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Subject: Economics

  • Investment lessons from the India-EFTA trade deal

    Why in the News? 

    India needs a clear Free Trade Agreement policy, especially in dealing with International Trade and Foreign Investment Laws.

    About Free Trade Agreement:

      • A Free Trade Agreement between two or more countries aims to reduce or eliminate barriers to trade, such as tariffs, quotas, and other restrictions, to facilitate the flow of goods and services across borders.
      • Its significance for India: It can increase market access for Indian goods and services, boost exports, attract foreign investment, stimulate economic growth, create employment opportunities, and enhance competitiveness through exposure to international markets and technologies.
    • Present status of India’s Involvement in FTA: 
      • India is involved in various free trade arrangements, including the South Asian Free Trade Area (SAFTA), the Association of Southeast Asian Nations (ASEAN) Free Trade Area, the India-Japan Comprehensive Economic Partnership Agreement (CEPA), and negotiations with the European Union for a free trade agreement, among others.
      • Negotiations for India’s FTAs with countries like the United Kingdom and the European Union (EU) appear to have stalled amidst the current parliamentary elections in India.

     

    Why does India need to rebuild its Free Trade Agreement policy?

    • For Comprehensive Economic Treaties: Combining trade and investment negotiations provides India with clear negotiating leverage to strike beneficial deals.
      • It allows India to leverage concessions in trade for advancements in investment, and vice versa. This approach enhances India’s bargaining power in FTA negotiations.
    • For Scope Expansion: India should expand the scope of investment issues by incorporating provisions for protecting foreign investors under international law, ensuring their confidence in investing in India.
      • It will help India to establish an efficacious dispute settlement mechanism under international law to resolve investment disputes effectively.
      • Providing enforceable legal protection to foreign investors is crucial for boosting their confidence, especially amidst declining foreign direct investment levels in India.
    • For addressing the drop in FDI Levels: The policy should address the decline in foreign direct investment levels in India by instilling confidence among foreign investors through robust legal protection and dispute resolution mechanisms.

    Investment lessons from the India-EFTA Trade deal:

    • The India-EFTA FTA includes a comprehensive investment chapter, which is missing in recent Indian FTAs with countries like Australia, UAE, and Mauritius.
    • The agreement includes provisions wherein EFTA countries commit to making honest endeavors to increase FDI to India and facilitate job generation, codifying an obligation of conduct rather than an obligation of result.
    • Economic theory highlights the close linkage between trade and investment. While earlier Indian FTAs included both binding trade rules and investment protection, recent ones decoupled international trade law from international investment law.
    • The India-EFTA FTA, emphasizes combining trade and investment negotiations in one comprehensive economic treaty, that is ‘FTA 3.0 Approach’, which represents a departure from the decoupling approach seen in recent FTAs.

    Way Forward:

    • Capacity Building: Enhance the capacity of Indian negotiators and policymakers to understand complex trade and investment issues, including legal frameworks, dispute resolution mechanisms, and international best practices.
    • Integrated Negotiation Approach: Adopt an integrated approach to FTA negotiations, wherein trade and investment aspects are negotiated together within a single agreement, ensuring coherence and synergy between the two.

    Mains PYQ:

    Q Quadrilateral Security Dialogue (Quad) is transforming itself into a trade bloc from a military alliance, in present times Discuss.

    https://www.thehindu.com/opinion/op-ed/investment-lessons-from-the-india-efta-trade-deal/article68168582.ece#:~:text=Providing%20enforceable%20legal%20protection%20to,a%20higher%20economic%20growth%20trajectory.

  • Export-Import in the Agricultural sector

    Why in the news? 

    India’s agricultural exports have declined in the fiscal year ended March 31, 2024, on the back of shipment curbs on a host of commodities, from cereals and sugar to onions.

    The Need for a New Export-Import Policy for Agriculture:

    • Decline in Agricultural Exports: India’s agricultural exports fell by 8.2% in the fiscal year ended March 31, 2024, due to shipment curbs on various commodities, including cereals, sugar, and onions. This decline highlights the volatility and vulnerability of agricultural trade.
    • Impact on Export Restrictions: Export restrictions imposed by the government, such as bans on sugar and non-basmati rice exports, have led to a significant decrease in export values.
    • Market Stability: Farmers and agri-traders require policy stability and predictability to make informed decisions. Abrupt changes in export-import policies, such as sudden bans or restrictions, can disrupt trade and adversely affect agricultural businesses.
    • Need for comprehensive framework: Export-import policies should strike a balance between the interests of producers and consumers. While export restrictions may benefit consumers by stabilizing prices, they can result in revenue losses for producers. A more predictable and rules-based policy framework is needed to ensure fairness and transparency.
    • Low tariffs on certain commodities: The current import policy, characterized by low on certain commodities like pulses and edible oils, contradicts the government’s objective of promoting crop diversification.

    Measures that needs to be taken in the present scenario:

    • Long-Term Goals for the Farm Sector: A new export-import policy should align with the long-term goals of the agricultural sector, including sustainable production practices, crop diversification, and increasing farmer incomes.
      • Balancing short-term consumer needs with long-term agricultural sustainability is essential for the sector’s growth and resilience.
    • Rationalizing Export-Import Policy: The government post-election may need to rationalize the export-import policy by introducing measures such as temporary tariffs instead of outright bans or quantitative restrictions.
      • A rational and coherent policy framework will support the growth and competitiveness of India’s agricultural sector in the global market.
    • Higher Import tariffs: It could incentivize domestic production of pulses and oilseeds, reducing dependence on imports and supporting farmers.

    Conclusion: Export-import policies should strike a balance between the interests of producers and consumers. While export restrictions may benefit consumers by stabilizing prices, they can result in revenue losses for producers. A more predictable and rules-based policy framework is needed to ensure fairness and transparency.

    Mains PYQ: 

    Q In the view of the declining average size of land holdings in India which has made agriculture non – viable for a majority of farmers should contract farming and land leasing be promoted in agriculture? critically evaluate the pros and cons.(UPSC IAS/2015)

  • The Socio-ecological effects of LPG price hikes

    Why in the News? 

    The ACCESS survey (2014-2015), conducted by the Council on Energy, Environment and Water, found LPG’s cost to be the foremost barrier to its adoption and continued use in rural poor households.

    Government Initiatives for LPG Fuel:

    • Government Initiatives: The Indian government has promoted using LPG (liquefied petroleum gas) as a clean cooking fuel, particularly in rural households.
      • These initiatives include the Rajiv Gandhi Gramin LPG Vitrak scheme, the ‘PAHAL’ scheme for direct benefit transfers, and the Pradhan Mantri Ujjwala Yojana (PMUY) aimed at providing LPG connections to below-poverty-line households.
    • Subsidies and Incentives: The government has provided subsidies and incentives to encourage the adoption of LPG without subsidies for the people who can afford it.
      • For example, the ‘Give it Up’ program encouraged consumers to voluntarily surrender their LPG subsidies, which were transferred to below-poverty-line households.

    Challenges:

    • Affordability: Despite government efforts, the affordability of LPG remains a challenge for many households, especially those in rural and below-poverty-line communities. Reports indicate that LPG prices in India were among the highest globally around ₹300/litre.
    • Dependency on Traditional Fuels: Studies, such as the one conducted in the Jalpaiguri district of West Bengal, highlight the continued dependency of local communities on traditional fuelwood for cooking.
    • Forest Dependency: The persistent use of fuelwood has implications for forest conservation and livelihoods, particularly in regions with degraded forests like Jalpaiguri.

    Way Forward: 

    • Need for Comprehensive Solutions: While government initiatives have aimed to promote LPG use, addressing affordability issues and ensuring access to clean cooking fuels for marginalized communities require comprehensive solutions.
    • Targeted Subsidies: Implement targeted subsidies for LPG cylinders to make them more affordable for rural and below-poverty-line communities. These subsidies can be based on income levels or geographic locations to ensure that those most in need receive assistance.

    Mains PYQ: 

    Q In what way could replacement of price subsidy with direct benefit Transfer (DBT) change the scenario of subsidies in India? Discuss.(UPSC IAS/2015)

  • India is now Third-Largest Producer of Solar Power

    Why in the News? 

    In 2023, India overtook Japan to become the world’s third-highest producer of solar power, according to a report by the International Energy Analytics Agency Ember.

    Global Solar Energy Production:

    • The leading producer of solar power in the world is China which produced 584 BU of solar power in 2024 – more than the next four countries combined (the United States, Japan, Germany and India).
    • India generated 113 billion units (BU) of solar power in 2023 compared to Japan’s 110 BU.
      • The installed solar energy capacity has increased by 30 times in the last 9 years and stands at 81.81 GW as of Mar 2024.
      • India’s solar energy potential is estimated to be 748 GWp as estimated by National Institute of Solar Energy (NISE).
    • Power demand in Japan decreased by 2% (2 BU) in 2023 after rising in 2021 and 2022, thus allowing India to overtake Japan.

    Other factors to make India the third-largest Solar power producer in 2023:

    • Government Initiatives: India has implemented various policies and initiatives to promote renewable energy, particularly solar power.
      • The government launched the Jawaharlal Nehru National Solar Mission (JNNSM) in 2010, aiming to promote the development and use of solar energy in the country.
      • Subsequently, various state-level policies and incentives were introduced to encourage solar power generation.
      • For example Gujarat Solar Energy Policy (Target is 36 GW of solar energy by 2036).
    • Investment and Financing: There has been significant investment in the solar power sector in India, both from domestic and international sources.
      • For example PM Surya Ghar, Muft Bijli Yojana, the scheme is projected to entail an investment of ₹75,000 crore.
    • Favorable Geography: India has abundant sunlight throughout the year, making it well-suited for solar power generation. About 5,000 trillion kWh per year of energy is incident over India’s land area with most parts receiving 4-7 kWh per sqm/day.
    • Increasing Energy Demand: India’s growing population and economy have led to a rising demand for energy. Electricity demand in India rose 7% in 2023 and is likely to average growth of 6% a year through 2026 on higher economic activity, according to the International Energy Agency.
    • International Collaboration: India has collaborated with various countries and international organizations to leverage expertise, technology transfer, and funding for solar projects. For example  International Solar Alliance (ISA).

    Way Forward:

    • Invest in High-Efficiency Panels: Choose solar panels with high-efficiency cells, such as monocrystalline photovoltaic cells, which can convert a greater percentage of sunlight into usable electricity
    • Use Energy Storage Solutions: Consider integrating energy storage systems, such as batteries, to store excess energy generated during the day and use it at night or during periods of low sunlight, thereby increasing the overall efficiency of the solar energy system.

    Mains PYQ: 

    Q Describe the benefits of deriving electric energy from sunlight in contrast to the conventional energy generation. What are the initiatives offered by our government for this purpose? (UPSC IAS/2020)

  • Unemployment Vs Wages

    Why in the news?

    Recently, there have been contentious talks regarding Pakistan’s unemployment being lower than India’s.

    According to Keynes, lower wage rate will lead to lower income of workers and thus to lower demand of goods. Lower demand will lower output that in turn will lower employment.

    Issues related to Unemployment vs Wages

    • Questioning on Data Accuracy and Interpretation: There is skepticism about the accuracy of unemployment data, particularly regarding the CMIE Consumer Pyramids Household survey. This raises questions about the basis of claims regarding unemployment rates and the subsequent policy responses.
    • Labor Force Participation: Concerns are raised about the significant withdrawal of individuals from India’s labor force, indicating potential issues with labor force participation rather than solely unemployment rates.
    • Youth Unemployment: The high youth unemployment rate of 45% is highlighted as a significant concern, suggesting challenges in integrating young people into the workforce and addressing their employment needs.
    • Informal Employment: The prevalence of informal employment, such as subsistence agriculture and informal wage employment, is noted as a structural issue in the labor market, potentially impacting wages and job quality.
    • Wage Levels: Despite low reported unemployment rates, there are concerns about the adequacy of wages, particularly for the poor. This raises questions about the quality of employment and the extent of underemployment or disguised unemployment.
    • Policy misalignment: Certain policy proposals, such as increasing public sector employment or implementing fiscal job guarantees, are critiqued for potentially misdiagnosing the problem and offering unsustainable solutions that may not address underlying wage issues.

    Steps taken by the Government: 

    • Pradhan Mantri Rojgar Protsahan Yojana (PMRPY): This scheme incentivizes employers to generate employment by having the government pay the entire 12% employer’s contribution to the Employees’ Provident Fund and Employees’ Pension Scheme for new employees for the first three years of their employment
    • Pradhan Mantri Mudra Yojana (PMMY): This scheme provides collateral-free loans up to ₹10 lakh to micro and small businesses and individuals to help them set up or expand their enterprises, thereby promoting self-employment.
    • Aatmanirbhar Bharat Package: This economic stimulus package, announced in response to the COVID-19 pandemic, includes various long-term schemes and policies aimed at making India self-reliant and creating employment opportunities.
    • Garib Kalyan Rojgar Abhiyaan: This 125-day campaign was launched to boost employment and livelihood opportunities for migrant workers and others affected in 116 districts across 6 states.
    • PM GatiShakti: This is a multi-modal connectivity plan that aims to create infrastructure and generate employment opportunities in sectors like roads, railways, airports, ports, and logistics.

    Way forward: 

    • Addressing Labor Force Participation: Implement policies aimed at increasing labor force participation, particularly among youth and marginalized groups, by creating more formal employment opportunities.
    • Improving Informal Employment Conditions: Develop strategies to formalize the informal sector by providing incentives for informal employers to register their businesses, improve working conditions, and ensure compliance with labor laws.
    • Enhancing Wage Levels: Take steps to improve wage levels, particularly for low-skilled workers engaged in subsistence agriculture, marginal self-employment, and informal wage employment.

    Mains PYQ:

    Q Besides the welfare schemes, India needs deft management of inflation and unemployment to serve the poor and the underprivileged sections of the society. Discuss.

  • An Inheritance Tax will help reduce Inequality

    Why in the news? 

    A remark by Chairman of Indian Overseas Congress Sam Pitroda on implementing an inheritance tax as a tool of wealth redistribution has sparked massive debates.

    The Negative Impact of Inequality:

    • Growth affected: Inequality harms growth in the medium-to-long run by reducing firm productivity, lowering labor income, and diverting resources away from essential rights like education.
    • Inequal Opportunity: In unequal countries like India, where one is born greatly influences lifetime outcomes, with almost a third of consumption variation being explained by the place of residence (state, city, or village).
    • Concentration of Wealth: The richest 1% holding 40% of India’s wealth underscores the vast wealth disparities that exacerbate inequality.
    • Skewed Distribution of Gains: Research indicates that the gains from India’s growth over the last two decades have disproportionately benefited high-income urban residents, further exacerbating inequality.

    What is Inheritance Tax? 

    • An inheritance tax is a tax levied on the assets or wealth passed down from one generation to another upon the death of the owner.
    • Unlike a wealth tax, which is recurring and applied to all physical and financial assets an individual owns, an inheritance tax is a one-time tax specifically targeting intergenerational transfers of wealth.

     

    How an Inheritance Tax could help reduce Inequality?

    The Constitution mandates equality of status and opportunity, obliging the government to take steps to reduce disparities arising from accidents of birth.

    • Reduction of Wealth Concentration: By taxing large inheritances, an inheritance tax helps to redistribute wealth from the wealthiest individuals and families to the broader society.
    • Encouragement of Productive Investments: Inheritance taxes can encourage wealthy individuals to invest their wealth in productive activities rather than simply passing it down to heirs.
    • Incentive for Innovation: Critics may argue that inheritance taxes disincentivize innovation by reducing the incentive to accumulate wealth to pass on to future generations.
    • Funding for Public Expenditure: Revenue generated from inheritance taxes can be used to fund essential public services and social programs, such as education, healthcare, infrastructure, and poverty alleviation initiatives.
    • Historical Effectiveness: Historical examples, such as the estate duty in India between 1953 and 1985. It reduced the top 1% personal wealth share from 16% to 6% between 1966 and 1985.
    Another approach is the Land Value Tax (LVT): The Land Value Tax (LVT) is a tax system that levies charges on the unimproved value of land. Unlike traditional property taxes, which take into account both the value of the land and the value of any buildings or improvements on the land, the LVT focuses solely on the value of the land itself.

     

    Conclusion: Tackling wealth inequality requires a multifaceted approach that includes measures such as inheritance taxation, wealth taxation, and the Land Value Tax (LVT). These measures not only help to redistribute wealth and promote economic fairness but also contribute to fostering a more inclusive and prosperous society where opportunities are more evenly distributed.

    Mains PYQ:

    Q Comment on the important changes introduced in respect of the Long term Capital Gains Tax (LCGT) and Dividend Distribution Tax (DDT) in the Union Budget for 2018-2019.

  • CBDC pilot programmes for CPs, CDs likely: RBI

    Why in the news?

    RBI Governor Shaktikanta Das unveiled plans for a pilot program targeting the wholesale segment of Central Bank Digital Currency (CBDC) focusing on commercial papers (CPs) and certificates of deposits (CDs).

    What is Central Bank Digital Currency (CBDC)?

    • CBDC is a legal tender to be issued by the central bank in digital form; like rupee notes or coins, which are in physical form.
    • It was announced in the Union Budget 2022-23.
    • Subsequently, the Government amended Section 22 of the RBI Act, 1934 through the Finance Bill 2022. [Ref].
    • Working of CBDC:
      • Like fiat currency, it can also be exchanged between people. Simply, put it’s just like rupee (₹) notes but in digital form (e₹). 
      • However, unlike fiat currency that’s usually stored in banks and hence their liability, CBDC is a liability on the RBI’s balance sheet.
      • That’s why one does not necessarily need to have a bank account to own a digital rupee.

     

    About Commercial Papers (CPs) and Certificates of Deposits (CDs)

    Commercial Papers Certificates of Deposits
    Type of Instrument Unsecured promissory note Fixed-income financial instrument
    Issuer Large corporations, primary dealers, financial institutions Scheduled Commercial Banks, All-India Financial Institutions
    Maturity Period 1 to 364 days 3 months to 1 year (for SCBs), 1 to 3 years (for financial institutions)
    Minimum Investment Rs. 5 lakh or multiples thereof Rs. 1 lakh or multiples thereof
    Credit Rating Requirement Minimum credit rating required (e.g., A-2) from recognized rating agencies Typically issued by highly rated banks and financial institutions
    Collateral Unsecured Not applicable
    Purpose Short-term funding for corporations Short to mid-term investment for individuals and institutions
    Interest Rate Typically higher than bonds, fluctuates with market conditions Typically fixed, higher than savings accounts, fluctuates with market conditions
    Investment Eligibility Individuals, banking companies, corporate bodies (registered or incorporated in India), NRIs, FIIs, etc. Individuals, banking companies, other corporate bodies, NRIs, FIIs, etc.
    Issuing and Paying Agent (IPA) Only scheduled banks act as Issuing and Paying Agent Not applicable
    Trading Actively traded in Over-the-Counter (OTC) market, reported on Fixed Income Money Market and Derivatives Association of India (FIMMDA) reporting platform Not publicly traded
    Dematerialized Holding Can be held in dematerialized form through Securities and Exchange Board of India (SEBI)-approved depositories Can be issued in dematerialized form through SEBI-approved depositories

     

    With inputs from: https://www.indiainfoline.com

    PYQ:

    [2020] With reference to the Indian economy, consider the following statements:

    1. ‘Commercial Paper’ is a short-term unsecured promissory note.
    2. ‘Certificate of Deposit’ is a long-term instrument issued by the Reserve Bank of India to a corporation.
    3. ‘Call Money’ is a short-term finance used for interbank transaction.
    4. ‘Zero-Coupon Bonds’ are the interest-bearing short-term bonds issued by the Scheduled Commercial Banks to corporations.

    Which of the pairs above is/are correctly matched?

    (a) 1 and 2 only

    (b) 4 only

    (c) 1 and 3 only

    (d) 2, 3 and 4 only

  • The Clean Energy Transition has become messy

    Why in the news? 

    The war in the Middle East, Russia, and Ukraine, and sanctions by the US have eventually resulted into a fragmented market in the petroleum industry.

    Causes of Fragmentation in the Petroleum Industry:

    • Impact of Sanctions: The sanctions imposed by the US on countries like Venezuela, Iran, and Russia have led to a fragmentation of the petroleum market, with trading relations becoming more regional than global. This fragmentation has reshaped the dynamics of oil supply and demand, with different regions relying on specific suppliers based on geopolitical circumstances and sanctions
    • Regional Trading Patterns: Trading relations in the petroleum industry have shifted regionally, with the US emerging as a major supplier of LNG and products in Europe, Russia becoming the largest supplier of crude to India, and Iran focusing on exports to China despite Western sanctions. This regionalization of trade has altered traditional market dynamics and diversified supply chains.
    • Challenges Faced by Oil Companies: International petroleum majors are experiencing solid profits due to higher production and prices of oil and gas. However, they are confronted with the need to reconcile their investment strategies with net zero carbon emission targets. This balancing act poses a significant challenge for oil companies as they navigate between profitability and sustainability goals
    • Geopolitical Uncertainties: The ongoing conflicts in the Middle East, particularly between Israel and Iran, have added to the complexities of the petroleum market. The region, which holds a significant portion of the world’s petroleum reserves, is facing a mix of warfare, racism, and radicalism, contributing to heightened tensions and uncertainties in the oil industry
    • AI Industry’s Energy Demand: Increasing energy demand from the artificial intelligence (AI) industry for data centers, cloud storage facilities, and crypto mining. This growing demand for electricity poses a challenge as renewables may not be able to meet the requirements, leading to a dilemma for industry leaders committed to achieving net zero carbon emissions.

    What needs to be done?

    • Diversification of Energy Sources: To mitigate the impact of geopolitical uncertainties and sanctions-induced market fragmentation, there is a need for countries to diversify their energy sources.
    • Strengthening Regional Cooperation: Regional cooperation agreements and partnerships can help stabilize petroleum markets and ensure energy security.
    • Promotion of Energy Efficiency: Improving energy efficiency across various sectors, including transportation, manufacturing, and residential buildings, can reduce overall energy consumption and lessen dependence on petroleum products.

    Mains PYQ: 

    Q Discuss the multi-dimensional implications of uneven distribution of mineral oil in the world. (UPSC IAS/2021)

  • This is the year to get the Sustainable Development Goals back on track

    Why in the News? 

    2024 is an election year across the world and newly elected governments need to focus on the all-important sustainability issue. Year 2024 is an election year across the world.

    • At least 64 countries, both developed and developing, accounting for 49% of the world population, will go to the polls.

    Causes of Global Slow Progress: 

    • Impact of Global Crises: The outbreak of the COVID-19 pandemic and other global crises virtually halted progress towards the SDGs. These crises have diverted attention and resources away from sustainable development efforts.
    • Neglect of Environmental Goals: There has been little to no attention towards goals related to the environment and biodiversity, including responsible consumption and production, climate action, life below water, and life on land.
    • Defiance of Integrated Nature of SDGs: The current practice of pursuing SDGs is criticized for defying the integrated and indivisible nature of the goals. This lack of integration hampers efforts to achieve sustainable development outcomes comprehensively.
    • Risk of Environmental Degradation: The slow progress and neglect of environmental goals pose a significant risk of accelerated environmental degradation. This threatens the overarching target of balancing human well-being and a healthy environment.

    Why the world is not on track to achieve most SDGs by 2030?

    • Insufficient Progress: Despite reaffirmations of commitment by world leaders, progress towards achieving the SDGs remains slow. The world is only on track to meet 15% of the 169 targets that comprise the 17 goals.
    • Investment Gap: There is a significant gap in investment for SDGs, particularly in developing countries. The estimated investment gap exceeds $4 trillion, with nearly $2 trillion needed for the energy transition alone.
    • Lack of Synergistic Action: There is a lack of synergistic action in addressing SDGs, despite the integrated nature of the goals. Few studies and empirical evidence exist on the synergies and trade-offs among SDGs, hindering progress.
    • Barriers to Synergies: Various barriers, including knowledge gaps, political and institutional barriers, and economic issues, impede synergistic action.Inadequate data collection, and an inability to attribute co-benefits to specific actions hinder progress.
    • Misaligned Policies: Policies may be misaligned, leading to barriers for meeting greater targets. For example, ambitious renewable energy targets may not align with smaller-scale of steps taken to achieve SDG goal.
    • Limited Understanding of Cost Estimation: Exploiting resources without considering climate change impacts and synergistic opportunities can be detrimental to national and global efforts.

    Way forward:

    • Call for Action: There is a call for action to strengthen the environment for synergistic action, transparently identify opportunities and limits to synergies, and develop reporting frameworks to assess the value created from specific SDG interventions.
    • Urgent Action Areas Identified: The UN SDG Report, 2023 identified five key areas for urgent action, including commitments of governments, concrete policies to eradicate poverty and reduce inequality, strengthening of national and subnational capacity, recommitment of the international community, and strengthening of the UN development system.
    • Global Reaffirmation and Commitment: World leaders acknowledged the situation and reaffirmed their commitments to delivering the SDGs by 2030. However, the effectiveness of these global pronouncements at the ground level remains uncertain.

    Mains PYQ 

    Q National Education Policy 2020 isin conformity with the Sustainable Development Goal-4 (2030). It intends to restructure and reorient education system in India. Critically examine the statement. (2020)

  • National Council for Agriculture and Rural Transformation (NCART): A New Vision for Agriculture Sector

    Why in the news?

    The Centre is contemplating the establishment of the National Council for Agriculture and Rural Transformation (NCART), envisioned as a federal body to formulate policies and programs for the agricultural sector.

    What is NCART?

    • The NCART is a proposed federal body aimed at coordinating and driving actions in the agriculture sector in India.
    • It would have representation of both the Centre and States.
    • The idea for NCART has been proposed by the Ministry of Agriculture and Farmers’ Welfare as part of its 100-day action plan for the new government.
    • It draws inspiration from the Goods and Services Tax (GST) Council.

    Terms of Reference of NCART:

    • Policy Formulation: NCART is envisioned as an overarching federal body responsible for devising policies and programs to promote agricultural and rural development.
    • Coordination: One of the key objectives of NCART is to ensure coordinated actions across various stakeholders involved in the agriculture sector, including the central government, state governments, and other relevant entities.
    • Consultative Body: NCART is expected to include representation from both the central and state governments, similar to the Goods and Services Tax (GST) Council, to ensure a consultative approach in decision-making.
    • Legal Status: While the GST Council is a constitutional body, the exact status of NCART is yet to be finalized.

    India’s Agriculture Expenses:

    • Despite agriculture being a state subject, the Centre has significantly increased budgetary allocations for the Agriculture Ministry.
    • Budgetary allocation for the Ministry of Agriculture and Farmers’ Welfare surged from Rs. 27,662.67 crore in 2013-14 to Rs. 1,25,035.79 crore in 2023-24 BE.