Prepaid payment instruments are methods that facilitate purchase of goods and services against the value stored

on such
instruments. The value stored on such instruments represents the value paid for by the holder, by cash, by debit to a bank
account, or by credit card.[1]
The prepaid instruments can be issued as smart cards, magnetic stripe cards, internet accounts, online wallets, mobile
accounts, mobile wallets, paper vouchers and any such instruments used to access the prepaid amount.[1]

Categories of Prepaid Payment Instruments[edit]

The prepaid payment instruments that can be issued in the country are classified under following categories:[1]
Closed System Payment Instruments[edit]
These are payment instruments issued by a person for facilitating the purchase of goods and services from him/her/it.
Closed wallets are wallets which are issued by a company to a consumer for buying goods and services exclusively from
that company. Examples: Amazon Wallet, Cleartrip Wallet [2]
Semi-Closed System Payment Instruments[edit]
These payment instruments are redeemable at a group of clearly identified merchants that contract specifically with the
issuer to accept the payment instrument. These instruments do not permit cash withdrawal or redemption by the holder.
Example: Mobikwik Wallet [2]
Semi-open System Payment Instruments[edit]
These are payment instruments that can be used to purchase goods and services at any card-accepting merchant locations
(Point of sale terminals). These instruments do not permit cash withdrawal or redemption by the holder.
Open System Payment Instruments[edit]
These payment instruments can be used for purchase of goods and services and also permit cash withdrawal at ATMs,
Merchant Local Locations, and automated business correspondents. Examples: Visa, Mastercard, RuPay [2]
Mobile Prepaid Instruments[edit]
These are prepaid talk time instruments issued by mobile service providers. This talk time value can also be used to
purchase 'value added service' from the mobile service provider or third-party service providers.

Economy] Niti Aayog, Planning Commission: Evolution, Structure, Function

and truckload of Criticism explained
SubscribeEconomy138 Comments3 years Ago
1. Timeline of planning in India
1. Five Year plans: from 1st to 12th
2. Planning Commission: Criticism/Anti-Arguments
2. Niti Aayog: Structure, Membership
1. NITI Aayog: functions, Mandates
2. Functional Comparison: Niti vs PC
3. Niti Aayog: Criticism/Anti-Arguments
4. Allocation of funds to States?
5. Chinese Niti Aayog?
3. Mock Questions

Timeline of planning in India

Visvesvaraya plan in this book “The planned economy of India”. He was an Engineer, Ex-Diwan of Mysore
1934
and Bharat Ratna recipient.

1938 Nehru’s Congress plan. But not implemented due to WW2.

1944 Bombay plan by noted industrialists such as JRD Tata, GD Birla, Kasturbhai Lalbhai et al.

1944 Sriman Narayan Agrawal’s Gandhian plan.

1945 MN Roy’s “people’s plan” – with socialist leanings.

1950 Jayprakash Narayan’s Sarvodaya Plan based on Vinoba Bhave’s philosophy

1950,March
Cabinet resolution to form Planning commission.
15

1952,Aug. National Development council (NDC) made by Cabinet resolution.

2014,Aug. Modi shuts down planning commission.

2015, Jan Government notified the formation of Niti Aayog- National Institution for Transforming India.
 Five Year plans in India

Plan Period theme/Model/target

 Harrod Domar Model

1st 51-56  Main focus: Agriculture, irrigation and power.
 Got more GDP growth than its original target.

 P.C.Mahalanobis Model
2nd 56-61
 Socialist model, Rapid industrialization, heavy industries.

 Sukhmoy Chakraborty and Sanddy

3rd 61-66  Also called “Gadgil Yojana”.
 Failed to achieve its target due to droughts and wars with Pak-China

Holidays 66-69  Holiday declared thanks to #EPICFAIL of 3rd FYP.

 Ashok Rudra-Alon Manney

4th 69-74  growth with stability and self-reliance. [Garibi Hatao came here, says LucentGK]
 #EPICFAIL due to Bangladeshi refugee problem and drought.

 C.Subramaniam and later redrafting by D.P.Dhar

5th 74-79  Originally it was a 10 year long term perspective plan with focus on poverty removal and self-
reliance

 Morarji Desai’s Janta government came up with Rolling plan system – we’ll measure progress
RollingPlan 78-80
every year and make new plans accordingly for next year.

 Poverty removal (Garibi Hatao), IRDP, NREM, TRYSEM etc. [Garibi Hatao came here says
6th 80-85
Ramesh Singh]

 Pranav Mukherjee
7th 85-89
 Focus on employment. Jawahar Rozgar Yojana started.

2 Annual
89-91  Political instability at Centre. Hence only annual plans.
plans

 John W.Miller model.

8th 92-97  PV Narasimha Rao- LPG reforms

9th 97-02
 Growth with social justice and equity. Mostly “indicative” planning.
  #EPICFAIL due to global slowdown after Asian financial crisis.

10th 02-07  8% GDP growth rate, double per capita income in 10 years.

 Theme: “inclusive growth”

11th 07-12  C.Rangarajan framed it with targets: 8-10% growth rate, 70 million new jobs, lower IMR, CMR,
TFR etc.

 Theme: “Faster, More inclusive and sustainable growth”.

 Target growth rates: 9% GDP, 4% Agriculture, 10% Mfg.
12th 12-17  10% reduction in poverty, create 50 million new jobs.
 Get IMR:26, MMR:1000,Child Sex ratio: 950, TFR: 2.1
 Increase mean school years, forest cover, infrastructure investment, rural tele-density.

Planning Commission: Criticism/Anti-Arguments

1. Achieved >9% GDP growth-rate during 2005-07, thanks to American boom prior to sub-prime crisis. But almost all
nations of world experienced high growth. So 9% GDP did not come from Montek’s magic wand.
2. Post sub-prime crisis, failed to evoke the “animal spirit” in Indian economy. GDP-fell, inflation rose during 2008-13
nonstop.
3. Reduced poverty by doctoring the BPL-line. Tendulkar line says 27 crore BPL, if we use Ranga line then 37 crore
BPL. Planning commission brags reducing poverty line on Tendulkar’s parameters.
4. Toothless body, can’t hold State/union/ministries/departments accountable for failing to achieve targets.
5. Hopes that CAG and Public accounts Committee will take care accountability part. But PAC too is pretty much
toothless.
6. Failed to implement land reforms. Faulty policies for MSME, industrialization, Factory-labour law problems.
7. Office manned by Generalist IAS/IES with short tenure; panel members filled with academicians and jholachhap
NGOs. Need subject specialists with international exposure like Rajanbhai.
8. Designed CSS with One size fits all approach and a few extra crores to NE/J&K/Hill-states and LWE. But for long, it
did not use pilot projects / sample testing / interaction with states.
9. Hence, IAY, ICDS etc. programs failed to show tangible result despite pumping crores.
10. They tried to bypass state Governments via NGO-funding, DRDA. Hence States unenthusiastic about implementing
Central-schemes named after you know who.
11. Only in 2013- reforms done like reducing number of Centrally sponsored schemes (CSS), 10% flexifund to states,
direct transfer of money to state consolidated fun etc. But it’s too little too late.
12. Shortcomings in planning commission => new bodies sprung up like PM’s economic advisory council, PM’s project
monitoring group and so on=> more brains=> more lack of coordination.
13. Hence Modi felt that PC is beyond fixing- just like Gotham city and Delhi city.
14. For so many years, Government worked as the “provider of first and last resort”. But, today Indian industry and
service sector has reached on global scale, a neo-middle class has emerged.
15. Times have changed, from being a underdeveloped country in 1950s – India has become a major economic force.
16. Hence our needs have changed- from mere food security to profitable agriculture. In this playground, Government
needs to become an “enabler” rather than a “player”.

And thus Niti Aayog was born.

Niti Aayog: Structure, Membership

 NITI AAYOG: STRUCTURE, COMPOSITION, MEMBERSHIP

Position Planning Commission NITI Aayog

 1950, March 15th

Born  died in 2014, August after 2015, January 1st
Modi became PM.

Chairman Prime minister same

 Last Dy.Chairman was Montek  Free market economist Arvind Panagriya. He was the Chief
Vice Chairman Singh Ahluwalia (Cabinet minister economist of Asian Development bank, and the the brain behind
rank). Rajasthan’s land-labour reform.

 Member-Secretary (IAS)  A secretary level bureaucrat with fixed tenure.

CEO
 Sindhushree Khullar (IAS)  Same Ms. Sindhushree Khullar is the first CEO.

PM can nominate four-Union ministers. Modi has nominated

following:
Ex-officio  Finance Minister
 Planning minister 1. Home
members
2. Finance
3. Railway
4. Agriculture

 Bibek Debroy (Free market economist)

Full time 4-7 full time members, who enjoy
 Dr. V.K. Saraswat (technocrat, missile scientist and Ex-DRDO
members “Minister of State” rank. chief.)

Union ministers for

Special 1. Transport
Invitees 2. HRD
3. Social Justice

+PM can invite other experts as and when needed.

part-time Tech experts from research institutes. Currently none declared.

members Rotational posts.

 Chairman: Prime minister

Governing
 Chief ministers of all states
Council  Lieutenant governors of all Union territories.

ad hoc Will have CMs of states that fall in the region. They’ll be dealing with
Regional specific issue concerning a group of states for example irrigation,
Councils naxal-problem, infrastructure etc.

NITI Aayog: functions, Mandates

 NITI AAYOG: FUNCTIONS & MANDATE

1. Think tank for Government policy formulation.

2. Find best practices from other countries, partner with other desi-videsi bodies to help their adoption in India.
3. Cooperative Federalism: Involve state governments and even villages in planning process.
4. Sustainable development: + Modi’s Zero defect-zero effect (on environment) manufacturing mantra.
5. Urban Development: to ensure cities can remain habitable and provide economic venues to everyone.
6. Participatory Development: with help of private sector and citizens.
7. Inclusive Development or Antyodaya. Ensure SC, ST and Women too enjoy the fruits of Development. (because
Din Dayal said so.)
8. Poverty elimination to ensure dignity and self-respect. (because Poet Tiruvalluvar said so)
9. Focus on 5 crore Small enterprises– to generate more employment for weaker sections.
10. Monitoring and feedback. Midway course correction, if needed.
11. Make policies to reap demographic dividend and social capital.
12. Regional Councils will address specific “issues” for a group of states. Example: Regional Council for drought, Left-
wing extremism, Tribal welfare and so on.
13. Extract maximum benefit from NRI’s geo-economic and Geo-political strength for India’s Development.
 14. Use Social media and ICT tools to ensure transparency, accountability and good governance.
15. Help sorting inter-departmental conflicts.
16. Lot of bol-bachachan giri and vague ideas about national self-interest, capacity-building, participating in ‘global-
village’ etc.

Functional Comparison: Niti vs PC

Planning commission NITI Aayog

Design FYP-Five year plans Design national agenda, and cooperative federalism.

Decide two “money” matters:

 Mostly work as a “policy-formulation-hub”. The Press release is ‘silent’ on

1. How much money to give to each money/funding. so, most probably it’ll be left to finance ministry.
state for centrally sponsored schemes  Some experts believe Inter-state council will decide money allocation to
(CSS) states, then finance ministry will release the fund.
2. How much money to give for each
state’s own state-five-year-plans.

 States/UT were represented in

National Development Council.
 States/UT represented in Governing council. But no specific mention about
 PC framed FYP=>went to
whether they can approve/reject/amend Niti Aayog’s proposals?
Cabinet=>NDC approved FYP=>Tabled
in parliament.

 Press release talks about participatory planning but how exactly will they
One size fits all, top-down socialist do that? No specific details laid out.
 IES officers are rarely invited in Modi’s meetings.
planning by Armchair Nehruvian
 But given the entry of Free market economists and Technocrats, most
economists and IES cadre officers (Indian probably it’ll be an ‘indicative planning + core planning’ i.e. after inputs of
Economic Service). state governments, a broad outline with selected targets, limited subsidies
and monitoring through ICT.

Niti Aayog: Criticism/Anti-Arguments

1. Bibek Debroy (Fulltime member) himself criticized the vaguely worded press-release on Niti-Aayog formation. Modi
should have specifically pointed out its functions and jurisdiction.
2. Modi’s “arbitrary decision” to dismantle the Planning Commission, without taking NDC or states into confidence- this
undermines cooperative federalism. (Says Kerala CM).
3. From union territory only Lieutenant Governors invited. CM of Delhi and Puducherry can’t participate in Governing
council.
4. Like PC, NITI Aayog too is a non-Constitutional, non-statutory body formed by a cabinet resolution. It is not
accountable to parliament, and if line-ministries fail to achieve targets, NITI Aayog cannot punish them.
5. Niti Aayog should have been created through a legal/Constitutional amendment. There should be a perspective plan
spanning for 15 to 20 years. Otherwise, what if another party comes into power and dismantles this? Recall Morarji
vs Indira.
6. It’ll take minimum 6-8 months for Niti Aayog to set things in motion. In between that time, Development will be halted
due to paucity of funds and ideas.
7. Planning commission and NDC decided “special category states” and gave them additional funding to help the poor
and backward regions. With advent of Niti Aayog, will those states lose their ‘status’ and extra-funding? Uncertainty
prevails.
8. Niti Aayog will conflict with Cabinet Secretariat (for inter-ministerial coordination) and constitutional body Inter State
Council (for coordination with states).
9. FinMin officials always try to squeeze budget to keep the fiscal deficit under FRBM targets. Niti Aayog and its free
market economists will further reduce welfare schemes to help them.
10. At present we’ve 60+ centrally sponsored schemes. Modi aims to combine them into just 10 schemes. Thus, poor
and marginalized communities will suffer.
11. Planning commission used to monitor of human development in the States, Sub-plans for women, SC and ST. Niti
Aayog doesn’t say how they’ll do it.
12. Niti Aayog’s mandate repeatedly says they’ll focus on manufacturing sector. Rajanbhai says “just because China
succeeded on manufacturing focus, doesn’t automatically guarantee that same Cinderella story will repeat here.”
13. Modi distributed the planning-Expenditure function to FinMin and subject matters to respective ministries. This will
result in loss of perspective and long-term view. Now State governments will have to lobby at both type of ministries
to get funds released.
14. Planning Commission’s Nehruvian Economists advocated decentralized planning. Modi’s free market economists
and technocrats will pursue centralized planning and e-monitoring. (It is both pro and anti-argument depending on
how brainwashed a person is after reading theHindu.)
15. 1961: Indian Economic Service (IES) was born on Nehru’s initiative. Modi doesn’t invite them in meetings, free
market economists look down upon them with utter disdain. How they’ll be integrated in the new system? No clear
answers given in the press-release.
16. There is no need for any Planning commission or Niti Aayog. Good work can be done even without them- through
line ministries and inter-state councils.

Anyways, the real work of NITI Aayog is yet to begin. So, most criticism is centred around the theme that
“Since press release doesn’t talk about xyz thing- so only bad thing will happen.”. But, only time will tell how
NITI Aayog fares in real life.

Allocation of funds to States?

 Until now, States got funding from two places

Finance  Gave share from Union revenue to states. Decides the formula for every 5 years.
commission  ~2% of GDP flew this way.

Gave two types of funding

Planning 1. Centrally sponsored schemes (~66 schemes). Money given after consultation between PC and
respective ministries of health, education etc. at union and state level.
commission 2. Central assistance for state plans. Money given after consultation between PC, FM and State
Government.

~2.5% of GDP flew this way.

After scrapping the planning commission, Modi wanted the Finance commission to overesee all three types of
“money-allocations” i.e.

1. Share from union taxes

2. CSS: Centrally sponsored schemes
3. Union’s assistance to state’s plans.

But Modi couldn’t do it easily because:

 1. Constitution amendment necessary, to give finance commission these new powers.
2. But the Chairmen of 13th and 14th Finance commission don’t like this additional homework. NOT ONE bit. Because
o Finance commission is a non-permanent body constituted every 5th year, hence it can look at the issues from a
fresh perspective. If its turned into a permanent body- then incrementalist approach will creep in i.e. throwing
more money in existing schemes rather than fixing from scratch.
o Finance commission members are expert in revenue-sharing. But planning Expenditure requires expert members
with development, capital-asset building perspective.
o Gujarat CM even said, Union itself should give the plan-money to states, instead of keeping such ‘backdoor’
mechanism.

Chinese Niti Aayog?

Chinese NDRC India present system

Makes macro-economic policy  Finance ministry makes fiscal policy.

 RBI makes monetary policy.

Approves investment & construction projects CCI, FIPB and many other bodies @union and state level.

Makes Energy & oil policy Oil ministry, DG Hydrocarbon decide it.

Looks after backward provinces in the Western region. Separate ministry for NE Development

Real-Boss: State council headed by President of China. Cabinet Headed by PM.

 Experts thought Modi wanted to replace PC with a body like China’s NDRC. (National Development and reform
commission).
 But Niti Aayog press release and jurisdiction is so vague, it’s nowhere near Chinese NDRC.