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GS Paper: GS3

  • Redefining a farmer

    The article analyses the issues of multiple definitions of a farmer. The issues of ownership as a criterion for being a farmer and its impact on tenant farmers in discussed.

    Is land ownership right criterion

    • Traditionally, land ownership is a mandatory criterion for availing benefits under various agricultural schemes in India.
    • Laws governing land leasing operate at different levels across India.
    • The Model Agricultural Land Leasing Act, 2016 was introduced to formalise land leasing.
    • However, except a few States, a majority of State governments have not extended the scope of the Act to farmers.
    • According to the 2015-16 agricultural census, about 2.65 million operational holdings are either partially or wholly leased.

    How this impact tenants

    • The impact of agrarian distress is felt disproportionately by tenant farmers.
    • The tenant farmer incurs the costs and faces the risks, while the owner receives the rent, subsidies and other support.
    • The lessees do not benefit from loan waivers, moratorium and institutional credit, and are forced to be at the mercy of moneylenders.
    • The distress is reflected in the fact that tenant farmers account for a majority of farmer suicides reported in the NCRB data.

    Multiple definitions of farmers

    • There are multiple definitions for a ‘farmer’ in official data published by the Government of India.
    • The population census defines ‘cultivators’ as a person engaged in cultivation of land either ‘owned’ or held in kind or share.
    • The 59th round of the Situation Assessment Survey (SAS) of farmers also stresses on ‘possession of land’ either owned or leased or otherwise possessed for defining ‘farmers’.
    • Delinking of land as the defining criterion for a ‘farmer’ was done in the 70th round of SAS carried out by the NSSO.
    • The 70th Round of NSSO refined the definition of a farmer as one who earns a major part of the income from farming. 

    Conclusion

    Access to land as a policy instrument in bringing about equitable growth of rural economies needs no further emphasis. However, until the time ‘land to the tiller’ remains just wishful thinking, adopting a broader definition of a ‘farmer’ is a short-term solution to ensure inclusive and sustainable growth.

  • Analysing the impact of Bt cotton

    After almost 20 years of adoption of Bt cotton in India, its time to review the claimed benefits of the Bt.

    Hybrid cotton seeds and issues

    • Until the 20th century the indigenous ‘desi’ variety, Gossypium arboreum was used.
    • From the 1990s, hybrid varieties of G. hirsutum were promoted.
    • These hybrids cannot resist a variety of local pests and require more fertilizers and pesticides.
    • Cotton suffers from plenty of infestation from moth pests such as the Pink Bollworm (PBW) and sap-sucking (Hemipteran) pests such as aphids and mealy bugs.
    • With increasing pressure to buy hybrid seeds, the indigenous varieties have lost out over the years.

    Resistant pests and introduction of Bt cotton

    • The increasing use of synthetic man-made pesticides to control pests and the rising acreage under the American long-duration cotton led to the emergence of resistant pests.
    • Resistant Pink and even American Bollworm (ABW), a minor pest in the past, began increasing, leading to a growing use of a variety of pesticides.
    • Rising debts and reducing yields, coupled with increasing insect resistance, worsened the plight of cotton farmers.
    • It was in this setting that Bt cotton was introduced in India in 2002.

    What is Bt cotton

    • The plant containing the pesticide gene from the bacteria Bacillus thuringiensis (Bt), has been grown in India for about twenty years.
    • This pesticide, now produced in each Bt plant cell, ought to protect the plant from bollworm, thereby increasing yields and reducing insecticide spraying on the cotton plant.

    Review of the utility of Bt cotton

    • Review  was published in the scientific journal Nature Plants, analysing the entire picture of the use of Bt cotton in India.
    • Earlier studies had attributed to Bt the tripling of cotton yield between 2002-2014 in India.
    • However, one detail that raises concerns over such a conclusion was that yield differences between farmers who were the early adopters of Bt cotton and those who were not suffered from selection bias.
    • Controlling for such bias showed (in 2012) that the contribution of Bt cotton to yield increase was only about 4% each year.
    • Since yields vary annually by over 10%, the benefits claimed were dubious.
    • There are discrepancies between yield and the deployment of Bt cotton.
    • For instance, the Bt acreage was only 3.4% of the total cotton area in 2003, not sufficient to credit it for the 61% increase in yield in 2003-2004.
    • The rise in cotton yields can be explained by improvements in irrigation, for instance in Gujarat, and a dramatic growth across the country in the use of fertilizers.
    • The PBW developed a resistance by 2009 in India. In a few years, the situation was dreadful.
    • A technology that works in the lab may fail in fields since real-world success hinges on multiple factors.

    Way forward

    • The cost of ignoring ‘desi’ varieties for decades has been high for India.
    • Research suggests that with pure-line cotton varieties, high density planting, and short season plants, cotton yields in India can be good and stand a better chance at withstanding the vagaries of climate change.
    •  But government backing for resources, infrastructure and seeds is essential.

    Conclusion

    It is time to pay attention to science and acknowledge that Bt cotton has failed in India, and not enter into further misadventures with other Bt crops such as brinjal or herbicide resistance.

  • [pib] ARISE-ANIC Initiative

    Atal Innovation Mission (AIM), NITI Aayog, has launched Aatmanirbhar Bharat ARISE-Atal New India Challenges, to spur applied research and innovation in Indian MSMEs and startups.

    The name ARISE typically sounds some social sector or HRD related initiative. This is where one has to be cautious.

    ARISE ANIC Initiative

    • The program is a national initiative to promote research & innovation and increase the competitiveness of Indian startups and MSMEs.
    • Its objective is to proactively collaborate with esteemed Ministries and the associated industries to catalyse research, innovation and facilitate innovative solutions to sectoral problems.
    • It also aims to provide a steady stream of innovative products & solutions where the Central Government Ministries / Departments will become the potential first buyers.
    • It is in line with the PM’s mandate of “Make in India”, “Startup India”, and “Aatmanirbhar Bharat” to fast track the growth of the Indian MSME sector.

    Its implementation

    • The programme will be driven by ISRO, four ministries—Ministry of Defence; Ministry of Food Processing Industries; Ministry of Health and Family Welfare; and Ministry of Housing and Urban Affairs.
    • It will support deserving applied research-based innovations by providing funding support of up to Rs 50 lakh for speedy development of the proposed technology solution and/or product.
  • EASE Banking Reforms Index

    Union Minister of Finance & Corporate Affairs has felicitated best performing banks on EASE Banking Reforms Index.

    Note the various themes under which the index works.

    EASE Banking Reforms Index

    • EASE stands for ‘Enhanced Access and Service Excellence’. The index is prepared by the Indian Banking Association (IBA) and Boston Consulting Group.
    • It is commissioned by the Finance Ministry.
    • It is a framework that was adopted last year to strengthen public sector banks and rank them on metrics such as responsible banking, financial inclusion, credit offtake and digitization.

    Various themes and performance by the states

     

  • Pradhan Mantri Matsya Sampada Yojana

    PM will digitally launch the PM Matsya Sampada Yojana (PMMSY) today.

    PM Matsya Sampada Yojana

    • The PMMSY aims to bring about the Blue Revolution through sustainable and responsible development of the fisheries sector in India.
    • It has an estimated investment of Rs. 20,050 crores for its implementation during a period of 5 years from FY 2020-21 to FY 2024-25 in all States/UTs, as a part of AatmaNirbhar Bharat Package.
    • PMMSY aims at enhancing fish production by an additional 70 lakh tonne by 2024-25, increasing fisheries export earnings to Rs.1,00,000 crore by 2024-25.
    • Thus it aims doubling of incomes of fishers and fish farmers, reducing post-harvest losses from 20-25% to about 10% and generation of gainful employment opportunities in the sector.

    Aims and objectives of PMMSY

    • Harnessing of fisheries potential in a sustainable, responsible, inclusive and equitable manner
    • Enhancing of fish production and productivity through expansion, intensification, diversification and productive utilization of land and water
    • Modernizing and strengthening of the value chain – post-harvest management and quality improvement
    • Doubling fishers and fish farmers incomes and generation of employment
    • Enhancing contribution to Agriculture GVA and exports
    • Social, physical and economic security for fishers and fish farmers
    • Robust fisheries management and regulatory framework

    Implementation strategy

    The PMMSY will be implemented as an umbrella scheme with two separate components namely:

    (a) Central Sector Scheme and

    (b) Centrally Sponsored Scheme

    • Majority of the activities under the Scheme would be implemented with the active participation of States/UTs.
    • A well-structured implementation framework would be established for the effective planning and implementation of PMMSY.
    • For optimal outcomes, ‘Cluster or area-based approach’ would be followed with requisite forward and backward linkages and end to end solutions.

    Other inaugurations: e-Gopala App

    • e-Gopala App is a comprehensive breed improvement marketplace and information portal for direct use of farmers.
    • At present no digital platform is available in the country for farmers managing livestock including buying and selling of disease-free germplasm in all forms (semen, embryos, etc); availability of quality breeding services and guiding farmers for animal nutrition etc.
    • There is no mechanism to send alerts (on the due date for vaccination, pregnancy diagnosis, calving etc) and inform farmers about various government schemes and campaigns in the area.
    • The e-Gopala App will provide solutions to farmers on all these aspects.
  • Coordinated strategy between government and RBI

    The article analyses the relation between the response of fiscal authority and monetary authority to get the maximum payoff in the normal circumstance. But the pandemic would require different approach.

    Coordination between monetary and fiscal authority in India

    • Coordination between monetary and fiscal authorities has been a thorny issue globally in recent years.
    • If there is perfect coordination between the monetary and fiscal policy then there should be statistically significant negative correlation between the two. 
    • In the Indian context, for the 30-year period till FY2020, relation between the change in the consolidated fiscal deficit and the change in the growth rate of broad money reveals no coordination, substantiating the dominance of fiscal over monetary policy.
    •  Non-coordination between the two in India is also constrained by several policy targets and fewer instruments.

    Optimal combination of monetary and fiscal strategy

    • Both the government and the RBI have two options between them — either a contraction or an expansion.
    • Thus, we effectively have four policy options, and each of the options will have a particular benefit.
    • Our endeavour is to find out which policy option can result in a Nash Equilibrium.
    • A Nash equilibrium occurs when neither the government nor the RBI can increase its benefit by unilaterally changing its action.
    • The payoff scenarios are hypothesised as benefits accruing to the government and the RBI separately when they are deciding on either of the policy options: Contraction or expansion.
    •  The government favour an expansionary policy and gets maximum payoffs from a fiscal expansion, either with monetary expansion or contraction.
    • The monetary authority ideally wants to contract the economy to fight inflation and gets maximum payoffs from a monetary contraction.

    So, what is optimal combination of fiscal and monetary strategy

    •  If the RBI opts for monetary expansion, the government also opts for expansion as the payoff is higher.
    • But this will compel the RBI to then opt for contraction, since that gives it a higher payoff.
    • Knowing this, the government’s best strategy will be then an expansion — so the outcome will always be a fiscal expansion with a simultaneous monetary contraction.
    •  This is the only Nash equilibrium for this game.

    Responding to the pandemic

    • The current pandemic is resulting in behavioural changes of individuals in terms of risk-taking.
    • In the Indian context too, there are behavioural changes in terms of risk-taking.
    • Many of the current companies were also born during the financial crisis, like Uber (2009), Microsoft (1975), Disney (1923), General Motors (1908) and General Electric (1890).
    • Echoing such “procedural rationality” in the current unprecedented circumstances, we thus believe fiscal expansion and monetary expansion is the desirable outcome.

    Conclusion

    The RBI has been largely successful in communicating to the market about its intentions and we now expect the government to manage expectations with coordinated communication and leave matters of financing the fiscal deficit, through measures like monetisation, to the RBI.

    B2BASICS

    NASH EQUILBRIUM

    Simply put, it is a situation where no player can increase his payoff by deviating alone (from the situation). That is,it is a situation where both players are involved in mutual best replies.

  • Hypersonic Technology Demonstrator Vehicle (HSTDV)

    The DRDO has successfully demonstrated the hypersonic air-breathing scramjet technology with the flight test of the Hypersonic Technology Demonstration Vehicle (HSTDV).

    Take note of close dissimilarities between Ramjet and Scramjet engines.

    About HSTDV

    • HSTDV is an unmanned scramjet vehicle with a capability to travel at six times the speed of sound.
    • The scramjets are a variant of a category of jet engines called the air-breathing engines.
    • The ability of engines to handle airflows of speeds in multiples of the speed of sound gives it a capability of operating at those speeds.
    • Hypersonic speeds are those which are five times or more than the speed of sound.
    • The unit tested by the DRDO can achieve upto six times the speed of sound or Mach 6, which is well over 7000 km per hour or around two km per second.

    Its development

    • The DRDO started on the development of the engine in the early 2010s.
    • The ISRO has also worked on the development of the technology and has successfully tested a system in 2016. DRDO too has conducted a test of this system in June 2019.
    • The special project of the DRDO consisted of contributions from its multiple facilities including the Pune headquartered Armament and Combat Engineering Cluster.

    Back2Basics: Ramjet V. Scramjet

    • A ramjet is a form of air-breathing jet engine that uses the vehicle’s forward motion to compress incoming air for combustion without a rotating compressor.
    • Fuel is injected in the combustion chamber where it mixes with the hot compressed air and ignites.
    • A ramjet-powered vehicle requires an assisted take-off like a rocket assist to accelerate it to a speed where it begins to produce thrust.
    • Ramjets work most efficiently at supersonic speeds around Mach 3 (three times the speed of sound) and can operate up to speeds of Mach 6.
    • However, the ramjet efficiency starts to drop when the vehicle reaches hypersonic speeds.
    • A scramjet engine is an improvement over the ramjet engine as it efficiently operates at hypersonic speeds and allows supersonic combustion. Thus it is known as Supersonic Combustion Ramjet or Scramjet.
  • Assam Rifles and the tussle between MoD and MHA

    The Delhi High Court has granted 12 weeks to the Union government to decide on whether to scrap or retain the dual control structure for Assam Rifles. Presently it comes under both the Ministry of Home Affairs (MHA) and the Ministry of Defence (MoD).

    What is the Assam Rifles?

    • Assam Rifles is one of the six central armed police forces (CAPFs) under the administrative control of Ministry of Home Affairs (MHA).
    • The other forces being the Central Reserve Police Force (CRPF), the Border Security Force (BSF), the Indo-Tibetan Border Police (ITBP), the Central Industrial Security Force (CISF) and the Sashastra Seema Bal (SSB).
    • It is tasked with the maintenance of law and order in the North East along with the Indian Army and also guards the Indo-Myanmar border in the region.
    • It has a sanctioned strength of over 63,000 personnel and has 46 battalions apart from administrative and training staff.

    Making of the regiment

    • Assam Rifles is the oldest paramilitary force raised way back in 1835 in British India with just 750 men.
    • Since then it has gone on to fight in two World Wars, the Sino-Indian War of 1962 and used as an anti-insurgency force against militant groups in the North East.
    • Raised as a militia to protect British tea estates and its settlements from the raids of the NE tribes, the force was first known as Cachar Levy.
    • It was reorganized later as Assam Frontier Force as its role was expanded to conduct punitive operations beyond Assam borders.

    How is it unique?

    • It is the only paramilitary force with a dual control structure. While the administrative control of the force is with the MHA, its operational control is with the Indian Army, which is under the MoD.
    • This means that salaries and infrastructure for the force is provided by the MHA, but the deployment, posting, transfer and deputation of the personnel is decided by the Army.
    • All its senior ranks, from DG to IG and sector headquarters, are manned by officers from the Army. The force is commanded by Lt. General from the Indian Army.
    • The force is the only central paramilitary force (CPMF) in a real sense as its operational duties and regimentation are on the lines of the Indian Army.
    • However, its recruitment, perks, promotion of its personnel and retirement policies are governed according to the rules framed by the MHA for CAPFs.

    Why do both MHA and MoD want full control?

    • MHA has argued that all the border guarding forces are under the operational control of the ministry and so Assam Rifles coming under MHA will give border guarding a comprehensive and integrated approach.
    • MHA sources also say that Assam Rifles continues to function on the pattern set during the 1960s and the ministry would want to make guarding of the Indo-Myanmar border on the lines of other CAPFs.
    • The Army, for its part, has been arguing that there is no need to fix what isn’t broken.
    • Sources say the Army is of the opinion that the Assam Rifles has worked well in coordination with the Army and frees up the armed forces from many of its responsibilities to focus on its core strengths.
    • It has argued that giving the control of the force to MHA or merging it with any other CAPF will confuse the force and jeopardize national security.
  • State Reforms Action Plan Rankings 2019

    Andhra Pradesh has bagged the first rank among all the states in the country in the state business reforms action plan-2019 (BRAP-2019), representing ease of doing business for Atmanirbhar Bharat.

    About the Ranking

    • It is the annual ease of doing business index of states and UTs of India based on the completion percentage scores of action items points of annual Business Reforms Action Plan (BRAP) under the Make in India initiative.
    • This ranking is based on the implementation of the business reform action plan.
    • Some of the key focus areas are access to information and technology, the setting up of a single-window system, construction permit enablers and land administration, according to DPIIT.
    • It based on the progress of states in completing annual reform action plan covering 8 key areas.

    The top ten states under the State Reform Action Plan 2019 are:

    1. Andhra Pradesh
    2. Uttar Pradesh
    3. Telangana
    4. Madhya Pradesh
    5. Jharkhand
    6. Chhattisgarh
    7. Himachal Pradesh
    8. Rajasthan
    9. West Bengal
    10. Gujarat
  • Reforming tax system

    The article discusses two recent measures announced by the government to bring in the transparency in the tax system.

    Issue of lower tax collection and way out

    • An economic contraction this year will severely impact tax collections.
    • Changing tax rates or the tax base in response is difficult and a hurried approach can have wider consequences.
    • So, the only tool available is to urge voluntary compliance.
    • Compliance is achieved through a fine balance between enforcement and encouragement.
    • Despite enforcement-driven measures in the past the taxpaying population has remained at only 6 per cent.
    • Thus, the only way to boost collections is to build trust between the administration and the taxpayer.

    Relation between complexity of system and compliance

    • A taxpayer has to interact with the tax system at numerous instances.
    • While interacting, if the taxpayer perceives the system to be complex, such perception affects compliance.
    • Perceived complexity can discourage individuals from filing returns.
    • This could reflect simply in the difference between the number of taxpayers and the returns filed: which is around 20 million.
    • Such behaviour is bound to impact tax collection.

    Recent government measures to bring transparency

    1) New taxpayer’s charter with some new features

    • The charter is a document that lists a taxpayer’s rights and obligations.
    • A taxpayer’s charter is often perceived as a means to build taxpayer’s trust.
    • The rights and obligations mentioned in India’s new charter are in line with global practices.
    • There are 3 interesting additions in the new charter: 1) commitment to reducing compliance costs 2) holding its authorities accountable 3) publishing a periodic report of service standards.
    • A tax ombudsman can ensure that some of these standards are met, however, in 2019, the cabinet approved the abolition of the quasi-judicial post.

    2) Faceless assessment

    • This relates to the frequent complaint of taxpayers about corruption and delay.
    • To end personal interface, e-assessment was introduced in 2019.
    • Developing this idea further, faceless assessment now seeks to further automate the case selection and the distribution function of the assessing officer.
    • The intent is to divest and distribute the functions of a single assessing officer so that assessment is carried out in a fair manner.

    Consider the question “What are the factors responsible for low tax compliance in India? What are the steps taken by the government to increase compliance?

    Conclusion

    If the commitment to a fair and impartial system and a time-bound resolution of matters is to be met, the new processes, with reviews and anonymity, must ensure efficiency in case selection and consistency in assessment.