Infrastructure & Social Infrastructure

• Infrastructure:
  • Energy: India aims to achieve 500 GW of renewable energy capacity by 2030 (current capacity ~175 GW).
  • Power: Total installed capacity is 409.4 GW (FY24), with renewable energy contributing around 27%.
  • Transport:
    • Roads: India has 63 lakh km of roads.
    • Railways: Total rail network is 67,000 km, handling 8 billion passengers/year.
    • Airports: India has 141 operational airports.
• Social Infrastructure:
  • Health: Ayushman Bharat covers over 50 crore individuals, aiming to provide ₹5 lakh insurance to eligible families.
  • Education: India spends about 3.1% of GDP on education, with the National Education Policy 2020 focusing on reforms.
  • Family Welfare: Mission Parivar Vikas and various maternal health schemes are part of social infrastructure.

Economic Reforms & Foreign Trade

• Foreign Trade Policy (FTP):
  • New FTP (2023-28) focuses on $2 trillion export target by 2030.
  • Major sectors targeted: Agriculture, Textiles, IT services, and Pharmaceuticals.
• World Bank, IMF, ADB:
  • World Bank: Projected India's economy to grow at 6.3% in FY 2024.
  • IMF: Global growth projected at 2.9%, India’s economy continues to be a bright spot.
  • ADB: Supports infrastructure projects in India, with $1.5 billion in loans for renewable energy projects in 2023.
• BRICS:
  • India actively engages in BRICS for better economic cooperation with Brazil, Russia, China, and South Africa, focusing on trade and investment.

 Issues Facing the Indian Economy

• Poverty Alleviation:
  • Poverty headcount ratio at 10.2% (FY2023).
  • Pradhan Mantri Awas Yojana (housing for all) and PMGAY aim to lift millions out of poverty.
• Jobless Growth:
  • India’s unemployment rate is at 7.4% (2024), with a mismatch between growth and job creation.
• Rising Inequality:
  • Gini coefficient* for income inequality is increasing. The top 1% earn more than 20% of total income.
• Migration:
  • Internal migration has increased, with rural-to-urban migration rising for better economic opportunities.
  • External migration also growing, particularly to the Gulf countries.
• Pandemic Situation:
  • The economy contracted by 7.3% during COVID-19, but recovery is underway with 6.3% growth in FY 2024.

*The Gini coefficient (or Gini index) is a measure of income inequality within a country or a population. It is represented by a value between 0 and 1.India's Gini coefficient for income inequality is around 0.35 to 0.37

Microfinance Landscape & NBFCs

• Microfinance:
  • Loans disbursed: Over ₹2.2 lakh crore in FY 2023.
  • Beneficiaries: Mainly women and rural entrepreneurs.
• Non-Banking Financial Companies (NBFCs):
  • Assets of NBFCs: Over ₹40 lakh crore.
  • These play a vital role in the financial inclusion of underserved sections of society.
• Shadow Banks:
  • NBFCs are considered shadow banks as they do not have access to regular banking funds but provide credit to MSMEs and underserved sectors.

Insurance Companies & Reforms

• Insurance Companies:
  • Premium income of the life insurance sector reached ₹7.6 lakh crore in FY 2023.
  • Health insurance policies are gaining prominence with increasing government schemes like Ayushman Bharat.
• Reforms:
  • Banking Reforms: Introduction of Bad Banks to address NPAs, and EASE (Enhanced Access and Service Excellence) reforms aim to improve customer experience in public sector banks.
  • Public Sector Banks' capital infusion of ₹50,000 crore by the government.

Bad Banks & Infrastructure Financing

• Bad Banks*:
  • The National Asset Reconstruction Company (NARCL) was set up to manage and resolve stressed assets worth ₹2 lakh crore.
• Infrastructure Financing:
  • National Bank for Financing Infrastructure and Development (NABFID): Allocated ₹10,000 crore for infrastructure development in FY 2024.

*A bank or other organization, known as a "bad bank," buys hazardous and illiquid assets from other banks and financial organizations, which have become a liability.

National Infrastructure Pipeline (NIP)

• NIP:The National Infrastructure Pipeline (NIP) is a government initiative in India to improve infrastructure development across the country: 
• Objective: To provide equitable access to infrastructure for the public 
• Projects: Includes greenfield and brownfield projects across economic and social infrastructure 
• Duration: 2020–2025 
• Total outlay: ₹108.88 trillion 
• Implementation: Projects are implemented by all the states and Union Territories of India and 22 infrastructure ministries 
• Benefits: Will improve project preparation, attract investments, and help India become a $5 trillion economy by FY25