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India at 60…Growing and Shining (Part-II)
On 15th August 2006, when Prime Minister Manmohan Singh will address the nation from Rampant of Lal Quila, India will be completing its 59 years of Independence and will be entering into “Diamond Jubilee” year of its existence. Let the celebrations continue for centuries and keep the tri-color high. Before I proceed further I like to share with you the Speech of Pt. Jawahar Lal Nehru delivered on 15th August 1947…Tryst with Destiny…
“Long years ago we made a tryst with destiny, and now the time comes when we shall redeem our pledge, not wholly or in full measure, but very substantially. At the stroke of midnight hour, when the world sleeps, India will awake to life and freedom.
A moment comes which comes but rarely in history, when we step out from the old to the new, then an age ends, and when the soul of a nation, long suppressed, finds utterance. It is fitting that at this solemn moment we take the pledge of dedication to India and her people and to the still larger cause of humanity. At the dawn of history India started on her unending quest, and trackless centuries are filled with her striving and the grandeur of her successes and her failures. Through good and ill fortune alike she has never lost sight of that quest or forgotten the ideals which gave her strength. We end today a period of ill fortune and India discovers herself again.
The achievement we celebrate today is but a step, an opening of opportunity, to the greater triumphs and achievements that await us. Are we brave enough and wise enough to grasp this opportunity and accept the challenge of the future? Freedom and power bring responsibility. That responsibility rests upon this assembly, a sovereign body representing the sovereign people of India. Before the birth of freedom we have endured all the pains of labor and our hearts are heavy with the memory of this sorrow. Some of those pains continue even now.
Continuation from PART-I
Government of India
India is a SOVERRIGN, SOCIALIST, SECULAR, and DEMOCRATIC REPUBLIC. The Constitution of India, which came into force on 26th January 1950, is the supreme law of the land. India has a federal form of government (with a high degree of Centralization) and a bicameral parliament operating under a Westminster-Style parliamentary system. It has three branches of governance: the Legislature, Executive and Judiciary.
For the Union government of India, the President is the Head of State, and has a largely ceremonial role, including interpreting the constitution, signing laws into action, issuing administrative orders and issuing pardons. He is also the Commander-in-chief of India’s Armed Forces. An electoral college elects the President indirectly for five-year terms, consisting of the members of Parliament and of all the state Legislative Assemblies in a very complicated scheme. The Prime Minister is the de facto head of Government, and has most executive powers. He or she is appointed by the President. As a general rule and rather a very strict convention, the President appoints only that person as the Prime Minister who enjoys the support of the majority of the members in the Lok Sabha (the lower house of the Parliament), and serves a five-year term, with re-selection possible.
The legislature of India is the bicameral Parliament (Sansad), which consists of the upper house called the Rajya Sabha (Council of States), and the lower house called the Lok Sabha (House of People). The 245-member Rajya Sabha is chosen indirectly through the state Legislative Assemblies, and has a staggered six-year term. Each state sends members to the Rajya Sabha in a proportion of its population (unlike the Senate of the United States). The 545-member Lok Sabha is directly elected by popular vote for a five-year term, and is the determinative constituent of political power and government formation. All Indian citizens above age 18 are eligible to vote. The Lok Sabha is subject to dissolution by the President but the Rajya Sabha is not.
The executive arm consists of the President, Vice-President and the Council of Ministers (the Cabinet being its executive committee), headed by the Prime Minister. Any minister holding a portfolio must be a member of either house of parliament. In the Indian parliamentary system, the executive is subordinate to the legislature. All ministers are appointed and dismissed by the President on the advice of the Prime Minister. The President is bound to follow the advice of the Council of Ministers while making any executive decision or order, but may ask the Council to reconsider its decision once.
India’s independent judiciary consists of the Supreme Court, headed by the Chief Justice of India–all appointed by the President. The Supreme Court has both original jurisdiction over disputes between states and the Centre, and appellate jurisdiction over the High Courts of India. Each of these states has a tiered system of lower courts. The Supreme Court has the right to declare laws and orders passed by the government as null and void if they are in conflict with the Constitution. Impeachment of the President and the judges of the Supreme Court requires a two-thirds majority in each house of the Parliament. Removal of the Prime Minister requires a simple majority in the Lok Sabha.
The federating states (rajya) of India have a governor as the titular head of the province; a Chief-Minister has the real head of the government (with his council of ministers) and a directly elected Vidhan Sabha (Legislative Assembly) to which he is responsible, and optionally an upper house Vidhan Parishad (Legislative Council). The highest court of a state is its High court, whose judges are appointed by the President and not by the governor. There are 18 appellate High Courts, each having jurisdiction over a state or a group of smaller states. No state has its own Constitution except Jammu and Kashmir. No state has a separate citizenship (in Jammu and Kashmir, there is a constitutional provision of permanent resident of the state).
Economy of a Country is a matter of Choices and not Chances – Indian Economy from 1947-2005
The launching of the First Five Year Plan in April 1951 initiated a process of planned economic development of the country–aiming not merely at raising the standard of living of the people, but also opening out to them new opportunities for a richer and a more varied life. This was sought to be achieved by planning for growth and social justice. Indian economy has come a long way completing its nine Five-Year Plans and launching the tenth Five Year Plan in April, 2002.
First Plan: The first five-year plan focused on Agriculture. During First Five-Year Plan net domestic product went up by 15%. It was due to the fact that the first plan laid foremost priority on agriculture. Per capita income also went up by 8%. Lower increase of per capita income as compared to national income was due the rapid increase in population.
Second Plan: The second five-year plan focused on industry, especially heavy industry. Domestic production of industrial products was encouraged, particularly in the development of the Public Sector.
Third Plan: The planned stress was on agriculture, but due to the Sino-Indian War of 1962 instead of agriculture the focus shifted towards defence and development. China war exposed the weakness of the economy. In 1965 – 66, the Green Revolution was started for the advancement of Indian agriculture. The wars lead to the rise in price in India. Therefore the priority shifted to price stabilization.
Fourth Plan: During the early period of the plan, several droughts affected the economy. Indian Currency was devalued due to rising inflation. Then an annual plan was introduced to resolve immediate problems, but still unemployment and poverty were major problems so this remained the focus of the plan. Another problem rose in 1973 in form of the hike in fuel prices but the focus remained unchanged.
Fifth Plan: 1974-79, Stress on employment poverty removal and justice. Self-reliance with respect to agricultural production and defence. During the 4th and 5th plan, stress was on ratuinal minimum; but it was realized that still poverty plagued the nation. In 1978 the newly elected Janta Government rejected the plan.
Sixth Plan: 1978-1983, called the ” Janta Government Sixth Five Year Plan ” .The new government rejected the “Nehruvian Model” of economy and stressed on village and cottage industries ,natural mobilization of resources, so increase in employment .
Seventh Plan: 1980-1985, the comeback of Indian National Congress Party into power. The stress was on improving productivity level of industries by up-gradation of technology.
Eighth Plan: 1985-1990,Modernizations of industries, gradual opening of economy because of huge deficit and foreign debt. The time period of 1989-91 was a time of political instability for the nation hence no plan was being implemented
Ninth Plan: 1997-2002 The target rate of growth during the plan is proposed to be 7%. India should be able to achieve it because sound base for rapid growth has already been laid in the country.
Tenth Plan: (2002 – 2007) The tenth five year plan gives more importance to empowerment of women, cleanliness of rivers, raising the age of marriage and improve the economic base of India .
India Shinning : Moving forward with Passion and Determination – India in 21st Century
Highlights of Economic Survey -2006-07
1. Economy projected to grow at 8.1% in 2005-06.
2. Modest inflation in spite of spiraling global crude prices.
3. Rapid growth in exports and imports.
4. Faster development of physical infrastructure.
5. Progress in fiscal consolidation.
6. Industry and services propel overall growth of the economy.
7. Industrial resurgence driven by Manufacturing and construction sectors.
8. Broad-based Services sector growth.
9. Total food grains production projected to increase by 2.3% from 204.6 MT in 2004-05 to 209.3 MT in 2005-06.
10. Continued reduction in the incidence of poverty.
11. Pick up in investment and acceleration in growth strengthened in 2005-06.
12. Virtuous cycle of growth and savings likely to continue for some years to come.
13. Policy framework to harness the dormant talent pool of Indian work-force and entrepreneurs to position the economy on a sustained high-growth trajectory suggested.
14. Speedy provision of quality infrastructure through appropriate policy stimulus highlighted.
15. A reversal of the slowdown in the mining sector, particularly coal stressed.
16. Reform of the tax system favored.
The latest Economic Survey in an attempt to prune the fiscal deficit calls for improving the quality of expenditure, better productivity in expenditure and greater growth dividend through deepening the reform process that could harness higher savings and investment.
Regarding the Securities Market, the Survey’s highlights are enlisted as below:
1. Stock Market Index registers returns of 36 per cent in 2005 as against 11 per cent in 2004.
2. Rs. 30,325 crore of resources raised in the primary market for equity in 2005.
3. 55 Initial Public Offerings (IPOs), roughly 4 IPOs every month, issued in 2005.
4. National Stock Exchange and Bombay Stock Exchange retain the world ranking at 3 and 5 respectively.
5. From January 2002 to December 2005, Nifty Index goes up from 1075 to 2837 giving compound returns of 27.45 per cent per annum
6. Nifty Junior Index rise from 1349 to 5541 giving compound returns of 42.36 per cent per annum from January 2002 to December 2005
7. Market capitalization of Nifty at Rs. 13.5 lakh crore and Nifty Junior at Rs. 2.2 lakh crore adds upto Rs. 15.7 lakh crore or roughly two-thirds of the broad Indian equity market at the end of December, 2005
8. Impact cost for doing transactions in the Nifty and Nifty Junior drops steadily and sharply
9. Total equity market turnover goes up from Rs. 43 lakh crore in 2004 to Rs. 60.2 lakh crore in 2005
10. Number of depository accounts at National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL) stands at 85 lakhs
11. Number of depository accounts at NSDL continues to grow rapidly (72,76,300) with the rise of 21.9 per cent in 2005 which corresponds to over 5,000 accounts being opened per working day; 12,70,071 CDSL accounts in 2005.
12. Assets under management of all mutual funds rise to a level of roughly Rs. 2 lakh crore in 2005 in comparison to approximately Rs. 1.5 lakh crore in the previous year.
13. Number of Foreign Institutional Investors (FIIs) rises to 823 and number of sub-accounts stands at 2273 in December 2005
14. Net investments from FIIs on equity spot market rise to Rs. 47,182 crore in 2005 as against Rs. 38,965 crore in 2004
15. Turnover of commodity of futures in the four commodity exchanges of the country rises to Rs. 13.87 lakh crore in 2005
16. In context of Agriculture the Survey highlights are enlisted below.
The Economic Survey for 2005-06 has estimated a growth rate of 2.3% in the agricultural production as against a lower growth rate of 0.7% during 2004-05.
1. The total food grains production is estimated to be 209.3 million tonnes in the year against 204.6 million tonnes in 2004-05.
2. The Kharif production has been estimated at 105.3 million tonnes in 2005-06 against 103.3 million tonnes in 2004-05.
3. The production of Rabi food grains is expected to be around the previous years level of 101.3 million tonnes.
4. The Kharif oilseeds production for 2005-06 is estimated at 14.6 million tonnes as per first advance estimates while Rabi oilseeds production is estimated to reach the target level of 10.4 million tonnes with favorable weather.
5. The sugarcane output is estimated to increase to 257.7 million tonnes in 2005-06 against a level of 232.3 million tonnes in the previous year.
6. The cotton production may come down to 15.9 million tonnes from 17 million tonnes in 2004-05.
7. The Economic Survey terms horticulture, floriculture, organic farming, genetic engineering, food processing, branding and packaging and futures trading as the areas emerging with a potential for high growth.
8. The production of horticulture products was 164 million tonnes in 2004-05, contributing 28% of GDP from agriculture.
9. A shift from the current MSP and Public Procurement System and developing alternative product markets are essential for crop diversification and broad-based agricultural development.
Regarding the Industries highlights, the survey enumerates:
1. Coal, electricity, crude petroleum, refinery throughput, steel and cement that havea direct bearing on infrastructure registered a growth of 4.5 per cent in April-December 2005 as compared to 6.4 per cent registered during the corresponding period of last year.
2. The recently introduced private-public partnership (PPP) model had limited success in the area of electricity and mining and the dominance of the public sector continued.
3. The targets of tele-density levels have been surpassed. The total number of telephones (basic and mobile) rose from 22.8 million in 1999 to more than 125 million at the end of December 2005.
4. The overall figure of tele-density has risen from a mere 2.32 per one hundred populations in 1999 to 11.32 in December 2005.
5. As on November 30, 2005, 6271 Kms of roads under National Highway Development Project with the bulk of 5097 Kms. lying on the Golden Quadrilateral was completed, and another 6179 Kms. was under construction.
6. The cargo handled by the major ports achieved a 12.7 per cent growth up to December, 2005 as compared to 11.3 per cent registered in 2004-05
7. The International airports in Delhi and Mumbai are being modernized and upgraded through private sector participation. Construction work at green field airports of international standards at Hyderabad and Bangalore has commenced and these are likely to be operational by middle of the year 2008.
8. The Survey recommends further liberalization including allowing an associated coal mining company engaged in captive mining to sell excess coal to the appropriate end-user, allocating coal blocks for captive mining through price-based auctions and liberalization of FDI restrictions in joint ventures in captive mining.
9.The survey mentions that the total investment required in infrastructure is enormous and the Committee on Infrastructure, headed by the Prime Minister has estimated the investment requirements as Rs. 1,72,000 crore in the National Highways sector by 2012, Rs. 40,000 crore for Airports by 2010 and Rs. 50,000 crore for Ports by 2012. It is expected that a substantial share of this investment is to come from the private sector.
10.The Survey states that the policies and institutions need to be geared up to meet the specific requirements of the infrastructure sector in the country for which a well defined regulatory architecture has to be set up so as to increase the comfort level of different players in the market.
Countries who got their independence after 1947 are already in the category of “Developed Countries” and we are much behind. I don’t like to justify this by giving reasons and excuses but yes, “Growing Population”, Corruption at “High Level” and “Attitude” of people has made all the difference. We have still done well and we are growing stronger with each passing day. My heartiest CONGRATULATIONS to all my country-mates and people of India. Together we will and we shall take this country on the roads of success, growth and development.
Looking forward to your comments and feedback
With lots of love and care
Sanjeev Sharma (Himachali)
Contact Number: +91-9876328841
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