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THE PLANNING COMMISSION
The Planning Commission is the supreme organ for planning social and economic development in
India. It was established on March 15, 1950. The Prime Minister of India is the ex-officio
Chairman of Planning Commission. The committee members also appoint a Deputy Chairman,
who is the de-facto executive head of the Commission and enjoys the rank of a Cabinet Minister.
The Cabinet Ministers with certain important portfolios act as part-time members of the
Commission, while the full-time members are experts from various fields like Economics,
Industry, Science and General Administration.
The commission works through the following divisions
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General Planning Divisions
Special Planning Divisions
Programme Administration Divisions
The majority of experts in the commission are economists, making the commission the biggest
employer of the Indian Economic Services.
Five Year Plans
The Indian Economy is based on the concept of planning. This is carried through the five-year
plans, developed, executed and monitored by the Planning Commission. The First Five Year plan
was implemented in 1951. The Tenth plan is currently underway.
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First Five Year Plan (1951-56) – The first plan aimed at correcting the distortions caused
to the economy after the World War II.
Second Five Year Plan (1956-61) – The second plan aimed at a pattern of development
leading to a ‘socialist society’ framework for the economy.
Third Five Year Plan (1961-66) – The third plan aimed at achieving the goals enlisted in
the first two plans and also aimed at achieving self-sufficiency in food grains, increase
employment opportunities and expand basic and heavy industries.
Three Annual Plans (1966-69)
Fourth Five Year Plan (1969-74) – The objectives of the fourth plan were to achieve selfreliance, and give priority to agriculture, promote industrial production and exports.
Fifth Five Year Plan (1974-79) – The fifth five year plan aimed at removal of poverty,
attaining economic self reliance and increasing employment opportunities in the country.
Sixth Year Plan (1979-85) – The sixth plan aimed at achieving a annual growth rate of 5.2
per cent and raising the per capita income by 3.3 per cent.
Seventh Five Year Plan (1985-90) – The plan focused on policies and programs to
increase domestic industrial productivity, employment opportunities, and agriculture
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productivity by increasing the basic framework and by adopting modern technologies.
Annual Plans 1990-92
Eighth Five Year Plan (1992-97) – The plan aimed at achieving a higher outlay of public
sector enterprises to meet the demands of various central and state sectors.
Ninth Five Year Plan (1997-02) – The plan aimed to achieve an anual growth rate of 6.5
per cent. The total public sector outlay was Rs. 859000 crore.
Tenth Five Year Plan (2002-07) – This plan has adopted an aggressive approach. This
plan aims at achieving 8 per cent GDP growth, reduce the poverty ratio to 20 per cent,
increase the literacy rate to 72 per cent, reduce the infant mortality rate to 45 per 1000
births and clean all major polluted rivers till the end of the plan in 2007.
Eleventh Five Year Plan (2007-12) – This plan aims to accelerate GDP growth from 8%
to 10% and then maintain at 10% in the 12th Plan in order to double per capita income by
2016-17, increase literacy rate for persons of age 7 years or more to 85%, reduce infant
mortality rate to 28 and maternal mortality ratio to 1 per 1000 live births and ensure
electricity connection to all villages and BPL households by 2009 and round-the-clock
power.
THE MONETARY POLICY
The Monetary Policy, as the name suggests, is the policy used as a tool to regulate the supply of
money in the economy. The basic task of a monetary policy in a developing economy is to meet
the credit needs of the growth sectors on the one hand and to curb the supply of money meant to be
used in non - productive activities like speculative dealings, headging etc. In India, the monetary
policy is regulated by the Reserve Bank of India (RBI). The policy in India is designed on the
principles mentioned above and exercises various quantitative controls to make the policy
effective. The policy is therefore also referred to as the policy of ‘Controlled Monetary Expansion’
which implies
i.
ii.
Expansion in the supply of money.
Restraint on secondary expansion of credit.
The Monetary Policy thus helps the government to exercise control over the money supply in the
economy.
THE FISCAL POLICY
The fiscal policy helps the government exercise a control over the fiscal deficit i.e. the difference
between the total revenue earned and the total expenditure incurred by the government. A rise in
the fiscal deficit implies a higher borrowing for the government from the RBI. The economic
impact of such borrowing is that the money supply in the economy decreases.
The pressure on the money supply leads to an increase of prices i.e. an inflationary situation. So the
government, through a proper fiscal policy tries to maximize revenue sources (taxes) and reduce
expenditure, thereby reducing fiscal deficits.
THE MAJOR PUBLIC SECTOR FINANCIAL INSTITUTIONS
1. The Reserve Bank of India (RBI)
The Reserve Bank of India (RBI) was set up in April 1935, with its central office at Calcutta
(Kolkata) under the Reserve Bank of India Act of 1934, but was permanently moved to Mumbai in
1937. Though originally privately owned, since nationalization in 1949, the RBI is fully owned by
Government of India. Presently, RBI is the central bank of India. It issues notes, buys and sells
government securities, regulates the volume of what direction and cost of credit, manages foreign
exchange, supports other financial institutions and comes out with the Monetary Policy. The RBI is
presently headquartered at Mumbai and the present RBI governor is Dr. Duruvi Subbarao.
2. The Small Industrial Development Bank of India (SIDBI)
SIDBI was established on April 2, 1990. The Small Industries Development Bank of India Act,
1989 envisaged SIDBI to be “the principal financial institution for the promotion, financing and
development of industry in the small scale sector and to co-ordinate the functions of the institutions
engaged in the promotion and financing or developing industry in the small scale sector and for
matters connected therewith or incidental thereto. In the SIDBI charter,four basic objectives were
set out. They are Financing, Promotion, Development, Coordination, for orderly growth of industry
in the small scale sector.
The business domain of SIDBI consists of small scale industrial units, which contribute
significantly to the national economy in terms of production, employment and exports. Small scale
industries are the industrial units in which the investment in plant and machinery does not exceed
Rs.10 million. About 3.1 million such units, employing 17.2 million persons account for a share of
36 per cent of India’s exports and 40 per cent of industrial manufacture. In addition, SIDBI’s
assistance flows to the transport, health care and tourism sectors and also to the professional and
self-employed persons setting up small-sized professional ventures. Mr. Rajendra Mohan Malla is
the present chairman and managing director of the SIDBI.
3. The Industrial Development Bank of India (IDBI)
IDBI was established on July 1, 1964, by an act of the Parliament as a wholly owned subsidiary of
the Reserve Bank of India, to catalyze the development of a diversified and efficient industrial
structure in the country, in tune with national priorities. In 1976, the ownership was transferred
from the RBI to the Government of India. The current Government holding in IDBI is about 53%.
IDBI is currently the tenth largest development bank in the world. It financed some well-known
institutes in India like, the National Stock Exchange of India (NSE), the National Securities
Depository Services Ltd. (NSDL), and the Stock Holding Corporation of India (SHCIL).
To meet the emerging challenges and to keep up with reforms in the financial sector, IDBI
converted into a banking company in 2004, to undertake an entire gamut of banking activities. Mr.
Yogesh Agarwal is the present Chairman and Managing Director of the IDBI bank.
4. The National Bank for Agriculture and Rural Development (NABARD)
NABARD was established on 12th July 1982 to implement the National Bank for Agriculture and
Rural Development Act 1981. It replaced the Agricultural Credit Department (ACD) and the Rural
Planning and Credit Cell (RPCC) of the Reserve Bank of India, and the Agricultural Refinance and
Development Corporation (ARDC).
The following functions are performed by NABARD
i.
ii.
iii.
iv.
Serves as an apex financing agency for the institutions providing investment and
production credit for promoting the various developmental activities in rural
areas.
Takes measures towards institution building for improving absorptive capacity of
the credit delivery system, including monitoring, formulation of rehabilitation
schemes, restructuring of credit institutions, training of personnel, etc.
Co-ordinates the rural financing activities of all institutions engaged in
developmental work at the field level and maintains liaison with the Government
of India, State Governments, the Reserve Bank of India (RBI) and other national
level institutions concerned with policy formulation.
Undertakes monitoring and evaluation of projects refinanced by it.
Shri Umesh Chandra Sarangi is the present chairman of NABARD.
ECONOMIC LIBERALISATION (1991)
The economic liberalisation of 1991 was initiated by the then Indian Prime Minister, Mr. P. V.
Narasimha Rao and his Finance Minister, Mr. Manmohan Singh in response to a balance-ofpayments crisis being faced by the country. The new economic framework adopted by the
government did away with the Licence Raj (investment, industrial and import licensing) system
and ended many public monopolies. The policy aimed at allowing foreign direct investment (FDI)
in many sectors of the economy. Even though the foreign direct investment ceiling was removed
by the government in 1991, it was only in 1996 that foreign investors started showing confidence
in the Indian economy and large sectors saw the inflow of foreign capital.
Since then, the overall direction of liberalisation has remained the same, irrespective of the ruling
party, although no party has yet tried to take on powerful lobbies such as the trade unions and
farmers, or contentious issues such as reforming labour laws and reducing agricultural subsidies.
IMPORTANT SECTORS OF INDIAN ECONOMY
1.
AGRICULTURE
i)
Contribution to GDP
Agriculture forms the backbone of Indian economy. it contributes
approx. 26 percent of Gross Domestic Product. It was 55.4 percent in
1950-51.
Though the agriculture in national income has come down, even now
agriculture contributes a major share of the national income in India.
Further, the share of agriculture in manufacturing and services sector is
increasing.
ii)
Source of Employment
iii)
Agriculture provides employment to around 65 percent of the total
work-force of the country.
Source of Industrial Development
Agriculture has been the source of supply of raw material to our
leading industries.
Many of our small and cottage industries like handloom, weaving, oil
crushing, rice husking, etc. depends on agriculture.
Green Revolution
Indian Green Revolution is associated with the use of HYVS (High Yielding Variety Seeds).
Chemical fertilizers and new technology led to a sharp rise in agricultural production during the
middle of 1960.
The term Green Revolution was given by American Scientist, Dr. William Gande.
During the middle of sixties, Indian agriculture scientists developed a number of new high yielding
varieties of wheat by processing wheat seeds imported from Mexico. A similar improvement in
variety of rice was also observed.
The credit of this goes not only to Nobel Laureate Dr. Norman Borlaug. But also to Dr. M.S.
Swaminathan. Dr. M.S. Swaminathan is also known as the father of the Green Revolution in India.
Second Green Revolution
Of all the plans, the sixth five-year plan was hailed as a great success on the agriculture front. As
against the expected annual growth of 3.8 percent for agriculture, the actual growth rate was 4.3
percent. The production of food grains in 1983-84 was 152 million tones and was hailed by the
Government as the Second Green Revolution.
While the first Green Revolution from 1967-68 arose from the introduction of HYVS of Mexican
wheat and rice, the second Green Revolution from 1983-84 was said to be for the extension in
supplies of inputs and services to farmers, agricultural extension and better management.
While the first Green Revolution was confirmed mainly to Punjab, Haryana, and Western Uttar
Pradesh, the second Revolution has spread to the entire North India.
Other Revolutions
Revolution
Area
Grey Revolution
Egg
Yellow Revolution
White Revolution
Blue Revolution
Oil Seeds
Milk
Fish
Golden Revolution
Horticulture
Pink Revolution
Shrimp
IMPORTANT INDUSTRIES OF INDIA
1.
i)
LARGE SCALE INDUSTRIES
Iron and Steel Industries:
Ist Steel Industry at Kulti near Jhari, West Bengal
Ist large scale steel plant - TISCO at Jamshedpur in 1907 followed by IISCO at Bumpur
in 1919. Both belonged to private sector.
The first public sector unit was ‘Vishveshvaraya Iron and Steel Works’ at Bhadrawati
Public Sector Steel Plants
Location
1. Rourkela (Orissa)
2. Bhilai (Madhya Pradesh)
3. Durgapur (West Bengal)
4. Bokaro (Jharkhand)
5. Burnpur (West Bengal)
Assistance
Germany
Russian Govt.
Britain Govt.
Russian Govt.
Acquired by
Private sector in
1976
Vishakhapatnam (Andhra
Russian Govt.
Pradesh)
7. Salem (Tamilnadu)
8. Vijai Nagar (Karnataka)
9. Bhadrawati (Karnataka)
Nationalization of Vishveshvaraya Iron and
Steel Ltd.
(Owned by Central and State Government)
6.
All these are managed by SAIL. (At present all important steels except TISCO, are under Public
Sector).
Steel Authority of India Limited (SAIL) was established in 1974 and was made responsible for the
development of the steel Industry.
Bhilai, Durgapur and Rourkela were established during the Second Five Year Plan. Bokaro was
established during the Third while the steel plants at Salem, Vijay Nagar, and Vishakhapatnam
were established in the Fourth Five Year Plant.
Presently India is the 8th largest steel producing country in the world.
ii) Jute Industry :
Jute industry is an important industry for a country like India, because not only does it earn foreign
Exchange but also provides substantial employment opportunities in agriculture and industrial
sectors.
Its first modernized industrial unit was established at Reshra in West Bengal in 1855. There are at
present 73 jute mills in India, out of which West Bengal has 59 mills, Bihar 3 mills, Uttar Pradesh
3 mills, Andhra Pradesh 4 mills and Assam, Tripura, Orissa and Madhya Pradesh one each.
The Jute Industry in the Country is traditionally export oriented. India ranks number one in raw
jute and jute goods production and number two in export of jute goods in the world.
iii) Cotton and Textile Industry:
Oldest industry of India, and employs largest number of workers.
It is the largest organized and broad-based industry which accounts for about 4 percent of GDP, 20
percent of manufacturing value added and one-third of total export earnings.
The first Indian modernized cotton cloth mill was established in 1818 at Fort Gloaster near Kolkata
but this mill was not successful. The second mill named ‘Bombay Spinning and Weaving Co.’ was
established in 1854 at Bombay by K.G.N. Daber.
iv) Sugar Industry:
Sugar Industry is the second largest industry after cotton textile industry among agriculture based
Industries in the country.
There are more than 500 installed sugar factories in the country. This industry provides not only
employment to a substantial number of persons but also holds the potential of developing other
industries related to its by-products.
India is now the largest producer and consumer of sugar in the world. Maharashtra contributes over
one-third of the total sugar output, followed closely by Uttar Pradesh, Tamil Nadu and Karnataka
are the other important producers of sugar.
v) Fertilizer Industry:
India is the third largest producer of nitrogenous fertilizers in the world.
There are at present, 57 fertilizer units manufacturing a wide range of nitrogenous and complex
fertilizers, including 29 units producing urea and 9 units producing ammonium sulphate as a byproduct.
vi) Paper Industry:
The first mechanized paper mill was set-up in 1812 at Serampur in West Bengal.
The Paper Industry in India is ranked among the 15 top global paper industries.
vii) Silk Industry:
India is the second largest (first being China) country in the world in producing natural silk. At
present, India produces about 16 percent silk of the world.
India enjoys the distinction of being the only country producing all the five known commercial
varieties of silk, viz. Mulberry, Troical rassal, Oak Tussar, Eri and Muga.
viii) Petroleum and Natural Gas :
First successful oil well was dug in India in 1889 at Digboi, Assam.
For exploration purpose, Oil and Natural Gas Commission (ONGC) was established in 1956 at
Dehradun, Uttranchal.
The total oil reserves in India have been estimated to be about 13 crore tones. Domestic production
of oil in India is much less to meet the domestic demand. India currently produces just over 32
million tons of crude oil against it annual demand of 105 million tones meeting only 30.5 percent
of demand from domestic resources.
Marketing and Distribution of Petroleum Products
Bharat Petroleum Corporation Ltd. (BPCL): By acquisition of Burmah Shell in
1976.
Hindustan Petroleum Corporation Ltd. (HPCL): Established in 1974 by acquiring
the assets of US company ESSO Eastern. In 1976, Government acquired Caltex
Oil Refining Ltd. and merged it with HPCL.
Gas Authority of India Ltd. (GAIL): Established in 1984 for handling postexploration activities relating to natural gas. The company was assigned the
priority task of setting up the cross country HBJ (Hazira, Bijapur, and Jagdishpur)
pipeline. Presently GAIL is the largest company in India for marketing of natural
gas.
a)
b)
c)
NAVRATNAS
In 1997, the Government identified nine leading, well performing and high profit making public
enterprises as Navratnas (Nine Precious Jewels). Later, on the same year, two more were added to
the list.
They have been given special powers including freedom to form new joint ventures, make new
investments and authorized to raise money.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
Indian Oil Corporation Ltd. (IOC)
Bharat Petroleum Corporation Ltd.
(BPCL)
Hindustan Petroleum Corporation Ltd.
(HPCL)
Oil and Natural Gas Corporation Ltd.
(ONGC)
Indian Petrochemicals Corporation
Ltd. (IPCL) {has been privatized}
Steel Authority of India Ltd. (SAIL)
National Thermal Power Corporation
Ltd. (NTPC)
Bharat Heavy Electronics Ltd. (BHEL)
Videsh Sanchar Nigam Ltd. (VSNL)
{has been privatized}
Mahangar Telephone Nigam Ltd.
(MTNL)
Gas Authority of India Ltd. (GAIL)
Two of these Navratnas, IPCL and VSNL, have been privatized.
INSURANCE
Insurance has been an important part of the Indian financial system. Until recently, insurance
services were provided by the public sector, i.e. life insurance by the Life Insurance Corporation of
India and general insurance by the General Insurance Corporation and its four Subsidaries. This
insurance industry was opened to the Private sector in August 2000. After the opening, 12 new
companies have entered life segment and 9 companies in the non life segment.
1. Life Insurance Corporation (LIC)
Established
Head Office
Zonal Offices
:
:
:
Sept, 1956
Mumbai
7 (Mumbai, Kolkata, Delhi,
Chennai, Kanpur, Hyderabad,
Bhopal)
2. General Insurance Corporation (GIC)
Established
: Jan 1, 1973
It has four subsidiary companies:
1.National Insurance Company Ltd., Kolkatta
2.The New India Assurance Co. Ltd., Mumbai
3.The Oriental Fire and General Insurance Co.Ltd., New Delhi
4.United India Fire and General Insurance Co. Ltd., Chennai.
STOCK EXCHANGES
Stock exchange or share market plays a dominant role in mobilizing resources for corporate sector.
It is a market for dealing in shares, debentures and financial securities. In the stock exchange,
shares and debentures are bought and sold for investment as well as for speculative purposes.
There are 24 stock exchanges in the country.
CENSUS-2001
Total Population
:
1,02,70,15,247
Males
:
531,277,078
Females
:
495,738,169
Population Growth
:
21.34%
Males
:
20.93%
Females
:
21.70%
Average Yearly Growth Rate
:
1.93%
Density of population
:
324
Sex Ratio
:
933
Literacy Rate
:
65.38
Males
:
75.85
Females
:
54.16
Life Expectancy
:
62 years
Child Population
:
15.42%
TOP STATES IN IMPORTANT PARAMETERS
MAXIMUM POPULATION
Uttar Pradesh
:
16.6 crore
Maharashtra
:
9.7 crore
Bihar
:
8.3 crore
West Bengal
:
8.0 crore
Andhra Pradesh
:
7.6 crore
Sikkim
:
5.4 lakh
Mizoram
:
8.9 lakh
Arunachal Pradesh
:
10.9 lakh
Goa
:
13.4 lakh
Nagaland
:
19.8 lakh
Nagaland
:
64.41
Sikkim
:
32.98
Manipur
:
30.02
Jammu and Kashmir
:
29.04
Meghalaya
:
29.94
West Bengal
:
904
Bihar
:
880
MINIMUM POPULATION
MAXIMUM DECADAL GROWTH RATE
MAXIMUM POPULATION DENSITY
Kerala
:
819
Uttar Pradesh
:
689
Punjab
:
482
Arunachal Pradesh
:
13
Mizoram
:
42
Sikkim
:
76
Jammu and Kashmir
:
99
Meghalaya
:
103
Kerala
:
1058
Chhatisgarh
:
990
Tamilandu
:
986
Andhra Pradesh
:
978
Manipur
:
978
Haryana
:
861
Punjab
:
874
Sikkim
:
875
Uttar Pradesh
:
898
Jammu and Kashmir
:
900
Kerala
:
90.92
Mizoram
:
88.49
Goa
:
82.32
Maharashtra
:
77.27
Himachal Pradesh
:
77.13
Bihar
:
47.53
Jharkhand
:
54.13
Jammu and Kashmir
:
54.74
Uttar Pradesh
:
57.36
MINIMUM POPULATION DENSITY
MAXIMUM SEX RATIO
MINIMUM SEX RATIO
MAXIMUM LITERACY RATE
MINIMUM LITERACY RATE
MAXIMUM FEMALE LITERACY RATE
Kerala
:
87.86
Mizoram
:
86.13
Goa
:
75.51
Himachal Pradesh
:
68.08
Maharashtra
:
67.57
Bihar
:
33.57
Jharkhand
:
39.38
Jammu and Kashmir
:
41.82
Uttar Pradesh
:
42.98
Arunachal Pradesh
:
44.24
Goa
:
49.77
Mizoram
:
49.5
Tamilnadu
:
43.86
Maharashtra
:
42.4
Gujarat
:
37.35
Himachal Pradesh
:
9.79
Bihar
:
10.47
Sikkim
:
11.1
Assam
:
12.72
Orissa
:
14.97
MINIMUM FEMALE LITERACY RATE
MAXIMUM URBAN POPULATION (%)
MINIMUM URBAN POPULATION (%)
IMPORTANT PARAMETERS OF UNION TERRITORIES
TOTAL POPULATION
Delhi
:
1.3 crore
Pondicherry
:
9.7 lakh
Chandigarh
:
9.0 lakh
Andaman and Nicobar
:
3.5 lakh
Dadra and Nagar Haveli
:
2.2 lakh
Lakshadweep
:
0.6 lakh
Delhi
:
9294
Chandigarh
:
7903
Pondicherry
:
2029
Lakshadwep
:
1894
Daman and Diu
:
1411
Dadar and Nagar Haveli
:
449
Andaman and Nicobar
:
43
Pondicherry
:
1001
Daman and Diu
:
989
Lakshadweep
:
947
Andaman and Nicobar
:
846
Delhi
:
821
Dadar and Nagar Haveli
:
811
Chandigarh
:
773
Lakshadweep
:
87.52
Delhi
:
81.82
Chandigarh
:
81.76
Pondicherry
:
81.49
Andaman and Nicobar
:
81.18
Daman and Diu
:
81.09
Dadar and Nagar Haveli
:
60.03
POPULATION DENSITY
SEX RATIO
LITERACY RATE
CENSUS-2011 Provisional Data
Population
Persons 1210.2 million
Males 623.7 million
Females 586.5 million
2001-2011 Difference
% Growth
Persons 17.64
Males 17.12
Females 18.12
Top 5 States/UTs
Uttar Pradesh
Maharashtra
Bihar
West Bengal
Andhra Pradesh
Bottom 5 States/UTs
Lakshadweep
Daman & Diu
D. & N. Haveli
A. & N. Islands
Sikkim
Population Highlights
the population of India has increased by more than 181 million during the decade 2001-2011





The absolute addition is slightly lower than the population of Brazil, the fifth most
populous 10 country in the world!]
The population of India, at 1210.2 million, is almost equal to the combined population of
U.S.A., Indonesia, Brazil, Pakistan, Bangladesh and Japan put together (1214.3 million)!
2001-2011 is the first decade (with the exception of 1911-1921) which has actually added
lesser population compared to the previous decade.
The percentage decadal growth during 2001-2011 has registered the sharpest decline
since Independence - a decrease of 3.90 percentage points from 21.54 to 17.64 percent.
Uttar Pradesh (200 million) is the most populous State in the country - population is more
than the population of Brazil.
Uttar Pradesh and Maharashtra (312 million), is greater than the population of USA
Sex Ratio
2001 Sex Ratio 933
2011 Sex Ratio 940




Overall Sex ratio at the National level has increased by 7 points since Census 2001 to
reach 940 at Census 2011
This is the highest Sex Ratio recorded since Census 1971 and a shade lower than 1961
Increase in Sex Ratio is observed in 29 States/UTs
Three major States (J&K, Bihar & Gujarat) have shown decline in Sex Ratio as compared
to Census 2001.
Literacy
% Growth 2001-2011
Persons 38.82
Males 31.98
Females 49.10


As per provisional population totals of Census 2011, literates constitute 74 per cent of the
total population aged seven and above and illiterates form 26 per cent.
Literacy rate has gone up from 64.83 per cent in 2001 to 74.04 per cent in 2011 showing
an increase of 9.21 percentage points.