The President addressed the Parliament on 12 March 2012.  Below are some items from the agenda of the central government as outlined in the speech. Legislation

  • A Bill to eliminate manual scavenging and insanitary latrines shall be introduced in Parliament.
  • New legislation is being considered for persons with disabilities, in order to replace the existing Act.
  • A Bill to provide for a uniform regulatory environment to protect consumer interests, enable speedy adjudication and ensure growth of the real estate sector shall be introduced.
  • A Bill to create a Civil Aviation Authority to ensure safe and affordable air services will be introduced this year.
  • The government is working on legislation for safeguarding and promoting the livelihoods of street vendors.
  • Amendments shall be made to the Child Labour (Prohibition and Regulation) Act to prohibit employment of children less than 14 years of age.
  • Government will aim for early enactment of the Land Acquisition, Rehabilitation and Resettlement Bill.

Workforce Development

  • 1500 new Industrial Training Institutes and 5000 Skill Development Centres shall be set up.  Skill training will be provided to 85 lakh people during 2012-13 and to 800 lakh people during the 12th Plan.
  • A National Mission for Teachers shall be established to improve teacher education and faculty development .
  • The National Urban Livelihoods Mission shall be launched for large-scale skill upgradation, entrepreneurship development and providing wage employment and self-employment opportunities.
  • The expenditure on Research & Development shall be increased from 1 percent to 2 percent of GDP.
  • A Higher Education Credit Guarantee Authority shall be set up in order to provide limited credit guarantees through risk pooling for educational loans.

Health

  • The government will increase national Plan and Non-Plan public expenditure on health to 2.5 percent of GDP by the end of the 12th Plan.
  • The National Rural Health Mission will be converted to a National Health Mission during the 12th Plan, which will also cover urban areas.  Around 7 crore families will be provided health insurance cover under the Rashtriya Swasthya Bima Yojana by the end of the 12th Plan.
  • A Multi-sectoral Nutrition Programme will be launched in 200 districts for maternal and child nutrition needs.
  • A Department for Disability Affairs and the National Council for Senior Citizens shall be set up.

Economy

  • Steps will be taken to reduce the gap of 10 million hectares between irrigation potential created and realized.
  • A scheme for Minimum Support Price for minor forest produce is being considered.
  • A roadmap to double merchandise exports to US$ 500 billion by 2013-14 has been prepared.
  • Public sector banks shall be recapitalized to maintain their financial health.
  • A scheme for promotion of the capital goods industry will be launched during the 12th Plan.
  • Rs 17,500 crore shall be provided to the Delhi Mumbai Industrial Corridor for infrastructure projects.
  • The National Electricity Fund shall be set up to provide interest subsidy on loans disbursed to State Power Utilities.
  • Installed capacity of nuclear plants shall be increased to 10,080 MW from 4,780 MW by the end of the 12th Plan.

Government owned Oil Marketing Companies (OMCs) raised the price of petrol by Rs 6.28 per litre on May 23, 2012.  After the inclusion of local taxes, this price hike amounts to an increase of Rs 7.54 per litre in Delhi.  India met 76 per cent of its total petroleum requirement in 2011-12 through imports.  Petrol prices have officially been decontrolled since June 2010.  However, it has been argued by experts that prices of petroleum products have not been increased sufficiently in order to pass on cost increases to consumers.  The inability to pass on international crude prices to consumers has affected OMCs more in recent months due to the depreciating rupee, which has further increased their losses.  The total under recoveries faced by OMCs for diesel, PDS kerosene and domestic LPG for 2011-12 stands at Rs 138,541 crore.  It was recently announced that the OMCs will receive Rs 38,500 crore from the Ministry of Finance to partially compensate for the high under recoveries. The prices of diesel, LPG and kerosene, which are responsible for the large under recoveries, are unchanged.  Experts suggest that the price hike would have a limited impact on inflation, since petrol has a weightage of around 1 per cent on the Wholesale Price Index, whereas diesel has a weightage of around 4.7 per cent.  The petrol price hike is unlikely to have an impact on the fiscal deficit, since petrol prices are technically deregulated.  Reports suggest that a panel of ministers is due to meet on Friday to discuss diesel, kerosene and LPG prices. In a 2010 report, the Expert Group on "A Viable and Sustainable System of Pricing of Petroleum Products" (Kelkar Committee) observed that given India’s dependence on imports and rising oil prices, domestic prices of petroleum products must match international prices.  It stated that price controls on diesel and petroleum in particular had resulted in major imbalances in consumption patterns across the country.  This had also led to the exit of private sector oil marketing companies from the market, and affected domestic competition.  Its recommendations included the following:

  • Since petrol and diesel are both items of final consumption, their prices should be market determined at both the refinery gate and the retail level.
  • An additional excise duty should be levied on diesel cars.
  • A transparent and effective distribution system for PDS kerosene and domestic LPG should be ensured through UID.
  • Price of kerosene and domestic LPG should be increased by Rs 6/litre and Rs 100 per cylinder respectively.  The prices should be periodically revised based on growth in per capita agricultural GDP (for kerosene) and rising per capita income (LPG).

Reports suggest that a partial rollback of petrol prices might be considered soon.