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  • [Burning Issue] Policy rate hike pause by RBI: Inflation Targeting Framework

    rbi

    Context

    • In a surprise move, the Indian central bank decided to pause its consecutive rate hikes and keep the benchmark repo rate at 6.50%.
    • The decision taken by the monetary policy committee (MPC) is a unanimous one despite inflation still beyond tolerance levels and downside risks from global economic activity.
    • Thus, this edition of the burning issue will talk about this hike pause and the mechanism of inflation targeting.

    Background: Evolution of Inflation Targeting Framework

    Phase One: Non-Statutory Inflation Control By RBI

    • Non-statutory: This Phase was marked by a Non-statutory inflation mechanism by RBI which included changes in several policy rates such as cash reserve ratio, and statutory liquidity ratio to maintain inflation.
    • Limitation: The mechanism lacked in several points such as lack of transparency in decision-making, uncertainty in the market about rates and inflation etc. Thus, the government shifted to Inflation targeting.

    Phase Two- The MPC and The Beginning of the Inflation Targeting Era

    What is the Monetary policy committee (MPC)?

    • Monetary policy refers to the policy of the central bank with regard to the use of monetary instruments under its control to achieve the goals specified in the Act.
    • Six-member committee: Under Section 45ZB of the amended (in 2016) RBI Act, 1934, the central government is empowered to constitute a six-member Monetary Policy Committee (MPC).
    • The primary objective: Section 45ZB of RBI Act, 1934 sets the objective of the RBI’s monetary policy to maintain price stability while keeping in mind the objective of growth.
    • A Monetary policy committee was formed to decide the Key policy rates.
    • Objective: Further, Section 45ZB lays down that “the Monetary Policy Committee shall determine the Policy Rate required to achieve the inflation target”.

    Flexible Inflation Targeting Framework

    Now, there is a flexible inflation-targeting framework in India (after the 2016 amendment to the Reserve Bank of India (RBI) Act, 1934).

    What is Inflation Targeting? 

    • Inflation targeting is a central banking policy that revolves around adjusting monetary policy to achieve a specified annual rate of inflation.  
    • Inflation targeting was first adopted in New Zealand and subsequently by 33 other countries. India adopted it in 2016.
    • The amended RBI Act, 1934 provided for the INFLATION TARGET (4% +-2%) to be set by the Government of India, in consultation with the Reserve Bank, once in every five years.

    3 Stances of RBI under Inflation Targeting

    1. ‘Accommodative’ 

    • An accommodative stance means the central bank is prepared to expand the money supply to boost economic growth. The central bank, during an accommodative policy period, is willing to cut interest rates. A rate hike is ruled out.

    2. ‘Neutral’

    • A ‘neutral stance’ suggests that the central bank can either cut rate or increase rate. This stance is typically adopted when the policy priority is equal on both inflation and growth.

    3. ‘Hawkish’

    • A hawkish stance indicates that the central bank’s top priority is to keep inflation low. During such a phase, the central bank is willing to hike interest rates to curb the money supply and thus reduce the demand.

    How inflation and rate hikes are linked?

    • When there is a shortage of funds, commercial banks borrow money from the central bank which is repaid according to the repo rate applicable.
    • The central bank provides these short terms loans against securities such as treasury bills or government bonds.
    • This monetary policy is used by the central bank to control inflation or increase the liquidity of banks.
    • The government increases the repo rate when they need to control prices and restrict borrowing.
    • An increase in repo rate means commercial banks have to pay more interest for the money lent to them and therefore, a change in repo rate eventually affects public borrowings such as home loans, EMIs, etc.
    • From interest charged by commercial banks on loans to the returns from deposits, various financial and investment instruments are indirectly dependent on the repo rate.
    rbi

    Why RBI hiked rates previously?

    • Global economic volatility due to the Ukraine war since March 2022 supply chain disruptions for a number of items.
    • Record high inflation throughout a major period during 2022 has prompted the RBI to make multiple policy rate hikes.

    Impact:

    • The RBI has raised the repo rate by 250 basis points (bps) since May 2022, thereby increasing the External Benchmark Linked Interest Rates, EBLR by 250 bps.
    • Banks have also raised the lending rate linked to the marginal cost of funds-based lending rate (MCLR) in the past 11 months.
    • Last year, the Consumer price index (CPI) hit its highest of 7.79% in Apr, and the wholesale price index (WPI) reached 15.88% in May 2022.
    2

    Why RBI has now paused hikes?

    • Decreasing inflation: The country’s retail inflation, which is measured by the consumer price index (CPI), slipped 16-month low of 5.66% in Mar. 2023.
    • Inflation data on the Wholesale Price Index (WPI), which calculates the overall prices of goods before selling at retail prices, was at 3.85% in Feb. 2023.
    • May slow down growth and consumption: Concerns over slowing consumption and tepid private investment have been emerging in policy quarters, with many seeing high-interest rates as a crucial factor in dampening demand.
    • Decrease in crude prices: Also, there has been a decrease in global crude prices and food inflation.
    • Still risks are there: The RBI underlined risks from protracted geopolitical tensions, tight global financial conditions and global financial market volatility to its monetary policy outlook.

    Will this pause be helpful or not?

    (1) Yes

    • The pause by the RBI will help favor the growth-inflation tradeoff towards the former.
    • An increase in EMIs for different types of loans will also halt helping the middle class to cope with inflation.

    (3) No

    • Rates to remain high: In the backdrop of many global agencies lowering India’s growth forecasts for this financial year amid expectations of global economic slowdown and monetary tightening by other countries.
    • No relief on debts: The interest rates of debts are already high and a pause on a hike will not bring down these interest rates and thus keep the debt costlier.

    Effectiveness of Inflation Targeting

    Successes

    • Average inflation has declined: The average inflation rate measured through the GDP deflator has declined significantly in the inflation targeting regime.
    • The average inflation, which was 5.69 per cent five years in the pre-inflation targeting period, has declined to 3.47 per cent in the last five years.
    • CPI declined: Consumer Price Index inflation declined from 8.26 per cent during the 2011-2015 period to 4.99 per cent in 2016-2019, a 3.27 percentage point fall.
    • This is highest among both inflation-targeting countries as well as those that did not adopt it.
    • Enhanced transparency:  Monetary policy transparency in India has improved after the adoption of the inflation-targeting framework.

    Failures

    • Sole focus of inflation: However, some critics of inflation targeting feel that its sole focus on price stability ignores growth imperatives.
    • Not much effective in India: In India, the agricultural sector and informal economy have a large share, which is not directly impacted by such rate hikes, thus rendering the hikes less effective.

    Way forward

    • The review committee should try to find out areas of further improvement in the monetary policy framework which will strengthen the MPC to achieve the inflation target.
    • In the present framework, it is not clear which model the RBI uses to forecast inflation and GDP figures, so it should disclose the models used in forecasting as other inflation-targeting countries do.
    • Further, the RBI may include a forecast of core inflation in the minutes.

    Conclusion

    • Central banks including the RBI are often accused of falling behind the curve. However, these are challenging times for central banks. Rate hikes operate with a lag. They also lead to a growth slowdown.
    • Thus, RBI has to walk a tightrope to balance growth-inflation dynamics. The accountability measures incorporated in the inflation targeting framework ensure that the focus on inflation management is not lost.

  • India’s Forex Reserves rise $6.30 bn to $584.75 bn

    forex

    India’s forex reserves increased by $6.306 billion to $584.755 billion last week, according to the Reserve Bank of India (RBI).

    Why discuss this?

    • In October 2021, India’s forex reserves reached an all-time high of $645 billion.
    • Since then, the reserves have been declining.

    What is Foreign Exchange (Forex) Reserve?

    • Foreign exchange reserves are important assets held by the central bank in foreign currencies as reserves.
    • They are commonly used to support the exchange rate and set monetary policy.
    • In India’s case, foreign reserves include Gold, Dollars, and the IMF’s quota for Special Drawing Rights.
    • Most of the reserves are usually held in US dollars, given the currency’s importance in the international financial and trading system.
    • Some central banks keep reserves in Euros, British pounds, Japanese yen, or Chinese yuan, in addition to their US dollar reserves.

    India’s forex reserves cover:

    1. Foreign Currency Assets (FCAs)
    2. Special Drawing Rights (SDRs)
    3. Gold Reserves
    4. Reserve position with the International Monetary Fund (IMF)

    Countries with the highest foreign reserves

    • Currently, China has the largest reserves followed by Japan and Switzerland.
    • India earlier overtook Russia to become the fourth-largest country with foreign exchange reserves. (Data from August 2022)
    1. China – $3,349 Billion
    2. Japan – $1,376 Billion
    3. Switzerland – $1,074 Billion
    4. Russia – $597.40 Billion

    Why are these reserves so important?

    • All international transactions are settled in US dollars and, therefore, required to support India’s imports.
    • More importantly, they need to maintain support and confidence for central bank action, whether monetary policy action or any exchange rate intervention to support the domestic currency.
    • It also helps to limit any vulnerability due to sudden disturbances in foreign capital flows, which may arise during a crisis.
    • Holding liquid foreign currency provides a cushion against such effects and provides confidence that there will still be enough foreign exchange to help the country with crucial imports in case of external shocks.

    Initiatives taken by the government to increase forex

    • To increase the foreign exchange reserves, the Government of India has taken many initiatives like AatmaNirbhar Bharat, in which India has to be made a self-reliant nation so that India does not have to import things that India can produce.
    • Other than AatmaNirbhar Bharat, the government has started schemes like Duty Exemption Scheme, Remission of Duty or Taxes on Export Product (RoDTEP), Nirvik (Niryat Rin Vikas Yojana) scheme, etc.
    • Apart from these schemes, India is one of the top countries that attracted the highest amount of Foreign Direct Investment, thereby improving India’s foreign exchange reserves.

  • NISAR to map Himalayas’ Seismic Zones

    nisar

    Central idea

    • The ISRO and the NASA have jointly developed a forthcoming satellite called NISAR.
    • It will map the most earthquake-prone regions in the Himalaya.

    What is NISAR?

    • NISAR stands for NASA-ISRO Synthetic Aperture Radar.
    • The mission aims to provide global measurements of the causes and consequences of land surface changes using advanced radar imaging.
    • The satellite is equipped with two types of synthetic aperture radars (SAR): L-band and S-band, which will allow for high-resolution, all-weather imaging of the Earth’s surface.
    • The NISAR satellite is expected to be launched in January 2024.

    How it will be used for earthquake monitoring?

    • It will generate data that can potentially give advance warning of land subsidence and identify places that are at greatest risk from earthquakes.
    • The geoscience community can use this to determine how strain is building up in various parts of the Himalayas.
    • Strain refers to the deformation that occurs in rocks when it is under pressure from other rocks.
    • Movements of continental plates that are sliding, colliding, or subducting against each other cause strain.
    • With a frequency of 12 days and the ability to provide images even under cloudy conditions, NISAR would be a valuable tool to study deformation patterns, such as in Joshimath.

    Strain Map already in place

    • In 2021, scientists from the Geological Survey of India published a “strain map” of the Himalayas based on data from 1,252 GPS stations along the Himalayas.
    • It identified regions that had the greatest odds of generating earthquakes of magnitude above 8 and their extent.
    • However, these many stations are still too few, and there’s only one satellite (Sentinel) that we rely on.
    • With NISAR, the costliest space mission ever, we can have a game-changer in earth-science observation.

     

    Seismic Zones of India

    nisar

    India is divided by Bureau of Indian Standards (BIS) into 4 seismic zones based on the level of seismicity and the frequency of earthquakes that occur in that particular region.

    These zones are as follows:

    1.      Zone 2: This is a low seismic zone comprising of areas with the lowest risk of earthquakes. It includes regions like the northeastern states of India, parts of J&K, Himachal Pradesh, and Uttarakhand.

    2.      Zone 3: This is a moderate seismic zone comprising of areas that are at moderate risk of earthquakes. It includes regions like Gujarat, Haryana, Delhi, parts of UP, Bihar, West Bengal, and parts of Jharkhand.

    3.      Zone 4: This is a high seismic zone comprising of areas that are at high risk of earthquakes. It includes regions like the A&N Islands, parts of Himachal Pradesh, J&K, Uttarakhand, and the entire northeastern region.

    4.      Zone 5: This is a very high seismic zone comprising of areas that are at the highest risk of earthquakes. It includes regions like the entire state of J&K, Himachal Pradesh, Uttarakhand, the entire northeastern region, parts of Gujarat, Rajasthan, Maharashtra, and the A&N Islands.

     

     

     

  • In news: Mahad Satyagraha

    mahad

    Central idea

    • B.R. Ambedkar’s life was full of milestones, and he was the first Dalit to study at Elphinstone College in Bombay.
    • He was also the chair of the drafting committee of the Constitution of India and became the first law minister of independent India.
    • Moreover, he contributed significantly to the movement for Dalit emancipation, awakening Dalit consciousness and leading the community’s bid for political power.

    Context of the Mahad Satyagraha

    • The Mahad Satyagraha of 1927 was one of the earlier and most significant milestones in Ambedkar’s life.
    • The events leading up to it began in August 1923, when the Bombay Legislative Council passed a resolution to allow the Untouchable classes to use all public water sources.
    • Although the Bombay government adopted the resolution, the situation on the ground remained unchanged, with upper-caste Hindus still not allowing lower castes to access public water sources.

    What happened at the Satyagraha?

    • Ramchandra Babaji More, a Mahad-based Dalit political leader, approached Ambedkar to preside over a conference of the Untouchables in Konkan, and Ambedkar agreed.
    • Around 2,500 delegates, workers, and leaders of Depressed Classes attended the conference, including boys of fifteen to old men of seventy.
    • On the first day of the conference, progressive non-Dalit leaders addressed the attendees and promised to help them in their struggle.
    • Ambedkar stressed creating “a wave of awakening” among the lower caste people of Konkan.
    • After the day’s proceedings, Ambedkar and the other organizers and attendees marched to the nearby Chavadar tank the next morning, where people from untouchable communities were not allowed to draw water from.
    • They implemented the resolution by picking up water with their cupped hands and drank it.

    Key event: Burning of Manusmriti

    • Despite the court injunction prohibiting Babasaheb and other Dalits from going to the tank or taking water from it until further orders, the Satyagraha was held on a much larger scale on December 26, 1927.
    • Although most people wanted to go ahead, the Satyagraha was suspended on the advice of Ambedkar, and unlike the last time, no water was drawn from the Chavadar tank.
    • Ambedkar and his followers burnt the Manusmriti, a powerful rejection of the caste system, for the first time in symbolic action.

    Significance of the Satyagraha

    • The Mahad Satyagraha is considered to be the “foundational event” of the Dalit movement.
    • The community collectively displayed its resolve to reject the caste system and assert their human rights for the first time.
    • It became the blueprint for organizing future movements against the caste system and its practices.
    • It marked an important point in Ambedkar’s political journey, catapulting him to the leadership of the downtrodden and oppressed classes in the country.

     

    Try this PYQ:

    Which of the following parties were established by Dr. B. R. Ambedkar?

    1. The Peasants and Workers Party of India
    2. All India Scheduled Castes Federation
    3. The Independent Labour Party

    Select the correct answer using the codes given below:

    (a) 1 and 2 only

    (b) 1, 2 and 3

    (c) 1 and 3 only

    (d) 2 and 3 only

     

    Post your answers here.

     

  • What is Magnetoresistance?

    magnet

     

    Researchers in the UK, led by Nobel laureate Andre Geim, have discovered magnetoresistance in graphene – a single-atom-thick layer of carbon atoms bonded in a honeycomb pattern – that further distinguishes this ‘wonder’ material.

    Graphene’s anomalous Giant Magnetoresistance (GMR)

    • Graphene displayed an anomalous giant magnetoresistance (GMR) at room temperature.
    • GMR is the result of the electrical resistance of a conductor being affected by magnetic fields in adjacent materials.
    • It is used in hard disk drives and magnetoresistive RAM in computers, biosensors, automotive sensors, micro-electromechanical systems, and medical imagers.

    What is GMR?

    • GMR is a phenomenon where the electrical resistance of a conductor is affected by magnetic fields in adjacent materials.
    • Say a conductor is sandwiched between two ferromagnetic materials (commonly, metals attracted to magnets, like iron).
    • When the materials are magnetised in the same direction, the electrical resistance in the conductor is low.
    • When the directions are opposite each other, the resistance increases.

    Significance of the finding

    • The magnetoresistance observed in the graphene-based device was almost 100 times higher than that observed in other known semimetals in this magnetic field range.
    • In the study, the magnetoresistance in monolayer graphene at 27º C held between two layers of boron nitride increased by 110% under a field of 0.1 tesla.
    • To compare, the magnetoresistance in these conditions increases by less than 1% in normal metals.
    • The team attributed this to the presence of a ‘neutral’ plasma and the electrons’ mobility.

    Try this MCQ

    Which of the following best describes magnetoresistance?

    (a) The magnetic resistance of a conductor to electrical current flow

    (b) The phenomenon where the electrical resistance of a conductor is affected by magnetic fields in adjacent materials

    (c) The ability of a conductor to produce a magnetic field when an electrical current is passed through it

    (d) The resistance of a magnet to demagnetization by an external magnetic field

     

    Post your answers here.

     

  • Bioluminescence observed at Visakhapatnam beach

    bio

    The blooms of Noctiluca Scintillans, commonly known as “sea sparkle or bioluminescence” are being witnessed along the coasts of Visakhapatnam, AP.

    Noctiluca Scintillans

    • Scintillans is a bioluminescent specie that brightens the seawater during the night.
    • It grazes on other micro-organisms such as larvae, fish eggs, and diatoms. But the unicellular phytoplankton that lives inside it can photosynthesize, turning sunlight into energy.
    • They help their host cell survive even when food was scarce.
    • Thus, N. Scintillans acts as both a plant and an animal

    Threats posed

    • According to marine experts, the phenomenon is an indicator of climate change.
    • While smaller blooms may be harmless, slow-moving larger blooms may have an impact on deep-sea fishes.
    • The toxic blooms of N. Scintillans were linked to massive fish and marine invertebrate kills.
    • Though the species does not produce a toxin, it was found to accumulate toxic levels of ammonia, which is then excreted into the surrounding waters, possibly acting as the killing agent in blooms.
    • They have displaced microscopic algae called diatoms, which form the basis of the marine food chain. This has deprived food for the planktivorous fish.

    Back2Basics: Bioluminescence

    • It is the property of a living organism to produce and emit light.
    • Animals, plants, fungi and bacteria show bioluminescence. A remarkable diversity of marine animals and microbes are able to produce their own light.
    • It is found in many marine organisms such as bacteria, algae, jellyfish, worms, crustaceans, sea stars, fish and sharks.
    • Luminescence is generally higher in deep-living and planktonic organisms than in shallow species.

     

  • Madhya Pradesh’s Gond Painting gets GI Tag

    gond

    The Gond painting of Madhya Pradesh has received the prestigious Geographical Indication (GI) tag.

    Other recent GI tags awarded in UP

    10 products from UP got GI Tag on March 31:

    • Aligarh Tala
    • Bakharia Brassware
    • Banda Shazar Patthar Craft
    • Pratapgarh Aonla (Amla)
    • Ramnagar Bhanta (Brinjal)
    • Muzaffarnagar Gur (jaggery)
    • Banarasi Pan
    • Nagina Wood Craft
    • Hathras Hing
    • Banaras Langda Aam

     

    Gond Art

    • Gond painting is a traditional art of Madhya Pradesh and belongs to the Gond tribe.
    • Patangarh village of Dindori district is famous for Gond paintings, where there is an artist in every house.
    • Their work is famous in the state and abroad for its unique style, theme, and motifs.
    • Gond art has been passed down through generations, traditionally adorning the walls of each artist’s home in Patangarh.

    Features of Gond Painting

    • Gond paintings showcase the beauty of nature, including trees, plants, animals, the moon, sun, river, drains, God, and Goddesses.
    • The paintings also portray daily life activities such as food, plough making, and even how the king used to fight.

    Back2Basics: Geographical Indication (GI)

    • A GI is a sign used on products that have a specific geographical origin and possess qualities or a reputation that are due to that origin.
    • Nodal Agency: Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry
    • India, as a member of the World Trade Organization (WTO), enacted the Geographical Indications of Goods (Registration and Protection) Act, 1999 w.e.f. September 2003.
    • GIs have been defined under Article 22 (1) of the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement.
    • The tag stands valid for 10 years.

     

  • India’s Philosophy Stand Out As A Beacon To The World

    Philosophy

    Central Idea

    • The philosophical underpinnings of India’s civilization are unique and powerful, and they empower India to withstand waves of invasions, natural calamities, and societal challenges. India’s worldview and approach towards human life make India stand out as a beacon to the world. However, many Indians remain ignorant of their own philosophical heritage, and building on these foundational values can serve as building blocks for India’s soft power.

    The Fundamentals of Indian Philosophy

    • Indian philosophy cannot be ascribed to any particular scripture.
    • The fundamentals of the perceived philosophy of India have come from many scriptures, and the Indian approach is to let a thousand flowers bloom.

    The Five Tenets that Make India Stand Out

    India’s philosophy has at least five fundamental tenets that make it stand out: 1. Spiritual democracy, 2. Unity in diversity, 3. Confluence with nature, 4, antyodaya, and 5. vasudhaiva kutumbakam. These tenets reflect the teachings of sages and philosophers such as Gautama Buddha, Adi Shankara, and Guru Nanak.

    1. Spiritual Democracy: India rejects any monopolistic approach to ways of worship, and it welcomes diversity in ways of worship. This approach reflects the fundamental unity of all that exists, and sages call it by various names.
    2. Unity in Diversity: India’s unity is inherent in its diversity, and this diversity is our innate unity that manifests in myriad ways. India not only accommodates but also celebrates the pervasive diversity.
    3. Confluence with Nature: India does not aspire to conquer nature, but instead, it has a tradition of sincere and deepest gratitude towards nature. Many Indian traditions and rituals reflect this approach, and sustainability is a part of our philosophy of human life.
    4. Antyodaya: India’s unique concept of antyodaya puts the last man first. The most deprived are the most deserving when it comes to the distribution of the fruits of development. Antyodaya encompasses both social and economic justice and takes us beyond the binary of capitalism and socialism.
    5. Vasudhaiva Kutumbakam: India has imagined the entire world as one family, where values like mutuality, sharing, and collectivism are given primacy. This approach nips in the bud all the uncalled-for apprehensions about ultra-nationalistic or jingoistic approaches.

    India’s Philosophical Heritage Can Build on Its Soft Power

    • India can build on its unique philosophical heritage, which can serve as building blocks of India’s soft power.
    • India’s foundational values are needed now more than ever, as the global community faces conflicts and wars emanating from weird ideas of supremacy, oneupmanship, and monopolistic spirituality.

    Conclusion

    • India’s philosophy and approach towards human life and worldly concerns are unique and powerful, and they make India stand out as a beacon to the world. India’s soft power can build on its unique philosophical heritage, and India can use this to assert itself even in the most complex and unpredictable future. The key challenge is to establish that India is capable of walking the talk and using its philosophy to deal with societal challenges. Indian philosophy empowers us to handle the contemporary challenges, and it has gained India huge goodwill among the global community.

    Mains Question

    Q. India’s philosophy and approach towards human life and worldly concerns are unique and powerful, and they make India stand out as a beacon to the world. Discuss

  • [Sansad TV] Perspective: Cluster Farming

    [Sansad TV] Perspective: Cluster Farming

    Central idea

    • Five private firms have been allowed by the Central Government to engage in cluster farming of specific horticulture crops on a pilot basis.
    • The goal of this initiative is to enhance the competitiveness of Indian produce on a global scale and increase the earnings of farmers.
    Overview of the Horticulture Sector in India

    India is the world’s second-largest producer of horticulture crops. It is a leading producer of fruits such as Mango, Banana, Pomegranate, Sapota, Acid Lime and Amla.
    UP was the top state in horticulture production in 2021-22, followed by MP and West Bengal. West Bengal, UP and MP were the top states in vegetable production.
    Maharashtra followed by AP and UP were the top states in fruit production.
    The area under horticulture crops increased to 27.74 million hectares in 2021-22, producing around 341.63 million tonnes.

    What is Cluster Farming?

    • Cluster farming is a strategy aimed at improving the global competitiveness of Indian produce and boosting farmers’ income.
    • It involves the regional concentration of targeted horticulture crops to allow for specialization in production, post-harvest management, marketing, and exports.

    Features of cluster farming include

    • Collaboration: It is a collaborative effort where farmers work together to share resources, knowledge, and expertise to achieve common goals.
    • Resource sharing: It involves sharing resources such as land, water, labor, and equipment to achieve economies of scale and reduce the cost of production.
    • Specialization: It allows farmers to specialize in particular crops or livestock, which enables them to become experts in their chosen areas and increase their productivity.
    • Marketing: It enables farmers to market their products more effectively by pooling their resources and creating a unified marketing strategy.
    • Infrastructure development: It involves the development of shared infrastructure such as irrigation systems, warehouses, and processing facilities, which improves efficiency and reduces costs.
    • Environmental sustainability: It promotes environmental sustainability by encouraging farmers to adopt eco-friendly farming practices, such as conservation agriculture and integrated pest management.

    Why need Cluster Farming in India?

    There are several reasons why cluster farming is needed in India:

    • Income push for small farmers: India has a high percentage of small and marginal farmers who own less than 2 hectares of land. Cluster farming can help small farmers pool their resources and achieve better access to inputs, services, and markets.
    • Youth retention: Many young people are leaving rural areas in search of better economic opportunities in urban areas. Cluster farming can help create job opportunities in rural areas and improve the livelihoods of rural communities.
    • Supply chains utilization: India’s agriculture supply chain is fragmented, resulting in low prices for farmers and high prices for consumers. Cluster farming helps farmers create a unified supply chain and market their products effectively, reducing intermediaries and improving prices.
    • Filling infrastructure gap: Many parts of rural India lack basic infrastructure such as roads, irrigation systems, and storage facilities. Cluster farming can help farmers share the cost of building and maintaining such infrastructure, which can improve efficiency and reduce costs.
    • Mitigate climate change: Climate change is increasingly affecting India’s agriculture sector, with frequent droughts, floods, and extreme weather events. Cluster farming can help farmers adopt climate-resilient farming practices and reduce their vulnerability to climate change.

    Key initiative: Horticulture Cluster Development Programme

    • The CDP is a recently launched central scheme with an outlay of Rs 2,200 crore.
    • It is a central sector programme aimed at growing and developing identified horticulture clusters to make them globally competitive.
    • Under the CDP, financial assistance of up to Rs 100 crore will be provided to projects based on their size.

    Implementation strategy

    • The National Horticulture Board (NHB) is responsible for implementing it.
    • The list of 55 clusters, each with a focus on specific crops, includes states such as Arunachal Pradesh, Assam, West Bengal, Manipur, Mizoram, Jharkhand, and Uttarakhand.
    • During the pilot phase, it was implemented in 12 clusters across 11 states and union territories.

    Objectives of the CDP

    • Export promotion: Improve exports of targeted crops by 20% and create cluster-specific brands to enhance competitiveness
    • Sectoral reform: Address all major issues related to the Indian horticulture sector including pre-production, production, post-harvest management, logistics, marketing and branding
    • Leverage geographical specialisation:  Promote integrated and market-led development of horticulture clusters
    • Converge with other government initiatives: Such as the Agriculture Infrastructure Fund
    • Attract investment

    Other initiatives

    (1) Mission for Integrated Development of Horticulture (MIDH)

    • MIDH is a centrally sponsored scheme for the holistic growth of India’s horticulture sector, covering fruits, vegetables, and other areas.
    • The government of India contributes 60% of the total outlay for developmental programs in all states (except North Eastern and Himalayan states where it contributes 90%), with 40% contributed by state governments.

    (2) Project CHAMAN

    • The project name stands for “Coordinated Horticulture Assessment and Management using Geo-informatics.”
    • It is focused on leveraging geo-informatics, which involves using spatial data, to provide assistance to farmers and improve the overall management of the horticulture sector.
    • It aims to provide farmers with accurate and up-to-date information on factors such as weather patterns, soil moisture levels, and disease outbreaks.

    (3) National Horticulture Board (NHB)

    • NHB is a government organization that provides financial assistance and other support to promote the development of the horticulture sector.
    • The NHB provides support for various activities, including production, post-harvest management, marketing, and export.

    Hurdles for horticulture development in India

    • Fragmented landholdings: Land fragmentation is a major issue in many horticulture clusters in India, which can make it difficult for farmers to achieve economies of scale and adopt modern farming practices.
    • Inadequate market linkages: Many farmers in horticulture clusters have limited access to markets, which can result in low prices for their produce. Improving market linkages is crucial for promoting the growth of the horticulture sector.
    • Pest and disease management: Pests and diseases can pose a major threat to horticulture crops, and managing these risks can be challenging for small-scale farmers who may lack access to information and resources.

    Way forward

    • Land consolidation: The government could encourage land consolidation in horticulture clusters, which would enable farmers to achieve economies of scale and adopt modern farming practices.
    • Facilitate access to finance: The government could work with financial institutions to provide credit and other financial services to small-scale farmers in horticulture clusters. This would enable farmers to invest in their farms and adopt new technologies.
    • Establish market linkages: The government could work with private sector players to develop market linkages for farmers in horticulture clusters. This would help farmers get better prices for their produce and improve their livelihoods.
    • Pest and disease management: The government could provide training and support to farmers in horticulture clusters on pest and disease management. This would help farmers adopt eco-friendly pest and disease management practices and reduce crop losses.

  • Supreme Court rulings on Encounters

    encounter

    Central idea: A gangster-turned-politician son and his aide were killed in an encounter in UP.

    Why discuss this?

    • The National Human Rights Commission (NHRC) and the Supreme Court have laid down proper guidelines and procedures to be followed to prevent any misuse of power by the law enforcement agencies.
    • However, this encounter has brought to the forefront the issue of extra-judicial killings or “encounters” by the police in India.

    Supreme Court Guidelines on Encounters

    • In September 2014, a bench of then CJI RM Lodha and Rohinton Fali Nariman issued detailed guidelines.
    • These guidelines came in the case “People’s Union for Civil Liberties v State of Maharashtra”.
    • The guidelines enumerated 16 points to be followed in the matters of investigating police encounters in the cases of death as the standard procedure for a thorough, effective and independent investigation-
    1. Registration of a first information report (FIR) as mandatory
    2. Magisterial inquiry
    3. Keeping written records of intelligence inputs
    4. Independent investigation by bodies such as the CID
    5. A Magisterial Inquiry must invariably be held in all cases of death which occur in the course of police action
    6. Next of kin of the deceased must invariably be associated in such inquiry
    7. In every case when a complaint is made against the police alleging commission of a criminal act on their part, which makes out a cognizable case of culpable homicide, an FIR to this effect must be registered under appropriate sections of the IPC
    8. Such an inquiry made under Section 176 of the Code of Criminal Procedure, 1973, must show “whether use of force was justified and action taken was lawful.”
    9. Whenever the police receives any intelligence or tip-off on criminal movements or activities relating to the commission of grave criminal offence, “it shall be reduced into writing in some form (preferably into case diary) or in some electronic form.”
    10. Following such tip-off or intelligence, if an encounter takes place and a firearm is used by the police party, resulting in death, then an FIR to that effect has to be registered and forwarded to the court under Section 157 without delay.
    11. Provisions for an independent investigation into the encounter
    12. The requirements/norms must be strictly observed in all cases of death and grievous injury in police encounters by treating them as law declared under Article 141 of Indian Constitution.
    13. The law declared by the Supreme Court shall be binding on all other courts in Indian Territory.
    14. NHRC’s involvement is not necessary, “unless there is serious doubt about independent and impartial investigation.”
    15. The information about the incident must be sent to NHRC or the State Human Rights Commission.

    NHRC Guidelines on Encounters

    • The National Human Rights Commission (NHRC) has asked all states and Union Territories to ensure that police follow a set of guidelines in cases where death is caused in police encounters.
    • These included the police’s duty to enter all information received about encounter deaths in an “appropriate register” and provisions for investigation by independent agencies like the State CID.

    Issues with such encounters

    • Defies rule of law: This practice undermines the rule of law and due process, and violates the right to life and other human rights.
    • Use of force: There have been allegations of police and security forces using excessive force.
    • Fake encounters: There have been instances of staging encounters, and conducting fake encounters to eliminate suspects without following the due legal process.
    • Autocracy: These incidents have raised concerns about impunity, lack of accountability, and the need for reforms to ensure that law enforcement officials are held accountable for their actions.
    • Distrust among the public: Public often tend to lose belief among the constitutional process of justice.

    Why are such encounters popular among public?

    • Lack of trust in the legal system: Some people may view extrajudicial killings and encounters as a way of bypassing the legal system which they may view as corrupt or inefficient.
    • Perception of safety: There may be a belief among some members of the public that such encounters can help to deter criminals and make their communities safer.
    • Frustration with the slow pace of justice: The Indian legal system can be slow and protracted, and some people may view extrajudicial killings and encounters as a way to expedite the process of justice.
    • Lack of awareness about human rights: Some people may not be aware of the human rights implications of such encounters, or may view them as a necessary means to an end.

    Conclusion

    • It is important to note, however, that extrajudicial killings and encounters are illegal, undermine the rule of law, and violate human rights.
    • They also carry the risk of abuse, and can result in innocent people being targeted or killed.
    • Therefore, such practices cannot be justified or condoned in a democratic and law-abiding society.

    Back2Basics: National Human Rights Commission

    • NHRC is an independent statutory body established in India on 12 October 1993 under the Protection of Human Rights Act, 1993.
    • It is responsible for the protection and promotion of human rights, and prevention of their violations.
    • It is empowered to investigate complaints of human rights violations and recommend appropriate remedial measures.
    • It also monitors the human rights situation in the country, undertakes research and advocacy, and conducts various educational and awareness programs to promote human rights awareness and sensitivity among various sections of society.

     

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