All the countries of the world can be broadly categorized into four broad human

development categories or quartiles, each of which comprises 47 countries:

1. Very High Human Development, 2. High Human Development, 3. Medium Human Development and 4. Low Human Development (46 countries in this quartile)

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Some older groupings (high/medium/low income countries) have been removed that were

based on the gross domestic product (GDP) in purchasing power parity (PPP) per capita,

and have been replaced by another index based on the gross national income(GNI) in

purchasing power parity per capita. In the 2011 Human Development Report, the HDI

combines three dimensions:

A long and healthy life: Life expectancy at birth

Education index: Mean years of schooling and Expected years of schooling

A decent standard of living: GNI per capita (PPP US$)

Over half of the world's population lives in countries with "medium human

development" (51%), while less than a fifth (18%) populate countries falling in the "low

human development" category. Countries with "high" to "very high" human development

account for less than a third of the world's total population (30%).

India is ranked 134 as per the HDI of 2011, falling in the quartile of the medium

human development countries. Having been ranked 119 out of 169 countries in 2010, the

nation‘s position remained unchanged as per the measurement techniques utilised. But the

new report for 2011 says it is misleading to compare values and rankings with those of

previously published reports, because the underlying data and methods have changed, as well

as the number of countries included in the Human Development Index.

HDI components INDIA‘S RANK for 134

HEALTH Life expectancy at birth (in years) 66.8

EDUCATION Education index (mean years of schooling) 0.450

INCOME GNI per capita in PPP terms (constant 2005 global $) 3,468

INEQUALITY Inequality adjusted HDI 0.392

POVERTY Multi dimensional Poverty Index (%) 0.283

GENDER Gender inequality index 0.617

SUSTAINABILITY Adjusted net savings (% of GNI) 24.1

DEMOGRAPHY Population, both sexes (thousands) 1,241,492

The Global Gender Gap Index included in the World Economic Forum Report 2009

that examines the gap between men and women in four fundamental categories: economic

participation and opportunity, educational attainment, political empowerment and health and

survival revealed India's dismal position. Out of 134 countries surveyed, India is among the

lowest ranked countries at the 114th position. Women, as half of the human capital of India,

will need to be more efficiently integrated into the economy in order to boost India's long-

term competitive potential. India holds last place among the BRIC countries on the Index,

behind Russia (51), China (60) and Brazil (82). In South Asia, the sub-continent is in second-

to-last place behind Sri Lanka (16), Bangladesh (94) Maldives (100), Nepal (110) and ahead

of Pakistan.

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HDI & Global Gender Gap Index values show dismal progress with respect to the

human development and quality of life. With the 2nd

largest population in the world, India‘s

human resource is way underdeveloped & unorganized. The process of globalization hasn‘t

helped much to develop the huge base of population. This indicates the lopsided direction of

the socio-economic growth of our nation.

―It has been globally acknowledged that liberal democracy and faster economic

growth are the true remedies reducing poverty and thereby improving the human development

index,‖

- Mr Anand Sharma, Minister of Commerce, Industry and Textiles, GOI [keynote address at

the Inaugural Session of „The Partnership Summit 2012‟ organized by the Confederation of

Indian Industry (CII) in association with the Department of Industrial Policy & Promotion,

GOI and Govt. of Andhra Pradesh, with the theme of “New Age Innovation Partnerships”.]

INDIA: GLOBAL STANDING

Before we look at our opportunities and challenges from globalisation, it is good to be

certain of facts – where exactly India is in terms of globalisation.

S. No. Category Global Ranking

1 Area 7th

2 Population 2nd

3 Population Growth Rate 93rd

4 Labour Force 2nd

5 GDP (nominal) [economic survey 2010-11] 10th

6 GDP (PPP) [economic survey 2010-11] 4th

7 GDP (nominal) per capita 138th

8 GDP (PPP) per capita ($ 3,339) [economic survey 2010-11] IMF,129th

9 GDP (real) growth rate 5th

10 Human Development Index 134th

11 Ease of doing Business Index 133rd

12 Index of Economic freedom 124th

13 Exports 17th

14 Imports 11th

15 Current Account Balance 169th

16 Foreign Exchange Reserves 6th

17 USD Exchange Rates 12th

18 External Debt 26th

19 Public Debt 29th

20 Electricity Consumption 5th

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21 Mobile Phone Users 2nd

22 Internet Users 4th

23 Motor Vehicle Production 7th

24 Military Expenditure 10th

25 Active troops 3rd

26 Rail Network 4th

27 Road Network 3rd

As is obvious there are certain parameters where India has fared well and are standing

at par with the developed countries, yet there are certain other major parameters that show

there‘s still a long road to cross over from developing to the developed world.

INDIA: THE ECONOMIC SCENARIO

From the dawn of history to the Eighteenth century, the world was essentially

Malthusian. Improvements in technology and capital investments were always overtaken by

population growth; the number of people slowly increased, but their average standards of

living did not. Till the end of the 19th

century, the per capita incomes of Western countries like

England, Germany, France and the United States were increasing on a sustained basis. During

this entire period, the then so-called under-developed or Third World countries continued to

be exporters of primary products and importers of industrial products with stagnant or even

declining per capita incomes. A large number of them were also colonies of the Western

powers, and the connection between these two situations- the colonial state and income

stagnation was not missed by their leaders and intellectuals. And hence, Economic growth that

raised living standards is a modern invention in the history of economic growth.

After India's Independence from the British, social democratic policies governed with

large public sectors, high import duties and lesser private participation characterizing it. The

economy was then characterized by extensive regulation, protectionism, public ownership,

pervasive corruption and slow growth. The Indian economy was in major crisis in 1991 when

foreign currency reserves went down to a meager $1 billion and inflation was as high as 17%.

Fiscal deficit was also high and NRI's were not interested in investing in India.

In early 1990s the Indian economy had witnessed dramatic policy changes. The idea

behind the new economic model known as Liberalization, Privatization and Globalization

in India (LPG), was to make the Indian economy one of the fastest growing economies in the

world. Post- liberalization, India adopted free- market principles and liberalized its economy

to international trade. The continuing economic liberalization since has moved the country

towards a market-based economy. A revival of economic reforms and better economic policy

in first decade of the 21st century accelerated India's economic growth rate. In recent years,

India has continued to liberalize business regulations. Following these strong economic

reforms, the country's economic growth progressed at a rapid pace with very high rates of

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growth and large increases in the incomes of people. This growth is also broader: agriculture

is rebounding, manufacturing continues its momentum, and private services is picking up.

Fundamentals are also stronger: savings and investment are up, exports are rising rapidly, and

inflation is falling, after a prolonged hiatus. All this growth was led primarily due to a huge

increase in the size of the middle class consumer population, a large workforce comprising

skilled and non-skilled workers, good education standards and considerable foreign

investments.

The Economy of India is the 10th

largest in the world with respect to the nominal

Gross Domestic Product (GDP) and the third largest by purchasing power parity (PPP) as

estimated by the IMF. India‘s GDP has touched US$ 1.73 trillion at current price in 2010.

India‘s GDP crossed over a trillion dollar mark in 2007 that has put it in the elite group of 12

countries with trillion dollar economy and is worth nearly 2.79% of the world economy,

according to the World Bank. The global lists prepared by World Bank (2005- 2010) & CIA

World Factbook (1993-2010) each placed India 4th

in the world in GDP (PPP) in million $.

India‘s GDP is likely to quadruple over a period of 10 years. Edelweiss Report states that

India is likely to be a US$ 4.5 trillion (Rs. 205 trillion) economy over the next decade. World

Bank‘s, World Development Indicators last updated as on Dec 13, 2011 shows an upward

trend in the GDP growth rate since 1990- 5.53%, 2000- 4.03% & in 2010- 9.72% and India

accounted for about 32.9% share of world GDP in 2009. India recorded the highest growth

rates in the mid-2000s. By 2008, India had established itself as the world's 2nd

-fastest growing

major economy in the world only next to China. The tremendous growth rate has coincided

with better macroeconomic stability. The country‘s GDP has been growing at an average rate

of 8.5% for the last 5 years. A country‘s gross domestic product (GDP) is a good indicator of

the standard of living within that country. As the world‘s largest democracy and a rising

power, India has gradually begun to play a larger role on the international stage. The country

is a part of the G-20 major economies and the BRICS, in addition to being partners of

the ASEAN. With India's economic pace picking up, global commodity prices have staged a

comeback from their lows and global trade has also seen healthy growth over the last two

years.

India is an emerging economy which has witnessed unprecedented levels of economic

expansion, alongside China, Russia, Mexico and Brazil. India is a cost effective and labor

intensive economy, and has benefited immensely from outsourcing of work from developed

countries, and has a strong manufacturing and export oriented industrial framework. India‘s

growth story is completely different from China‘s. India's growth is largely consumer-led & is

centered on "imported" out-sourced jobs, especially in high-technology areas, and domestic

demand. Only 20% of India‘s economy is driven by exports. This is very UN-like China

which has followed the "export-led" East Asian growth strategy pioneered by Japan after

World War II.

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GDP Unit / Scale 2010 2011 (IMF estimates)

GDP, current prices USD / billions 1537.96 1704.06

GDP, per capita, current prices USD / scale 1264.83 1382.40

GDP, purchasing-power-parity (PPP) Current international $ / billion 4060.39 4447.75

GDP, (PPP) per capita GDP Current international $ / units 3339.30 3608.19

The estimated level of GDP at constant 2004-05 prices at cost factor (real GDP) in

2010- 11 was composed of rebounded growth of 5.4% in agriculture, marginally increased

growth of 8.1% in industry, and a slightly decelerated growth of 9.6% in services. Among

India‘s economical make-up, agriculture plays an important role in the fabric of society. The

diverse economy encompasses traditional village farming, modern agriculture, handicrafts, a

wide range of modern industries, and a multitude of services.

Sector percentage distribution of the Labor force

(CIA World Factbook 2009 estimates)

Contribution to GDP (in %

2008 estimates)

Agriculture 52% 17.2%

Industry 14% 29.1%

Services 34% 53.7%

India's Gross National Income per capita had experienced astonishing growth rates

since 2002. According to to World bank‘s World Development indiactors GNI per capita

(PPP) rose from mere 890 US$ (1990) to 1550 US$ (2000) and further to 3560 US$ (2010).

India's Per Capita Income has tripled from 2002–03 to 2010–11, averaging 14.4% growth over

these eight years. It is further expected to go up to $ 1440 during 2011–12 fiscal. Per capita

income is calculated by evenly dividing the national income among the country's population.

India ranks 2nd

globally in farm output. Agriculture and allied sectors like forestry,

logging and fishing accounted for 16.21% of the GDP in 2010 which is a steady decline of its

share in the GDP yet; it is the largest economic sector and plays a significant role in the

overall socio-economic development of India. Yields per unit area of all crops have grown up

since 1950, due to the special emphasis placed on agriculture in the early five-year plans and

steady improvements in irrigation, technology, application of modern agricultural practices

and provision of agricultural credit and subsidies since the green revolution.

India is the largest producer in the world of milk, jute, pulses, cashew nuts, coconuts, tea,

ginger, turmeric, and black pepper; banana & sapota fruits too. It also has the world's largest

cattle population (193 million). It is the 2nd

largest producer of wheat, rice, sugar, groundnut

and inland fish. India is the 2nd

largest fruit and vegetable producer, accounting for 10.9% and

8.6% of the world fruit and vegetable production respectively. India is also the 2nd

largest

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producer and the largest consumer of silk in the world, producing 77,000 million tons in 2005.

It is the 3rd

largest producer of tobacco.

The industrial sector is one of the main sectors that contribute to the Indian GDP. The

country ranks 14th

in the factory output in the world. The industrial sector is made up of

manufacturing, mining and quarrying, and electricity, water supply, and gas sectors. Industrial

Production in India increased 5.9 percent in Nov., 2011 (World Bank). Industrial production

measures changes in output for the industrial sector of the economy which includes

manufacturing, mining, and utilities. Industrial Production is an important indicator for

economic forecasting and is often used to measure inflation pressures as high levels of

industrial production can lead to sudden changes in prices. From 1994 until 2010, India's

industrial production averaged 7.49 percent reaching an historical high of 17.70 percent in

December of 2009 and a record low of -0.20 percent in December of 2008. The reasons for

the increase of Industry Growth Rate in India GDP are that huge amounts of investments are

being made helping the industries to grow. Also, the consumption of the industrial goods has

increased a great deal in the country, which in its turn has boosted the industrial sector. In

addition to this, the industrial goods are being exported in huge quantities from the country.

The focus of attention in conventional economics was on production of goods – manufactured

products and agricultural commodities. India stands 14th

in the world in factory output. As per

the latest estimates, manufacturing sector, in addition to mining, quarrying, electricity and gas

together account for 27.6% of the GDP and employ 17% of the total workforce. Six core

industries that have large bearing on infrastructure and have a combined weight of 26.7 % in

the IIP registered a growth of 6.6% (provisional) in December, 2010 compared to 6.2% in

December, 2009.

India‘s Automobile Sector is the 7th

largest in the World. Ever since the economy

opened up, the auto sector has shown phenomenal growth. Almost 1.7 crore private vehicles

were registered in India last year. The industry, which aims to almost triple its size to US$ 115

billion by 2020, envisages annual capital investment of up to US$ 3 billion. India is expected

to become the world‘s 3rd

largest automobile market by 2030. The Indian automotive industry

comprises of 2 segments- automobiles & auto component suppliers which had an estimated

total turnover of USD 45 billion in 2008- 09. The country is expected to emerge as a low cost

manufacturing hub for small cars & auto components. What‘s propelling this success is

India‘s 250 million strong Middle- class population which is on a consumption overdrive. But

it is the potential of Luxury car segment (those costing above 12 lakhs) that is already a billion

dollar market in India that will drive further growth in this sector. The Government plans to

set up Rs 2,500 crore (US$ 476.19 million) development fund for the auto component sector.

A most remarkable feature of the so-called "New Economy" is the "Services

Revolution" is a related development to Globalization. Services (of which transport,

communication, trade, banking, construction and public administration & the Information

Technology sector are a part) have been India‘s engine of growth, source of income and

employment. India stands 15th

in services output. Service industry employs English-speaking

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36

workers on the supply side and on the demand side, has increased demand from foreign

consumers interested in India's service exports or those looking to outsource their

operations. Services are the major source of economic growth, accounting for more than half

of India's output with less than one third of its labor force.

Earlier the growth of services was perceived at best as a by-product of developments

in the primary and secondary sectors, and at worst as a drag on the prospects for long-term

economic growth. In the last few years, there has been a phenomenal change in the

conventional view of services and their role in the economy. This change has been facilitated

by unprecedented and unforeseen advances in computer and communication technology. As a

result, the development of certain services is now regarded as one of the preconditions of

economic growth, and not as one of its consequences. The service sector is contributing more

than half of the Indian GDP. It takes India one step closer to the developed economies of the

world. Earlier it was agriculture which mainly contributed to the Indian GDP.

The boundary between goods and services is also disappearing. Many industrial

products are not only manufactured, but they are also researched, designed, marketed,

advertised, distributed, leased and serviced. An important aspect of the "services revolution"

is that geography and levels of industrialisation are no longer the primary determinants of the

location of facilities for production of services. Physical distances have become meaningless.

It must be recognised that the "death of distance" and the growing integration of global

product, services and financial markets in recent years has also presented new challenges for

management of the national economy – not only in India but all over the world. As a result,

the traditional role of developing countries is also changing – from mere recipients to

important providers of long-distance and high value services.

The Growth Rate of the Infrastructure Sector in India GDP increased after the Indian

government opened the sector to 100% foreign direct investment (FDI). This was done in

order to boost the Infrastructure Sector in the country. Infrastructure services are deepening

rapidly, as are service delivery standards, thanks to rising and accelerated investment (with

rates roughly doubling over the Eleventh Plan period)---from aviation, roads and

telecommunications to ports, railways and power. The Government of India has set ambitious

targets for more than US$ 1 trillion to be invested in infrastructure over the Twelfth Five Year

Plan—more than double the amount invested in the previous five-year period.

India has made remarkable progress in information technology, high end services and

knowledge process services. India's IT industry, despite contributing significantly to

its balance of payments, accounts for only about 1% of the total GDP or 1/50th of the total

services. The ITES-BPO sector has become a big employment generator especially amongst

young college graduates. The number of professionals employed by IT and ITES sectors is

estimated at around 1.3 million as on March 2006. Also, Indian IT-ITES is estimated to have

helped create an additional 3 milli

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