..FINANCIAL INCLUSION..

Financial inclusion
Financial inclusion or inclusive financing is the delivery of financial services at affordable costs to sectionsof disadvantaged and low income segments of society. Unrestrained access to public goods and services is the sinequa non of an open and efficient society. It is argued that as banking services are in the nature of public good, it is essential that availabilityof banking and payment services to the entire population without discrimination is the prime objective of public policy. Theterm "financial inclusion" has gained importance since the early 2000s, and is a result of findings about financial exclusion and its direct correlation to poverty. Financial inclusion is now a common objective for many central banks among the developing nations.
The Reserve Bank of India hasset up a commission (Khan Commission) in 2004 to look into financial inclusion and the recommendations of the commission were incorporated into the mid-term review of the policy (2005–06). In the report RBI exhorted the bankswith a view of achieving greater financial inclusion to make available a basic"no-frills" banking account. InIndia, Financial Inclusion first featured in 2005, when it was introduced, that, too, from a pilot project in UT of Pondicherry, by K C Chakraborthy, the chairman of Indian Bank. Mangalam Village became the first village in India where all households were provided banking facilities. In addition to this KYC (Know your Customer) norms were relaxed for people intending to open accounts with annual deposits of less than Rs. 50,000. General Credit Cards (GCC) were issued to the poor and the disadvantaged with a view to help them access easy credit. In January 2006, the Reserve Bank permitted commercial banks to make use of the services of non-governmental organizations (NGOs/SHGs), micro-finance institutions and other civil society organizations as intermediaries for providing financial and banking services.

These intermediaries could be used as business facilitators (BF) orbusiness correspondents (BC) by commercial banks. The bank asked the commercial banks in different regions to start a 100% financial inclusion campaign on a pilot basis. As a result of the campaign states or U.T.s like Pondicherry , Himachal Pradesh and Kerala have announced 100% financial inclusion in all their districts. Reserve Bank of India’s visionfor 2020 is to open nearly 600million new customers' accounts and service them through a variety of channels by leveraging on IT. However, illiteracy and the low income savings and lack of bank branches in rural areas continue to be a road block to financial inclusion in many states. Apart from this there are certain in Current model which is followed. There is inadequate legal and financial structure. India, being a mostly agrarian economy, hardly has schemeswhich lend for agriculture. Along with microfinance we need to focus on

..Inclusive growth..

Inclusive growth as the literal meaning of the two words refers to both the pace and the pattern of the economic growth. The literature on the subject draws fine distinction between direct income redistribution or shared growth and inclusive growth. The inclusive growth approach takes a longer term perspective as the focus is on productive employment rather than on direct income redistribution, as a means of increasing incomes for excluded groups. Inclusive growth is, therefore, supposed to be inherently sustainable as distinct from income distribution schemes which canin the short run reduce the disparities, between the poorest and the rest, which may have arisen on account of policies intended to jumpstart growth. While income distribution schemes can allow people, to benefit from economic growth in the short run, inclusive growth allows people to “contribute to and benefit from economic growth”.
The ‘inclusive growth’ as a strategy of economic development received attention owing to a rising concern that the benefits of economic growth have not been equitably shared. Growth is inclusive when it creates economic opportunities along with ensuring equal access to them. Apart from addressing the issue of inequality, the inclusive growth may also make the poverty reduction efforts more effective by explicitly creating productive economic opportunities for the poor and vulnerable sections ofthe society. The inclusive growth by encompassing the hitherto excluded population can bring in several other benefits as well to the economy. The concept “Inclusion” should be seen as a process of including the excluded as agents whose participation is essential in the very design of the development process, and not simply as welfare targets of development programmes (Planning Commission, 2007).

Economics and climate change

Economics and climate change
What role should economists then play in the fight against climate change? As with all other economic problems, economists have formed and advocated normative economicpolicies to mitigate the effects of climate change, which have generated great debate. It is important to understand these debates and decide on the most effective measures. In future, economic analysis should hopefully yield new estimates of mitigation benefits and improve our understanding of costs in the presence of various market distortions. It should also create better tools for making policy choices under uncertain conditions, and alternate mechanisms for good environmental policy. A better and more comprehensive understanding of the economics of climate change would greatly enhance the formulation and implementation of a range of innovative climate change policies at domestic and international levels.
Conclusion The effects of climate change will have far reaching impacts on our lives, and there is no doubt that it is an uphill task to resolve this global issue. While the debate over the economics of climate change remains heated and there are no clear answers as to the best means of mitigating the effects of climate change, it is nevertheless a positive sign that citizens and countries around the world recognise theseverity of the problem of climate change. Indeed, many countries have pledged to join the fight against global warming by reducing their greenhouse emissions and adopting environmentally friendly policies, including China, one of the world’s largest emitters of greenhouse gases.
On a micro level, firms and consumers have also rallied toward recognised the importance of building a sustainable environment for our future. Firms have adopted cleaner technology while consumers have displayed greater environmental awareness and activism, such as by switching to more fuel efficient cars. Governments have also recognised the importance of building a sustainable blueprint for the future. International agreements such as the Kyoto Protocol also show the urgent need for global cooperation. It is hoped that the United Nations Climate Change conference in Copenhagen this December would lead to a newinternational agreement on climate change, as the Kyoto Protocol expires in 2012. Will our actions today translate intoa cleaner and greener future? Perhaps only posterity can tell. Nevertheless, it is crucial to take action now to create a better environment for ourselves and future generations.

Debate -DCs and LDCs..Global Warming

There is debate over the contributions of developed (DCs) versus that of less developed countries (LDCs). While DCs argue that LDCs should reduce their emissions, LDCs counter that since DCs had first emitted pollutions, and that a certain amount of pollution is needed for economic growth. Limiting big polluters in some countries but not others will diminish theimpacts of caps as firms may relocate existing and new production of CO2-emitting industries to countries with no limits. This is known as carbon leakage, and may lead to tradeanarchy. Carbon Taxes An alternative to the cap and trade system is the levying of carbon taxes. Carbon taxes serve two functions. First, theypunish bad behaviour by making polluters bear the full costs of their actions. Second, they reward environmentally friendly practices, thus encouraging a shift toward such practices. Elementary economics tells us that any negative externalities should be taxed to align private incentives with social costs and benefits and to serve as a disincentive to future bad behaviour. Thus, if the government imposed a tax on carbon-based products, firms would have an incentive to shift their production away from pollution and the emission of carbon (which are negative externalities) should be taxed. Furthermore, firms and consumers would have an incentive to shift their production and consumption toward environmentally-friendly practices. Advocates ofcarbon taxes include economists such as Greg Mankiw, Gary Becker and Alan Greenspan. They have argued that carbon taxes raise large revenues which governments can use to reduce other unpopular and more distorting taxes, or finance spending programs.
However, carbon taxes have never been used internationally, that they are politically difficult to establish because consumers and businesses dislike taxes, and that they do not establish an actual firm limit on emissions. Cap and Trade versus Carbon Taxes While both cap and trade and carbon taxes aim to reduce harmful emissions, a carbon tax avoids the process of allocating allowances to countries internationally and among companies domestically. Carbon markets are susceptible to corruption, especially in LDCs, where legal frameworks are not well established. Even in DCs, politics may get in the way of good policy as big businesses and special interest groups may lobby to obtain a larger carbon credit. A carbon tax, on the other hand, offers less opportunity for corruption because it does not create artificial scarcities and monopolies.
On the other hand, cap and trade allows governments to control the quantity of emissions produced, thus providing certainty. Some havesuggested auctioning carbon permits. This solves the problem of how to allocate carbon credits as firms bid for the price they are willing to pay to pollute, thus reflecting the price that firms place on pollution. However, this is a relatively new idea, and has not been widely implemented yet. For now, it is unclear which is a better system, though there is a slight preference among economists for the use of carbon taxes. Nevertheless, regardless of which policy is implemented, the details of the policy, such as its costs and benefits, valuation of costs, social and political considerations and thenature of the industry, must be carefully examined.

However, carbon taxes have never been used internationally, that they are politically difficult to establish because consumers and businesses dislike taxes, and that they do not establish an actual firm limit on emissions. Cap and Trade versus Carbon Taxes While both cap and trade and carbon taxes aim to reduce harmful emissions, a carbon tax avoids the process of allocating allowances to countries internationally and among companies domestically. Carbon markets are susceptible to corruption, especially in LDCs, where legal frameworks are not well established. Even in DCs, politics may get in the way of good policy as big businesses and special interest groups may lobby to obtain a larger carbon credit. A carbon tax, on the other hand, offers less opportunity for corruption because it does not create artificial scarcities and monopolies.
On the other hand, cap and trade allows governments to control the quantity of emissions produced, thus providing certainty. Some havesuggested auctioning carbon permits. This solves the problem of how to allocate carbon credits as firms bid for the price they are willing to pay to pollute, thus reflecting the price that firms place on pollution. However, this is a relatively new idea, and has not been widely implemented yet. For now, it is unclear which is a better system, though there is a slight preference among economists for the use of carbon taxes. Nevertheless, regardless of which policy is implemented, the details of the policy, such as its costs and benefits, valuation of costs, social and political considerations and thenature of the industry, must be carefully examined.