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  • 2021: Challenges and opportunities for India in International relations

    After a year when it battled Covid-19 and Chinese aggression, India enters 2021 with the challenge of strengthening ties and building new ones with the US, EU, Middle East countries, and its neighbors.

    Lets’ take a look at key determinants of India’s foreign policy in the post-pandemic year 2021.

    Taking forward our legacy

    • In April 1963, about six months after the 1962 war with China, then PM Jawaharlal Nehru wrote an article in Foreign Affairs magazine, titled ‘Changing India’.
    • He conceded that there was a need to adjust our relations with friendly countries in the light of the changing actualities of the international situation.
    • The Chinese, ‘devious and deceptive’ as they have proved to be, required that India pay ‘considerably more attention to strengthening her armed forces’, said Nehru.

    Agenda for 2021

    • As India bids adieu to a disruptive year that challenged its diplomatic and military standing and enters a new one fraught with challenges, it could borrow from Nehru’s words.
    • The New Year presents India an opportunity to emerge as a global rather than an aspirational player.
    • A reflection of events shows India faced seven hard realities in 2020 and has to deal with six challenges and opportunities in 2021.

    Hard realities of 2020

    #1: China aims for top

    • While it was targeted initially for being the source of the coronavirus, Xi’s regime turned around and started to flex its muscle in the region.
    • The Indo-Pacific was its playground, where Chinese naval or militia forces rammed a Vietnamese fishing boat, “buzzed” a Philippines naval vessel, and harassed a Malaysian oil-drilling operation.
    • It even tried to arm-twist Australia through trade curbs.
    • And since May, Chinese troops have altered the status quo along the border with India, claimed the lives of 20 Indian soldiers, and violated every agreement to maintain peace.

    #2: America under Biden

    Over the last four years, the US vacated the leadership space at the world stage under the Donald Trump Administration.

    • It walked out of or weakened almost a dozen multilateral bodies or agreements, from the Iran deal to the WHO.
    • While Beijing moved in to claim space, the Trump Administration did one thing right — it targeted China and the Communist Party of China for disrupting the global order.
    • Once Joe Biden takes over as President, the US is expected to reclaim the space vacated by Trump.

    #3: Acceptance for Taliban

    • Having invaded Afghanistan 19 years ago trying to root out the Taliban, the US finally made peace with them in February as it looks to exit.
    • For India, this meant the beginning of the process of re-engaging with the Taliban.
    • Signaling long-term commitment to Afghanistan’s future — under Taliban or other political forces — India has committed $80 million, over and above its $3 billion commitment in the last two decades.
    • This means India too is finally looking at the Taliban as a political actor, although it is controlled by the Pakistan military.

    #4: Middle East equations

    • The US-brokered rapprochement between Israel and four Arab countries — the UAE, Bahrain, Morocco, and Sudan — reflected the changing landscape in the region.
    • With Saudi Arabia and Iran competing for leadership, along with Turkey, in the Islamic world, there have been growing calls for ties with Israel.
    • New Delhi has been ahead of the curve, cultivating ties with Israel as well as Saudi-UAE and the Iranians with deft diplomacy.
    • But it has to be careful to not let its gains get impacted by polarizing politics at home — be it through the CAA-NRC or religious fault-lines.

    #5: Russia-China bonding

    • Brewing for the last three decades, ties between Russia and China got closer in 2020.
    • India has always felt that it was the West, with its approach towards Russia after the annexation of the Crimea in 2014 that has pushed Moscow towards Beijing.
    • This has been possible also due to the US’s anti-Chinese rhetoric, the collapse of oil prices, and Russia’s dependence on Chinese consumption.
    • India has strong ties with Russia, and Moscow was the venue for all the India-China official and ministerial conversations over the border standoff.
    • But, it has taken note of Moscow’s position on the Quad and Indo-Pacific, a near-echo of Beijing’s stance.

    #6: Assertive neighbors

    • The year began with Bangladesh asserting itself on CAA-NRC, and then Nepal claiming territory and issuing a new map. It brought home the reality that neighbors are no pushovers.
    • By the end of the year, New Delhi had moved to build bridges with both, wary of an active Beijing. Bangladesh pushed back, and India did not notify the CAA rules. Nepal reached out at the highest level.
    • India also watched closely the US and Chinese forays with the Maldives and Sri Lanka. India appears to have made peace with the involvement of the US in the Maldives, and that of Japan in Sri Lanka and the Maldives.

    # 7: Aspirational India

    • By 2020, India’s public articulation of “self-reliance” and refusal to sign trade pacts with RCEP countries was widely perceived as “isolationist” and “inward-looking”.
    • India did step up to supply medicines and protective kits to more than 150 countries but did not come across as the global leader the world needed at this time.
    • Lack of resources, a contracting economy, and its populist politics made it come across as an aspirational power.

    2021: Challenges, opportunities

    #1: Countering China

    • India’s response to the border standoff has been guided by thinking that one has to stand up to the bully, but that has come at a cost: soldiers braving the harsh winter and military assets deployed on land, in air, and at sea.
    • The standoff has reinforced Nehru’s belief in 1963 that India needs “external aid in adequate measure”.
    • India will need continuing support from the US, Japan, Australia, besides European leaders such as France, Germany, and the UK.

    #2: High table at UN

    • As India enters the UN Security Council as a non-permanent member for the eighth time, stakes are high in the wake of this leadership contest between China and the rest of the world.
    • India will have to take positions on issues it had carefully avoided — from Tibet to Taiwan, from Iran-Saudi rivalry to the refugee crisis between Bangladesh and Myanmar.
    • Cross-border terrorism is one of the top concerns and India will work towards isolating Pakistan further.
    • But a limited fixation on the western neighbor would distract from India’s aspirations of being a global leader.

    #3: Friendship with the US

    • Much is expected from the Biden Administration for building on Indo-US ties, but a lot will depend on how the US views China in the larger scheme of things.
    • Moves towards a possible US-China trade deal will be watched by South Block closely. One of the key tests will be the future of Quad, and the Indo-Pacific strategy of the new administration.
    • New Delhi will build on its deepening strategic and defense ties with the US and would want to resolve trade and visa issues.

    #4: Wooing Europe

    • As the UK and the EU agree on a deal, India will look ahead to negotiating a deal with the UK and a long-pending one with the EU.
    • For a start, it has invited British PM Boris Johnson as Chief Guest for Republic Day.
    • In May, there is a possibility of an India-EU summit.
    • Already, France and Germany have come up with their Indo-Pacific strategy, and a potential European strategy is a possibility, but an EU-China trade deal would be dissected by Indian negotiators.

    #5: Engaging with neighbors

    • China’s growing economic footprint in India’s neighborhood is a concern. While it is being played out in Nepal, India will also watch China’s moves in the rest of the subcontinent.
    • Its moves in Iran, too, were closely watched, and as Presidential elections take place in Iran this year, stakes for engagement will be high.
    • One of the important aspects of 2021 is that, while there is a churning in Nepal, almost every South Asian country has had elections in the last couple of years.
    • That means the governments in these countries are stable.
    • As the world emerges from the pandemic, New Delhi has a lot to gain from what could be “vaccine diplomacy” with neighbors in 2021 — supplying vaccines either frees or at affordable costs.

    Conclusion: Thining global, not just aspirational

    • For a long, India has played the role of an emerging power — with ambitions to play the role of global power.
    • In 2021, New Delhi will host the BRICS summit, and start its preparations for the G-20 summit in 2023. And the India-Africa Forum summit, which could not be held in 2020, could be held in 2021 or later.
    • New Delhi has opportunities to articulate and be vocal on issues that matter to the world and be proactive to further its interests.
    • This could well be the Indian strategy in the New Year, as it navigates a post-Covid-19 future.

  • RBI comes up with Digital Payments Index

    The RBI has constructed a composite Digital Payments Index (DPI) with March 2018 as the base period to capture the extent of digitization of payments across the country.

    Note various indicators of the DPI.

    Digital Payments Index

    • RBI-DPI will be published on the central bank’s website on a semi-annual basis from March 2021 onwards with a lag of four months.
    • It comprises five broad parameters that enable the measurement of deepening and penetration of digital payments in the country over different time periods.
    • The parameters are:
    1. Payment enablers (weight 25 percent)
    2. Payment infrastructure–demand-side factors (10 percent)
    3. Payment infrastructure – supply-side factors (15 percent)
    4. Payment performance (45 percent) and
    5. Consumer centricity (5 percent)
    • Each of these parameters has sub-parameters which, in turn, consist of various measurable indicators, RBI said.

    Why need such an Index?

    • Digital payments in India have been growing rapidly.
    • The DPI reflects accurately the penetration and deepening of various digital payment modes.

  • What is Interconnection Usage Charge (IUC) in Telecom?

    The termination charge for wireless to wireless domestic calls has been zeroed from January 1 onwards. Until now operators paid Interconnection Usage Charges (IUC) of 6 paise per minute on mobile calls.

    We are heading for 5G and yet we were indulged in 2G era spat. Sounds strange, but finally IUC got away….

    Interconnection Usage Charge (IUC)

    • IUC is the cost that a mobile operator pays to another operator for carrying through/ terminating a call.
    • If a customer of Mobile Operator A calls a customer of Mobile Operator B and the call is completed, then A pays an IUC charge to B for carrying/facilitating the call.
    • Essentially, it is the originating network compensating the receiving network for the cost of carrying the call. In India, IUC is set by the TRAI.

    When was it introduced?

    • IUC was introduced at a time when some operators had a larger network footprint compared to new players.
    • In such a scenario, the larger operators had to be compensated for the investments it had to enable call completion. However, over the years this gap between operators has reduced.
    • All the remaining operators have identical network footprint when it comes to voice calls.
    • TRAI’s original deadline to phase out IUC was January 1, 2020.

    What does it mean to Consumers?

    • For mobile users, this means that all voice calls will be free from now on.
    • While almost all operators had already started offering unlimited calls as part of their bundled pack, some were charging the 6 paise from consumers for paying IUC charges.
    • From January 1, operators will stop collecting the charges.
    • But other than that there will not be any significant gain for users. Tariff packs available in the market already offer data with unlimited voice calls.

    What does the end of the IUC regime imply?

    • For the operators, the end of the IUC regime will lead to easier operations.
    • Many legal battles have been fought in the past over disputes related to IUC charges.
    • Now, the operators can keep whatever money they collect from consumers without having to keep a tab on where the call is terminating.
    • The change in the billing system will not have any significant impact on operators’ revenue.

  • The Battle of Bhima-Koregaon (1818)

    The history of the Bhima-Koregaon battle should be taught in schools, said the Union Minister of State for Social Justice and Empowerment.

    Try this PYQ:

    What was the immediate cause for Ahmad Shah Abdali to invade and fight the Third Battle of Panipat:

    (a) He wanted to avenge the expulsion by Marathas of his viceroy Timur Shah from Lahore

    (b) The frustrated governor of Jullundhar Adina Beg khan invited him to invade Punjab

    (c) He wanted to punish Mughal administration for non-payment of the revenues of the Chahar Mahal

    (Gujrat Aurangabad, Sialkot and Pasrur)

    (d) He wanted to annex all the fertile plains of Punjab upto borders of Delhi to his kingdom

    Battle of Bhima-Koregaon

    • The 1818 battle of Bhima-Koregaon, one of the last battles of the Third Anglo-Maratha War culminated in the Peshwa’s defeat.
    • It was fought on 1 January 1818 between the British East India Company (BEIC) and the Peshwa faction of the Maratha Confederacy, at Koregaon at the banks of River Bhima.
    • A 28,000-strong force led by Peshwa Baji Rao II while on their way to attack the company-held Pune were unexpectedly met by an 800-strong Company force of which 500 belonged to the Dalit community.
    • The battle was part of the Third Anglo Maratha war, a series of battles that culminated in the defeat of the Peshwa rule and subsequent rule of the BEIC in nearly all of Western, Central, and Southern India.

    Mahars under Shivaji

    • Back in the seventeenth century, the community was particularly valued by the ruler Shivaji, under whom Maratha caste identities were far more fluid.
    • The value of the Mahars for military recruitment under Shivaji was noted by the social reformer Jyotirao Phule.
    • The Mahars were not only beneficiaries of the attempt at caste unity under Shivaji but were in fact valued for their martial skills, bravery, and loyalty.

    Mahars after Shivaji

    • The position occupied by the Mahars under Shivaji, however, was short-lived and under later Peshwa rulers, their status deteriorated.
    • The Peshwas were infamous for their Brahmin orthodoxy and their persecution of the untouchables.
    • The Mahars were forbidden to move about in public spaces and punished atrociously for disrespecting caste regulations.
    • Stories of Peshwa atrocities against the Mahars suggest that they were made to tie brooms behind their backs to wipe out their footprints and pots on their necks to collect their spit.

    Why is the battle significant?

    • The battle resulted in losses to the Maratha Empire, then under Peshwa rule, and control over most of western, central, and southern India by the British East India Company.
    • The battle has been seen as a symbol of Dalit pride because a large number of soldiers in the Company forces were the Mahar Dalits, the same oppressed community to which Babasaheb Ambedkar belonged.
    • After centuries of inhumane treatment, this battle was the first time that Mahars had been included in a battle in which they won.

    Dr. Ambedkar’s association

    • It was Babasaheb Ambedkar’s visit to the site on January 1, 1927, that revitalized the memory of the battle for the Dalit community.
    • He led to its commemoration in the form of a victory pillar, besides creating the discourse of Dalit valor against Peshwa ‘oppression’ of Dalits.

  • [pib] Remission of Duties and Taxes on Exported Products (RoDTEP) Scheme

    The Union govt. has decided to extend the benefit of the Scheme for Remission of Duties and Taxes on Exported Products (RoDTEP) to all export goods with effect from 1st January 2021.

    Try this PYQ:

    Q.Among the following, which one is the largest exporter of rice in the world in the last five years? (CSP 2019)

    (a) China

    (b) India

    (c) Myanmar

    (d) Vietnam

    RoDTEP Scheme

    • RoDTEP is a scheme for the Exporters to make Indian products cost-competitive and create a level playing field for them in the Global Market.
    • It has replaced the current Merchandise Exports from India Scheme, which is not in compliance with WTO norms and rules.
    • The new RoDTEP Scheme is a fully WTO compliant scheme.
    • It will reimburse all the taxes/duties/levies being charged at the Central/State/Local level which are not currently refunded under any of the existing schemes but are incurred at the manufacturing and distribution process.

    Why need such a scheme?

    • The scheme was announced last year as a replacement for the Merchandise Export from India Scheme (MEIS), which was not found not to be compliant with the rules of the World Trade Organisation.
    • Following a complaint by the US, a dispute settlement panel had ruled against India’s use of MEIS as it had found the duty credit scrips awarded under the scheme to be inconsistent with WTO norms.

    Back2Basics: Merchandise Exports from India Scheme (MEIS)

    • MEIS was launched with an objective to enhance the export of notified goods manufactured in a country.
    • This scheme came into effect on 1 April 2015 through the Foreign Trade Policy and will be in existence till 2020.
    • MEIS intended to incentivize exports of goods manufactured in India or produced in India.
    • The incentives were for goods widely exported from India, industries producing or manufacturing such goods with a view to making Indian exports competitive.
    • The MEIS covered almost 5000 goods notified for the purpose of the scheme.

  • What is Operation Meghdoot?

    Colonel Narinder ‘Bull’ Kumar (Retd.), instrumental in the Army launching Operation Meghdoot and securing the dominating heights of Siachen Glacier in 1984 has passed away at 87.

    Operation Meghdoot

    • Operation Meghdoot was the codename for the Indian Armed Forces’ operation to seize control of the Siachen Glacier in Kashmir, precipitating the Siachen conflict.
    • The Siachen then had become a bone of contention following a vague demarcation of territories in the Karachi Agreement of July 1949.
    • Executed in the morning of 13 April 1984, this military operation, launched on the highest battlefield in the world, was the first offensive of its kind.
    • The operation preempted Pakistan’s impending Operation Ababeel and was a success, resulting in Indian forces gaining control of the Siachen Glacier in its entirety.
    • Currently, the Indian Army remains the first and only army in the world to have taken tanks and other heavy ordnance up to such an altitude (well over 5,000 m or 16,000 ft).

    Bull Kumar’s contributions

    • Kumar, a legendary mountaineer who had spotted Pakistani activities around the Siachen glacier in 1984 that helped India secure it subsequently.
    • He was awarded Padma Shri, the fourth highest civilian award, in 1965.
    • He was decorated with Param Vishisht Seva Medal (PVSM), Kirti Chakra, and Ati Vishisht Seva Medal (AVSM).
    • The battalion headquarters on the glacier located close to an altitude of 16,000 feet is named “Kumar post” in his honor.

  • The growth India deserve

    The Indian economy has been showing the green shoots in the results of the third quarter. However, the recovery is far from complete. The article suggests the strategy to get to the 5 per cent trend line.

    Divergent performance after lockdown

    • At the end of the third quarter, the economy is showing a hugely divergent performance.
    • Pharmaceuticals and chemicals are showing growth on their Year-To-Date numbers.
    • FMCG reached last year’s level in the second quarter.
    •  Construction equipment are showing a huge recovery, with record sales numbers in the last three months, driven by rural demand from sales to individuals.
    • Capital goods are still sluggish with YTD numbers well down on last year, but are now showing some signs of life.
    • In contrast, travel and tourism, real-estate and construction, and retail, are all still at under half last year.
    • These are high employment sectors, and salaried employment has correspondingly taken a big hit, with potentially longer term effects.

    How to achieve ‘full recovery’

    • Full recovery means getting back to the trend line of growth where we would have been pre-COVID.
    • We need to aspire to grow 9 per cent for three years, which is what will get us back to our 5 per cent trend line of growth by 2024.
    • The recovery underway is solid, but we need measures to sustain and deepen it.
    • The government can do three things.

    3 suggestions to sustain the recovery

    1) Stimulate the economy

    • The most immediate fiscal stimulus possible is to put cash into the economy.
    • Distribute the pending tax refunds, pay the bills of all companies, pay off the arbitration awards pending where the government has lost cases, and pay state governments their pending GST dues.
    • All this will run into a few trillion rupees, and it will be cash that immediately stimulates the economy.

    2) Invest in public health infrastructure

    • Some preparation is underway to distribute vaccines, but there is need to go much further.
    • Centre should finance state government efforts to build an extensive public health network so we are equipped to handle a possible second wave of the virus.
    • If we demonstrate that we are much more prepared in February and March 2021 than we were in April and May 2020, we will spread confidence.
    • Government should work in partnership with private sector hospitals.

    3) Invest in inftrstructure

    • There are dozens of projects stuck as funds are not available.
    • The 20 trillion infrastructure pipeline needs to have some cash flow in it.
    • The COVID crisis revealed awful things about living conditions in slums across our cities.
    • We can put in place the right public-private programme to provide decent, accessible housing, with quick and cheap connectivity into our cities.
    • This could trigger a building boom that would stimulate demand like nothing else.

    How to finance the spending: Privatisation program

    • Government can manage the resource for spending through privatisation program.
    • Our current stock market boom says that buyers are ready to invest. But public-sector stock values are still depressed.
    • The best way to see them take off is to announce that the government intends to reduce its share-holding to 26 per cent across public-sector banks, steel companies, oil companies, and every manufacturing company and hotel it currently owns.
    • To avoid opposition to such reforms, we must operate consistent with our democratic institutions.
    • We need discussion papers for public comment, the debate in Parliament, hearing out stakeholders, and compromise with the interests of state governments.

    Consider the question “What are the measures India needs to take to achieve the complete recovery of the Indian economy disrupted in the wake of the pandemic.”

    Conclusion

    Unless we act now we will have a stunted recovery. We must use our economic crisis to set some bigger things right. 2021 will be a year to welcome if it returns us to the growth trajectory we deserve.

  • IAS Mains 2020: Important points for Essay paper | Playlist inside

    Dear students,

    IAS mains 2020 is just around the corner. Essay paper is a major differentiator the in mains exam. It is advisable to write at least two essays before your actual paper.

    We are sharing with you some of the important pointers for Essay paper shared by Zeeshan sir in this four video playlist. Go through all of them quickly.

    250 Most Probable Topics for IAS Mains 2020

    Get your preparation for IAS Mains exam fully covered with revision of most important topics.

    Click here for 250 Most Probable Topics with Questions for IAS Mains 2020

    This compilation contains issues and topics that have a high probability of being asked in Mains 2020 and beyond.

    We’ve covered these issues in a holistic manner so that you would be fully covered to answer any question from these topics. There are probable questions from the topics covered as well. We’ll be discussing these and other questions in Habitat sessions.

    For any query reach out to us at +91 89299 87787 or hello@civilsdaily.com

  • Give adequate time for investigation

    Andhra Pradesh’s Disha Bill of 2019 seeks to reduce the time period for investigation of some crimes to seven days. Such a move could have several consequences. The article deals with that issue.

    State governments reducing the period of investigation

    • The proposed Maharashtra Shakti Act of 2020 will have a provision to complete the investigation within 15 days.
    • Maharashtra has taken cur from the Andhra Pradesh’s Disha Bill of 2019.
    • Disha mandated completion of investigation within seven working days for offenses such as harassment of women, sexual assault on children, and rape, where “adequate conclusive evidence” is available.
    • The interpretation of “adequate conclusive evidence” by the police shall remain a problem.

    What are the CrPC provisions?

    • The Criminal Procedure Code (CrPC) provides that investigations relating to offenses punishable with imprisonment up to 10 years must be completed within 60 days.
    • For offenses with higher punishment (including rape) the time limit is of 90 days of detaining the accused, else he or she shall be released on bail.
    • To speed up the process, the CrPC was amended in 2018 and the period of investigation was reduced from 90 to 60 days for all cases of rape.

    Factors that decide the time required

    • Generally, the time of investigation depends on several factors like the severity of the crime, the number of accused persons and agencies involved.
    • This is besides the fact that in many cases of rape, the victim remains under trauma for some time and is not able to narrate the incident in detail.
    • The speed and quality of investigation also depend on whether a police station has separate units of investigation and law and order.[ a long-pending police reform]
    • It also depends on the number of available IOs and women police officers, and the size and growth of the FSL and its DNA unit.

    Consider the question “Examine the reasons for the high crime rate in India? Recently, some state governments have reduced the duration for the investigation of crime. How such move could impact the investigation?” 

    Conclusion

    Setting narrow timelines for investigation creates scope for procedural loopholes that may be exploited during the trial. Therefore, instead of fixing unrealistic timelines, the police should be given additional resources so that they can deliver efficiently.

  • Need for comprehensive agri policy

    The article examines the reasons for declining farm incomes and the contribution of farm subsidies.

    Contribution of agriculture

    • India’s agriculture, which also supports the rural workforce, was, forever, living beyond its means.
    • In 1950-51, agriculture’s share in the country’s GDP was 45%, the share of the workforce dependent on it was close to 70%.
    • Today, agriculture’s share in GDP is below 16%, but almost 50% of the country’s workforce depends on this sector.
    • The squeeze on the agricultural sector becomes even more evident from its terms of trade vis-à-vis the non-agricultural sectors.
    • Agriculture has been facing adverse terms of trade over extended periods since the 1980s, and even during the phases when the terms of trade have moved in its favour, for instance in the 1990s and again since 2012-13, there was no distinct upward trend.

    Reason for fall in farm incomes: falling investment

    • The decline in farm incomes was triggered by growing inefficiencies.
    • This decline, in turn, was caused by a lack of meaningful investment in agriculture.
    • The share of this sector in the total investment undertaken in the country consistently fell from about 18% in the 1950s to just above 11% in the 1980s.
    • In the most recent quinquennium for which data are available (2014-15 to 2018-19), the average share of agriculture was 7.6%.

    India’s dismal performance in term of yields of major crops

    • If one ranks countries in terms of their yields in wheat and rice — India’s two major crops — the country’s ranks were 45 and 59, respectively, in 2019.
    • This ranking would go down sharply if the areas recording high yields, such as Punjab and Haryana, are excluded.
    • In other words, for farmers in most regions of the country, it is an uphill battle for survival amid low yields.

    Need for coherent policy for agriculture

    • The lack of a coherent policy for agriculture must surely be regarded among the most remarkable failures of the governments in post-Independence India.
    • Compare this failure with the United States, with less than 2% of its workforce engaged in agriculture, has been enacting farm legislations every four years since the Agricultural Adjustment Act was enacted in 1933.
    • These policies comprehensively address the needs of the farm sector through proactive support from the respective governments.

    Issue of the farm subsidies in India

    • The subsidies are the price that the country pays for the failure of the policymakers to comprehensively address the problems of the farm sector.
    • Wanton distribution of subsidies without a proper policy framework has distorted the structure of production and, consequently, undesirable outcomes in terms of excessive food stockpiling.
    • And, yet, the fundamental ills of Indian agriculture are not adequately addressed.
    • Members of the World Trade Organization (WTO) are expected to notify their agricultural subsidies as a part of their commitment under the Agreement on Agriculture (AoA).
    • India’s latest notification, for 2018-19, shows that the subsidies provided were slightly more than $56 billion.
    • In most of the recent years, the largest component of India’s subsidies ($24.2 billion, or 43% of the total) is provided to “low income or resource-poor farmers”, a terminology that the AoA uses.
    • However, the designation of this category of farmers is left to individual members.
    • India has notified that 99.43% of its farmers are low income or resource-poor.
    • According to the agricultural census conducted in 2015-16, these are the farmers whose holdings are 10 hectares or less.
    • Thus, almost the entire farm sector comprises economically weak farmers.

    Comparing subsidies given by various countries

    • America provided $131 billion in 2017 and the EU, nearly €80 billion (or $93 billion) in 2017-18.
    • Instead of absolute numbers; the ratios of subsidies to agricultural value addition for the three countries give a much better picture.
    • Thus, for 2017, India’s farm subsidies were 12.4% of agricultural value addition, while for the U.S. and the EU, the figures were 90.8% and 45.3%, respectively.
    • This then is the reality of farm subsidies that India provides.

    Consider the question “Indian agriculture has been contributing beyond its means since Indian independence. However, agri incomes have shown a gradual decline. What are the reasons for such a decline? How far has farm subsidies succeeded in solving the low-income problem?” 

    Conclusion

    India needs a comprehensive Agri policy to deal with the distortion created by the subsidies.

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