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Subject: Economics

  • Foot and Mouth Diseases in Cattles

    fmd

    Why in the news

    • The foot-and-mouth disease (FMD) has affected around many milch cattle in Uttar Pradesh.

    What is Foot-and-Mouth Disease (FMD)?

    • FMD is a highly contagious viral disease of livestock that has a significant economic impact.
    • The disease affects all cattle, swine, sheep, goats, and other cloven-hoofed ruminants.
    • Intensively reared animals are more susceptible to the disease than traditional breeds.
    • It does not affect horses, dogs, or cats.

    How does it spread?

    • It is a Transboundary Animal Disease (TAD) that deeply affects the production of livestock and disrupts regional and international trade in animals and animal products.
    • It is caused by is an ‘aphthovirus’ of the family Picornaviridae.
    • There are 7 strains (A, O, C, SAT1, SAT2, SAT3, and Asia1) which are endemic in different countries worldwide.
    • Immunity to one type does not protect an animal against other types or subtypes.

    Implications of FMD

    • FMD is characterized by fever and blister-like sores on the tongue and lips, in the mouth, on the teats, and between the hooves.
    • The disease is rarely fatal in adult animals, but there is often high mortality in young animals.
    • The disease causes severe production losses, and while the majority of affected animals recover, the disease often leaves them weakened and debilitated.

    Policy moves to prevent FMD

    • FMD Mukt Bharat Abhiyan (2016-17): Launched under Rashtriya Krishi Vikas Yojana (RKVY) during, it is a program to cover all the states which were not covered under the six-monthly vaccination scheme.
    • National Animal Disease Control Programme (2019): It aims to control of Foot & Mouth Disease and Brucellosis by vaccinating 100% cattle, buffalo, sheep, goat and pig population for FMD and 100% bovine female calves of 4-8 months of age for brucellosis.

    PYQ:

    Q. Livestock rearing has a big potential for providing non- farm employment and income in rural areas. Discuss suggesting suitable measures to promote this sector in India. (2015)

    Practice MCQ:

    With reference to the National Animal Disease Control Programme, consider the following statements:

    1. It aims to control of Foot & Mouth Disease (FMD) and Brucellosis by vaccinating 100% cattle, buffalo, sheep, goat and pig population.
    2. For brucellosis it would vaccinate 100% bovine calves of all age.

    Which of the given statements is/are correct?

    1. Only 1
    2. Only 2
    3. Both 1 and 2
    4. Neither 1 nor 2

  • Free trade has two faces and the one offering harmony must prevail

    Why in the News?

    • Recently, the discussion acknowledged free trade’s nuanced and multifaceted nature, highlighting its potential benefits for peace and economic development while recognizing historical and contemporary challenges in promoting equitable outcomes.

    Evolution of Free Trade ideology:

    • 19th Century Political Reformers and Free Trade:  Free trade was the rallying cry of 19th-century political reformers (Particularly Adam Smith who was inspired by Thomas Hobbes), who saw it as a vehicle for defeating despotism, ending wars, and reducing crushing inequalities in wealth.
    • The era’s economic cosmopolitanism encapsulated progressive causes such as anti-militarism, anti-slavery, and anti-imperialism.
    • US Populists and Opposition to Tariffs: US populists in the late 19th century staunchly opposed the gold standard but were also against import tariffs, which they thought benefited big business and harmed ordinary people.
    • They pushed to replace tariffs with a more equitable progressive income tax.
    • Socialists’ View on Free Trade in the Early 20th Century: Then, during the early part of the 20th century, many socialists viewed free trade, supported by supranational regulation, as the antidote to militarism, wealth gaps and monopolies.
    • Liberal Reformers’ Perspective on Protectionism: The 19th-century liberals and reformers were free traders because they thought protectionism served retrograde interests, including landed aristocrats, business monopolies and warmongers.
    • They believed economic nationalism went hand in hand with imperialism and aggression.
    • Historian Marc-William Palen cites a 1919 essay by the economist Joseph Schumpeter, who depicted imperialism as a “monopolistic symptom of atavistic militarism and protectionism—an ailment that only democratic free-trade forces could cure.”

    Perception and misconceptions of Free trade:

    • Controversial Term-Free trade has been controversial in economics, with many people arguing that it contributes to rising inequality.
    • However, there is a grain of truth in the anti-trade stance, as growing trade did contribute to rising inequality and the erosion of the middle class in the US and other advanced economies in recent decades.
    • Blind Spot of Globalization – If free trade got a bad name,  globalisation’s boosters ignored its downsides or acted as if nothing could be done about them.
    • This blind spot empowered political leaders like Donald Trump to weaponize trade and demonize racial and ethnic minorities, immigrants, and economic rivals.
    • Diverse Opposition: Antipathy to trade is not limited to right-wing populists but also includes radical leftists, climate activists, food safety advocates, human-rights campaigners, labor unions, consumer advocates, and anti-corporate groups.
    • US President Joe Biden has distanced himself from free trade, believing that building a secure, green, equitable, and resilient US economy must take precedence over hyper-globalization.
    • Obstacle to Social Justice:  All progressives believe that free trade stands in the way of social justice.

    Instrumentalisation of Trade:

    1) Instrumentalized for Authoritarian end:

    • Under American Revolution: A particularly egregious example is Antebellum America, where free trade entrenched slavery.
    • During the drafting of the US Constitution in 1787, America’s slave-owning southerners ensured that the text would prohibit the taxation of exports. They understood that free trade would ensure that plantation agriculture remained profitable and safeguard the slavery system on which it was based.
    • When the North defeated the South in the US Civil War, slavery was abolished, and free trade was replaced with protectionism, which suited Northern business interests better.
    • Under British imperialism: After the repeal of the Corn Laws in 1846, the British government nominally abandoned protectionism and led Europe to sign free-trade agreements.

    2) Instrumentalized for militaristic ends:

    • In Africa, the Middle East, and Asia, free trade was imposed through the barrel of a gun whenever the British encountered weak potentates ruling over valuable commodities and markets.
    • The British fought the infamous Opium Wars of the mid-19th century to force Chinese rulers to open their markets to British and other Western goods so that Western countries, in turn, could buy China’s tea, silk, and porcelain without draining their gold.
    • The opium was grown in India; a British monopoly forced farmers to work under horrendous conditions that left long-term scars.
    • Free trade served repression and war, and vice versa.

    Post-World War II trade regime:

    • The American architects of the International Trade Organization followed in the footsteps of Cordell Hull—President Franklin D. Roosevelt’s secretary of state—believing they were pursuing world peace through free trade.
    • Hull was an economic cosmopolitan and a supporter of the 19th-century radical free-trade advocate Richard Cobden.
    • The post-war order was meant to be a system of global rules that eliminated bilateralism and imperial privileges.
    • While the US Congress ultimately failed to ratify the ITO, some of its key principles—including multilateralism and non-discrimination—survived in the General Agreement on Tariffs and Trade (GATT), the precursor to the World Trade Organization (WTO) of today.
    • Under GATT, commercial diplomacy replaced wars, and many non-Western countries—like Japan, South Korea, Taiwan and China—expanded their economies rapidly by leveraging global markets.

    What are the present challenges to the Trade regime?

    • Rise of Corporate Influence: Big corporations and multinational companies gained substantial power during this period, influencing trade negotiations to serve their interests.
    • Neglect of Important Issues: Environmental concerns, public health, human rights, economic security, and domestic equity were overlooked as trade negotiations prioritized corporate interests.
    • Departure from Original Vision: Trade deviated from the original vision of figures like Cobden and Hull, who likely envisioned it as a force for peace and prosperity, instead becoming a source of conflict.
    • Shift in Trade Dynamics: The dominance of corporate influence shifted the focus of international trade away from broader societal welfare towards maximizing profits and corporate interests

    Conclusion:

    The lesson of history is that turning trade into a positive force requires democratizing it. This means that trade should work for the benefit of the broader public interest, not just for a select few. This is an important lesson to remember as the reconstruction of the world trade regime would occur in the years ahead.

     

    Mains PYQ:

    Q. What are the key areas of reform if the WTO has to survive in the present context of the ‘Trade War’, especially keeping in mind the interest of India? (UPSC 2018)

  • The long, bumpy road from ‘drone didis’ to ‘lakhpati didis’

    Why in the news? 

    Efforts of fertilizer companies in supporting a Central government program aimed at training women to operate drones for spraying pesticides.

    Context-

    • This initiative represents a broader trend of encouraging women’s entrepreneurship in India and empowering them to participate in traditionally male-dominated sectors such as agriculture and technology.
    • The involvement of fertilizer companies in funding and facilitating this program underscores the importance of public-private partnerships in driving social and economic development initiatives. 

    Scheme Details-

    Under the Namo Drone Didi scheme, 15,000 women-led Self-Help Groups (SHGs) will receive agricultural drones to assist in crucial tasks such as crop monitoring, fertiliser spraying, and seed sowing.

    Costs to companies-

    • Financial Commitment by Fertilizer Companies: Fertilizer companies such as Indian Farmers Fertiliser Cooperative Limited (IFFCO) and Coromandel International Limited (CIL) are shouldering significant costs for the “drone didi” program.
    • IFFCO is investing ₹42 crore to support the training and equipment for 300 drone didis, while CIL is backing another 200.
    • Expense Breakdown: The approximate cost per woman participating in the program is ₹14 lakh. This covers expenses like the drone, four battery sets, a generator, and an electric autorickshaw for transportation.
    • IFFCO has categorized this expenditure as “benefits to farmers” in its financial records.
    • Contribution of Other Companies: Several additional fertilizer companies, including Krishak Bharati Cooperative (KRIBHCO), Indian Potash Limited (IPL), Matix, Indorama India Private Limited, Brahmaputra Valley Fertilizer Corporation Limited, and National Fertilizers Limited, are collectively providing an extra 500 drones.
    • Funding Arrangement: The Ministry of Agriculture and Farmers Welfare has agreed to provide financial assistance of up to ₹8 lakh for each set of equipment. The remaining ₹2 lakh is to be sourced by the participating Self-Help Groups (SHGs).

    Farmer trials-

    • Online Portal Enrollment: Haryana’s Agriculture Department, along with fertilizer companies, introduced online enrollment via the Meri Fasal Mera Byora portal to encourage farmers to apply for crop spraying through drones.
    • Subsidized Nano Urea Bottle: Farmers are offered a 1-litre nano urea bottle at ₹100, discounted from the market price of ₹225. This nano urea, when mixed with water, serves one acre.
    • Manual vs. Drone Spraying: Farmers weigh the costs of the manual application, which include subsidized granular urea and labor costs, against the higher charges of drone didis.
    • Viability for Small Landholders: Small landholders express concerns about the affordability and practicality of drone services due to limited financial resources and smaller land holdings.
    • Usefulness of Drones: Drones are seen as more cost-effective for larger plantations like coffee, tea, or sugarcane, rather than smaller-scale agricultural operations.
    • Financial Constraints: Farmers highlight financial constraints, including the inability to afford necessities like housing, education, and farm equipment, which diminishes the feasibility of investing in drone technology.

    The women’s challenges-

    • Fuel Costs:  significant daily expenses (₹500 to ₹600) on fuel to run the generator required to charge the battery sets for the drone, raising concerns about the economic feasibility of the job in the long run.
    • Battery Set Limitations: Each day, exhausts one charged battery set after covering three acres with the drone. This necessitates simultaneous charging of another set in her electric vehicle (EV) to continue her work, resulting in additional time and fuel costs.
    • Economic Viability: Despite the potential earnings mentioned on paper, there are doubts about the economic viability of the job due to high fuel costs, the need for additional assistance, and uncertainties regarding the longevity of the scheme’s benefits
    • Safety Concerns and Need for Assistance: There is safety concerns while operating the drone and the necessity of having an assistant to drive the electric autorickshaw and assist with unloading and handling the heavy drone equipment.
    • Lack of Provision for Helpers: There is no provision for hiring assistants or helpers in the scheme, leading to additional expenses

    Limitation of this scheme- 

    • Current Urea Usage and Subsidy: India uses 3.5 lakh metric tonnes (MT) of granular urea annually, with a significant portion subsidized by the government to make it affordable for farmers. Liquid nano urea, an alternative, is produced in limited quantities.
    • Government’s Vision for Nano Urea Production: The government aims to increase the production capacity of liquid nano urea to reduce dependence on expensive imported granular urea. The goal is to produce 48.5 crore bottles annually by 2026-27.
    • Limitations of Nano Urea: While liquid nano urea can supplement traditional granular urea, it cannot entirely replace it due to specific requirements in different stages of crop growth.
    • Ownership and Earnings Concerns: There are uncertainties regarding the ownership of drones and the distribution of earnings from drone operations among individuals, Self-Help Groups (SHGs), village organizations (VOs), or cluster-level federations (CLFs).
    • Need for Clarity and Coordination: Questions are raised about the lack of clarity on ownership, earnings distribution, and coordination among stakeholders involved in drone operations.
    • Challenges with Previous Proposals: Issues regarding the implementation of previous drone-related schemes, such as the procurement of drones under Krishi Vigyan Kendras (KVKs), and concerns about competition from individual farmers purchasing their drones are highlighted.

    To overcome the challenges outlined regarding drone operations and nano urea production, several measures can be considered:

    • Clarity in Ownership and Earnings Distribution: Establish clear guidelines and agreements on drone ownership and revenue sharing among individuals, SHGs, VOs, and CLFs. Ensure transparency in decision-making processes and consult all stakeholders involved.
    • Enhanced Coordination: Facilitate better coordination among government agencies, agricultural organizations, and drone operators to streamline operations, address concerns, and ensure effective implementation of schemes. Regular meetings, feedback mechanisms, and communication channels can aid in coordination efforts.
    • Capacity Building: Provide training and capacity-building programs for drone operators, farmers, and other stakeholders to enhance their skills in drone operation, maintenance, and data interpretation. This can improve the efficiency and effectiveness of drone-based agricultural activities.
    • Promotion of Nano Urea: Invest in research and development to improve the efficacy and availability of liquid nano urea. Conduct awareness campaigns to educate farmers about the benefits and proper usage of nano urea, emphasizing its role as a supplement to traditional fertilizers.
    • Policy Reforms: Review existing policies related to drone operations, urea subsidy, and agricultural initiatives to address loopholes and inconsistencies. Introduce new policies or amendments to support the expansion of nano urea production and drone technology adoption in agriculture.
    • Collaborative Partnerships: Foster partnerships between government agencies, private companies, research institutions, and farmer groups to leverage expertise, resources, and innovation in addressing challenges related to drone operations and urea production.
    • Monitoring and Evaluation: Implement robust monitoring and evaluation mechanisms to assess the impact of drone-based agricultural initiatives and nano urea production efforts. Collect data on key performance indicators and stakeholders’ feedback to identify areas for improvement and make informed decisions.

    Conclusion-

    The initiative to train women as “drone didis” for agricultural tasks faces challenges of economic viability, ownership clarity, and coordination. Solutions include clear guidelines, capacity building, policy reforms, and collaborative partnerships to ensure sustainable implementation and overcome limitations in nano urea production.

    Mains PYQ-

    Q- The Self Help Group (SHG) Bank Linkage Program (SBLP), which is India’s own innovation , has proved to be one of the most effective poverty alleviation and women empowerment programme. Elucidate.(UPSC IAS/2015)

  • Railways plans to develop multi-modal transport hubs

    Why in the news? 

    • The Indian Railways will create mega railway terminals with multi-modal connectivity in aspirational cities with a population of more than 10 lakh across the country.

    About the ‘Viksit Bharat’ Initiative – 

    • The program is part of the infrastructure being developed for Prime Minister Narendra Modi’s ‘Viksit Bharat’ initiative
    • Viksit Bharat 2047 is the vision to transform India into a developed nation by 2047, the 100th year of independence.
    • This vision encompasses various facets of development, such as economic growth, environmental sustainability, social progress, and good governance, to make India a developed nation by 2047.

    Key Provisions as per Railways Plans-

    • Inclusivity and Expansion: The initiative aims to be inclusive by considering inputs from stakeholders and has a vision for expansion beyond its initial parameters to cater to the needs of densely populated areas.
      • The Railway Ministry is actively working on improving the passenger experience in a mission mode, indicating a focused and accelerated effort in this regard.
      • Efforts are being made to improve the cleanliness of coaches and maintain proper amenities on railway premises to enhance the overall travel experience for passengers.
    • Zero Tolerance Policy: The Ministry has issued a warning that any laxity on the part of senior officers will not be tolerated, emphasizing the importance of accountability and responsibility in ensuring passenger satisfaction.
    • Quality check and Monitoring: Principal Chief Mechanical Engineers (PCMEs) of Zonal Railways have been instructed to closely monitor and ensure sustained housekeeping and maintenance activities, indicating a hands-on approach to implementing these improvements.

    Implementing the initiatives outlined could face several challenges:

    • Resource Constraints: Adequate funding, manpower, and infrastructure might be lacking, especially for initiatives that require significant investment in upgrading facilities and maintaining cleanliness.
    • Resistance to Change: Resistance from existing systems, bureaucracy, and resistance to change among stakeholders could impede the implementation of new initiatives.
    • Coordination Issues: Effective coordination among various departments and agencies involved in railway operations may be challenging, leading to delays or inefficiencies in implementation.
    • Technical Challenges: Addressing technical issues related to rolling stock maintenance, cleanliness, and passenger amenities may require specialized expertise and resources.
    • Operational challenges: The vast scale of railway operations across the country presents logistical challenges in ensuring uniform implementation of initiatives and maintaining standards consistently.
    • Training and Capacity Building: Providing adequate training and capacity building for staff involved in implementing and maintaining the initiatives may be necessary but could also be challenging to execute effectively.

    To address the challenges mentioned, several measures can be taken:

    • Resource Mobilization: Explore alternative sources of funding such as public-private partnerships (PPPs), seek investment from international organizations, and allocate budgetary resources efficiently.
    • Capacity Building: Invest in training programs, workshops, and skill development initiatives to enhance the capabilities of staff involved in implementing and maintaining the initiatives.
    • Technology Adoption: Embrace technological solutions such as automated maintenance systems, real-time monitoring tools, and digital platforms to improve efficiency, accuracy, and transparency in operations.
    • Stakeholder Engagement and Communication: Conduct extensive stakeholder consultations to garner support for initiatives, communicate the benefits clearly, and create awareness about the need for change.
      • Simplify bureaucratic procedures, delegate decision-making authority where appropriate, and establish clear accountability mechanisms to facilitate faster implementation.

    Conclusion

    • Indian Railways’ mega terminals aim to transform connectivity in aspirational cities. Challenges like resource constraints and resistance necessitate measures like stakeholder engagement, technology adoption, and streamlined processes for successful implementation.

  • India ranks 134th in global human development index, says UNDP report

    Why in the news? 

    Recently, India’s progress in the global Human Development Index (HDI), as reported by the United Nations Development Programme (UNDP)

    Context-

    • India’s ranking on the United Nations Human Development Index (HDI) improved by one position in 2022 to 134 out of 193 countries compared to 135 out of 191 countries in 2021. Switzerland has been ranked number one.

    The Human Development Index (HDI)-

    About 

    The Human Development Index (HDI), initially introduced by the UNDP in 1990, is a statistical composite index. It measures a country’s average achievement across three fundamental dimensions:

    • Health: This dimension is represented by life expectancy at birth. It reflects the overall health and well-being of the population and their access to healthcare services.
    • Education: This dimension includes indicators such as expected years of schooling for children entering school and mean years of schooling for adults. It assesses the level of educational attainment and the availability of educational opportunities within a country.
    • Standard of Living: This dimension is measured by Gross National Income (GNI) per capita, adjusted for purchasing power parity (PPP). It reflects the economic prosperity and living standards of the population, including income levels and access to basic necessities.

    Background

    • The Human Development Index (HDI) was developed by Pakistani economist Mahbub ul Haq and Indian economist Amartya Sen. It is used by the United Nations Development Programme (UNDP) to assess a country’s development as part of the Human Development Report.
    • Alongside the Human Development Index (HDI), the United Nations Development Programme (UNDP) also presents the Human Development Report (HDR) which present-
    1. Multidimensional Poverty Index (MPI),
    2. Inequality-adjusted Human Development Index (IHDI),
    3. Gender Inequality Index(GII) since 2010 and
    4. Gender Development Index (GDI) since 2014

    Key Points as per Report- 

    • India’s Rank on the HDI: India moved up one rank on the Human Development Index (HDI) from 135 in 2021 to 134 in 2022, with slight improvements in life expectancy and Gross National Income (GNI) per capita.
    • Comparison with Neighbors: India ranks below its southern neighbour Sri Lanka (ranked 78) and China (ranked 75) in the High Human Development category, and below Bhutan (ranked 125) and Bangladesh (ranked 129) in the Medium Human Development category.
    • Reducing inequalities: The report highlights a reverse trend in reducing inequalities between wealthy and poor nations. Despite interconnected global societies, collective action on climate change, digitalization, poverty, and inequality is lacking, leading to a widening human development gap.
    • Challenges in Democracy: While nine in 10 people worldwide endorse democracy, over half express support for leaders who may undermine it. Political polarization and limited control over government decisions are prevalent, leading to protectionist or inward-turning policy approaches.

    Action Plans as per report-

    • Multilateral Cooperation: Strengthen international cooperation and collaboration among governments, NGOs, businesses, and other stakeholders to address global challenges collectively. This could involve fostering dialogue, partnerships, and agreements that promote shared goals and responsibilities.
    • Policy Coordination: Enhance coordination and coherence in policymaking at national and international levels to ensure that policies address interconnected challenges comprehensively. This may involve integrating diverse perspectives, aligning strategies across sectors, and leveraging resources efficiently.
    • Investment in Sustainable Development: Increase investments in sustainable development initiatives that prioritize environmental conservation, social equity, and economic prosperity. This could include funding for renewable energy, education, healthcare, infrastructure, and poverty alleviation programs.
    • Empowering Communities: Empower local communities and grassroots organizations to participate in decision-making processes and contribute to problem-solving efforts. This could involve providing resources, capacity-building support, and platforms for civic engagement.
    • Promotion of Dialogue and Understanding: Foster dialogue, empathy, and mutual understanding among diverse communities to mitigate polarization and build social cohesion. This could involve promoting education, cultural exchange programs, media literacy, and initiatives that promote tolerance and respect for human rights.
    • Transparency and Accountability: Enhance transparency, accountability, and integrity in governance structures and institutions to rebuild trust and confidence among citizens. This could involve strengthening anti-corruption measures, promoting open government initiatives, and ensuring inclusive and participatory decision-making processes.
    • Investment in Education and Awareness: Invest in education, public awareness campaigns, and media literacy programs to increase awareness of global challenges, their interconnections, and the importance of collective action. This could help foster a sense of shared responsibility and mobilize public support for collaborative solutions.
    • Promotion of Inclusive Economic Growth: Promote inclusive economic growth that benefits all segments of society, reduces inequality, and creates opportunities for marginalized populations. This could involve implementing policies that support job creation, entrepreneurship, social protection, and access to essential services.
    • Resilience Building: Build resilience to global challenges such as climate change, pandemics, and economic crises by investing in preparedness, adaptation, and mitigation strategies. This could involve strengthening healthcare systems, disaster risk reduction measures, and social safety nets.
    • Advocacy and Leadership: Advocate for political leadership and commitment at all levels to prioritize collective action and address shared challenges effectively. This could involve mobilizing political will, engaging with policymakers, and holding leaders accountable for their actions.

    Conclusion-

    Strengthening multilateral cooperation, policy coordination, sustainable development investment, empowering communities, promoting dialogue, transparency, education, inclusive economic growth, resilience building, and advocating for leadership are vital for addressing global challenges collectively and fostering a sustainable future.

    Mains PYQ-

     Q- Despite the consistent experience of high growth, India still goes with the lowest indicators of human development. Examine the issues that make balanced and inclusive development elusive.(UPSC IAS/2019)

  • Food factor: On the latest retail inflation data

    Why in the news? 

    • India’s retail inflation remained virtually unchanged at 5.09% in February, even as food prices paid by consumers resurged from 8.3% in January to 8.66% in February.

    Context-

    • Most economists expect inflation to stay in the 5.1%-5.2% range in March as well, which would lift average inflation in the last quarter of this year over the 5% average projected by the RBI

    The primary reason behind the food inflation in February-

    • Vegetable Prices Surge: Vegetables experienced a significant price surge, with a seven-month high pace of 30.25% in February. This spike in vegetable prices contributed significantly to the overall food inflation.
    • Rise in Egg and Meat Prices: Prices of eggs and meat/fish also rose at a faster pace in February compared to January. Eggs witnessed a notable increase from 5.6% to 10.7%, while meat and fish prices rose from 1.2% to 5.2%.
    • Deceleration in Pulses and Spices Prices: While there was a slight deceleration in the inflation rate of pulses and spices compared to the previous year, these items still experienced steep price increases. Pulses inflation stood at 18.5%, and spices recorded a 13.5% increase.
    • Regional Disparities: Food inflation varied across different states, with some states experiencing inflation rates above the RBI’s upper tolerance threshold of 6%. States like Odisha, Telangana, Haryana, and Assam recorded high inflation rates, while others like Delhi, Madhya Pradesh, Uttarakhand, and West Bengal had relatively lower inflation rates.
    • Seasonal Factors and Supply Chain Issues: Seasonal factors, along with supply chain disruptions, could have contributed to the rise in food prices. Factors such as adverse weather conditions, transportation constraints, and supply-demand imbalances may have affected the availability and prices of food items in the market.

    To address inflation-related issues in the short term and long term, several measures can be considered:

    [A] Short-Term Measures:

    Supply-Side Interventions:

    • Increase the supply of essential commodities by releasing buffer stocks, if available.
    • Facilitate faster transportation of perishable goods through streamlined logistics and distribution channels.
    • Establish temporary market outlets to directly connect farmers with consumers, reducing intermediary costs and price hikes.

    Import Policies:

    • Relax import restrictions on essential food items to augment domestic supply and stabilize prices.
    • Expedite customs clearance procedures to ensure timely availability of imported goods in the market.

    Price Monitoring and Control:

    • Implement strict price monitoring mechanisms to prevent hoarding and profiteering.
    • Set up special task forces or committees to monitor price movements and take swift action against price manipulation.

    Demand Management:

    • Promote alternative dietary choices to alleviate pressure on high-priced items.
    • Encourage conservation and rational utilization of essential commodities through public awareness campaigns.

    [B] Long-Term Measures:

    Investment in Agriculture Infrastructure:

    • Enhance investment in agricultural infrastructure, including irrigation systems, cold storage facilities, and transportation networks, to improve productivity and reduce post-harvest losses.

    Crop Diversification and Technology Adoption:

    • Encourage farmers to diversify their crops to mitigate the impact of price volatility.
    • Promote the adoption of modern agricultural practices, including mechanization, precision farming, and biotechnology, to enhance crop yields and resilience to climate change.

    Market Reforms:

    • Implement market reforms to create a more efficient and transparent agricultural marketing system.
    • Facilitate the establishment of Farmer Producer Organizations (FPOs) and agricultural cooperatives to empower farmers and strengthen their bargaining power in the market.

    Food Processing and Value Addition:

    • Promote investment in food processing industries to add value to agricultural produce and reduce post-harvest losses.
    • Establish food processing clusters and agro-industrial parks to encourage entrepreneurship and create employment opportunities in rural areas.

    Risk Management and Insurance:

    • Introduce crop insurance schemes and risk management tools to protect farmers from income volatility caused by price fluctuations and natural disasters.
    • Provide training and technical assistance to farmers to improve their risk assessment and management capabilities.

    Sustainable Agriculture Practices:

    • Encourage the adoption of sustainable agriculture practices, including organic farming, agroforestry, and soil conservation, to ensure long-term environmental sustainability and food security.

    Conclusion-

    To mitigate food inflation, short-term measures such as supply-side interventions and price monitoring are essential, while long-term solutions like investment in agriculture infrastructure and market reforms are crucial for sustainable food security.

  • Mission Palm Oil: Achieving Self-sufficiency in Edible Oil Production

    Why in the news-

    • The Prime Minister highlighted the National Mission on Edible Oils – Oil Palm (NMEO-OP) during his visit to Arunachal Pradesh, inaugurating the first oil mill under this mission.

    Why discuss this?

    • This results in a substantial outflow of $20.56 billion in foreign exchange, the need for self-reliance in edible oil production has become paramount.

    Edible Oil Consumption in India: Key Facts

    • India, the world’s biggest importer of vegetable oils, is likely to buy 15.6 million metric tons of cooking oils in the 2023-24 oil year, down from 16.6 million in the current year to Oct.
    • With India imports 57% of its vegetable oil demand.
    • These imports have shown a declining trend in recent months.
    • This decline is attributed to various factors such as reduced availability of palm oil for edible oil requirements due to producers diverting it for biodiesel production.
    • Additionally, the import of soyabean oil from Argentina increased sharply in February 2024, while imports from Brazil declined.
    • The top three vegetable oil imports – palm, soybean, and sunflower seed oil.
    • India’s vegetable oil sector accounts for 13% of the Gross Cropped Area, 3% of the Gross National Product, and 10% of the value of all agricultural commodities.
    • A substantial portion of India’s edible oil requirement is fulfilled through palm oil imports from Indonesia and Malaysia.

    Mission Palm Oil: A Catalyst for Self-Reliance

    • It is a Centrally Sponsored Scheme launched in 2021 targeting a substantial increase in oil palm cultivation and crude palm oil production.
    • It has been introduced with a particular emphasis on the Northeast region and the Andaman and Nicobar Islands.

    Objectives:

    1. Expand oil palm acreage by an additional 6.5 lakh hectares by 2025-26
    2. Increase crude palm oil production to 11.2 lakh tonnes by 2025-26, reaching up to 28 lakh tonnes by 2029-30.
    3. Increase consumer awareness to maintain a consumption level of 19.00 kg/person/annum till 2025-26.

    Focus Areas

    (1)  Fixing of Viability Price

    • Oil palm farmers currently produce Fresh Fruit Bunches (FFBs), from which the industry extracts oil.
    • Presently, FFB prices fluctuate with international Crude Palm Oil (CPO) prices.
    • The Government of India will now assure price stability for FFBs, known as Viability Price (VP), shielding farmers from international CPO price fluctuations.
    • A Formula Price (FP), set at 14.3% of CPO and adjusted monthly, will be established. Viability gap funding will be the difference between VP and FP, directly disbursed to farmers’ accounts via Direct Benefit Transfer (DBT) when necessary.

    (2) Input Assistance

    • The scheme’s second major focus is to significantly enhance input assistance/interventions, including:
      1. Increasing assistance for oil palm planting material from Rs. 12,000 to Rs. 29,000 per hectare.
      2. Boosting support for maintenance and intercropping interventions.
      3. Providing special assistance of Rs. 250 per plant for replanting old gardens to rejuvenate them.
      4. Offering special assistance tailored for the North-East and Andaman regions, including provisions for half-moon terrace cultivation, bio-fencing, land clearance, and integrated farming.

    Try this PYQ from CSE Prelims 2019:

    Among the following, which one is the largest exporter of rice in the world in the last five years?

    (a) China

    (b) India

    (c) Myanmar

    (d) Vietnam

     

    Practice MCQ:

    Consider the following statements:

    1. India is the world’s biggest importer of vegetable oils.
    2. The top three vegetable oil imports include – soybean, palm and groundnut oil.

    Which of the given statements is/are correct?

    (a) Only 1

    (b) Only 2

    (c) Both 1 and 2

    (d) Neither 1 nor 2

     

  • [pib] E- Vehicle Policy to promote India as a Manufacturing Destination for EVs

    Why in the news-

    • The Union Government has approved a scheme aimed at promoting India as a manufacturing destination for e-vehicles (EVs) with the latest technology.
    • The policy aims to attract investments from reputed global EV manufacturers to bolster the EV ecosystem in the country.

    About E- Vehicle Manufacturing Policy

    • Access to Latest Technology: Indian consumers will gain access to the latest technology in EVs, aligning with the Make in India initiative.
    • Strengthening the EV Ecosystem: The policy aims to strengthen the EV ecosystem by fostering healthy competition among EV players, leading to high-volume production and economies of scale.
    • Reducing Import Dependency: By promoting domestic production, the policy aims to reduce imports of crude oil, lower the trade deficit, and curb air pollution, particularly in cities.
    • Key provisions of the Policy include:
    1. Minimum Investment Requirement: A minimum investment of Rs 4150 crore (∼USD 500 million) is required to qualify for the scheme.
    2. Timeline for Manufacturing: Manufacturers must set up manufacturing facilities in India within 3 years, start commercial production of e-vehicles, and achieve 50% domestic value addition (DVA) within 5 years.
    3. Domestic Value Addition (DVA): Localization levels of 25% by the 3rd year and 50% by the 5th year must be achieved during manufacturing.
    4. Customs Duty Incentives: A customs duty of 15% applies to vehicles with a minimum CIF value of USD 35,000 and above, subject to certain conditions.

    Additional Provisions and Requirements

    • Limit on Duty Forgone: The duty foregone on imported EVs is limited to the investment made or ₹6484 crore, whichever is lower.
    • Annual Import Limits: A maximum of 40,000 EVs can be imported annually, subject to investment thresholds.
    • Bank Guarantee Requirement: Investment commitments must be backed by a bank guarantee, which will be invoked in case of non-achievement of DVA and minimum investment criteria.
    • Bank Guarantee Invocation: The bank guarantee will be invoked if companies fail to meet the DVA and minimum investment criteria outlined in the scheme guidelines. 

    Various Policy Moves for Promoting E-Vehicles

    • FAME scheme II (2019): Offers incentives such as subsidies, tax rebates, and preferential financing for EV manufacturers and buyers.
    • National Electric Mobility Mission Plan (2013): Aims to achieve annual sales targets of 6-7 million hybrid and electric vehicles by 2020 through fiscal incentives.
    • Amendments to the Model Building Bye-laws (2016): It requires 20% of parking spaces in residential and commercial buildings to be allocated for EV charging facilities.
    • National Mission on Transformative Mobility and Battery Storage (2019): Aims to create an ecosystem for EV adoption and support the establishment of large-scale battery manufacturing plants.
    • Production Linked Incentive (PLI) scheme (2021): It incentivises EV and component manufacturing.
    • Vehicle Scrappage Policy (2021): It incentivizes the scrapping of old vehicles and the purchase of new EVs.
    • Ministry of Power’s guidelines: It mandates charging stations every 3 km along grids and every 25 km on highways.

    Try this PYQ from CSE Mains 2019:

    Q. How is efficient and affordable urban mass transport key to the rapid economic development in India?

  • [pib] Integration of Kisan Credit Card (KCC) Fisheries Scheme and JanSamarth Portal

    Why in the news-

    • The Department of Fisheries inaugurated the integration of the Kisan Credit Card (KCC) Fisheries scheme onto the JanSamarth Portal, marking a revolutionary step in providing credit facilities to fishers and fish farmers nationwide.

    JanSamarth Portal

    • It is a first-of-its-kind online platform for directly connecting lenders with beneficiaries. Citizens can avail loans under 13 Central government schemes under 4 loan categories.
    • The one-stop portal allows citizens to check eligibility, apply online and get digital approval.

    About KCC Fisheries Scheme

    • The GoI, in the year 2018-19, extended KCC facility to fisheries and animal husbandry farmers to help them to meet their working capital requirements.
    • Bank authorities have been instructed to issue KCC within 14 days of receipt of the completed application from the fish farmers.
    • Benefits Include:
    1. For the existing KCC holders the benefits of interest subvention and prompt repayment incentive will be admissible up to the credit limit of Rs. 3 lakhs including fisheries activities.
    2. In the case of new card holders, the credit limit is Rs. 2 lakhs to meet their working capital requirements for fisheries activities.
    3. In the KCC scheme @7% is the lending rate to farmers including @2% interest subvention per annum by GoI. Also, another @3% per annum is provided in case of prompt repayment as an additional incentive as per the existing guidelines.
    4. This implies that the farmers repaying promptly as above would get a loan @ 4% per annum effectively for loan amount upto Rs 2 lakhs.

    Kisan Credit Cards (KCC) Scheme

    • The KCC scheme was introduced on the recommendation of R.V. Gupta of the National Bank for Agriculture and Rural Development.
    • The scheme was launched in 1998 to provide adequate and timely credit support from the banking system to the farmers.
    • It provides a single window with flexible and simplified procedures to the farmers for their cultivation and other needs like purchasing agriculture inputs such as seeds, fertilizers, pesticides etc. and drawing cash for their production needs.
    • The scheme was further extended for the investment credit requirement of farmers viz. allied and non-farm activities in the year 2004.
    • In 2018-19, it was extended to fisheries and animal husbandry farmers.

    Objectives include:

    1. To meet the short-term credit requirement for cultivation
    2. To manage post-harvest expenses
    3. To meet the consumption requirement of farmer’s household
    4. Working capital for maintaining the farm assets and activities allied to agriculture
    5. Investment credit requirement for agriculture-allied activities

    KCC scheme is implemented by:

    1. Commercial banks
    2. Regional Rural Banks (RRBs)
    3. Small Financial Banks, and
    4. Cooperative banks

    Try this PYQ from CSE Prelims 2020:

    Under the Kisan Credit Card scheme, short-term credit support is given to farmers for which of the following purposes?

    1. Working capital for maintenance of farm assets
    2. Purchase of combine harvesters, tractors and mini trucks
    3. Consumption requirements of farm households
    4. Post-harvest expenses
    5. Construction of family house and setting up of village cold storage facility

    Select the correct answer:

    (a) 1, 2 and 5 only

    (b) 1, 3 and 4 only

    (c) 2, 3, 4 and 5 only

    (d) 1, 2, 4 and 5

     

    Practice MCQ:

    The JanSamarth Portal often seen in the news is related to:

    (a) Lending Facility

    (b) E-KYC

    (c) Consumer Grievances

    (d) Right to Information

     

  • Has poverty really dropped to 5% in India?

    Why in the news? 

    • NITI Aayog’s B.V.R. Subrahmanyam stated that less than 5% of Indians live below the poverty line based on HCES(Household Consumption Expenditure Survey) 2022-23 findings.

    Context:

    • According to the World Bank, in India, 21.9% of the population lives below the national poverty line in 2011.
    • In 2018, almost 8% of the world’s workers and their families lived on less than US$1.90 per person per day (international poverty line).
    • About HCES (Household Consumption Expenditure Survey): The HCES is usually conducted by the National Statistical Office (NSO) every 5 years. It is designed to collect information on the consumption of goods and services by households

    What does the  HCES Survey say?

    • The survey indicates 2.5 times increase in consumption expenditure since 2011-12, but critics question income rise parity on basis of the following conditions:
      • Nominal vs. Real Terms: Consumption has increased about 40% per capita in real terms over the past 11 years, despite nominal terms showing a 2.5 times increase.
      • Wage Growth: Data from the Periodic Labour Force Survey (PLFS) reveals a 3.2% annual increase in wages for agricultural workers since 2011, indicating real wage growth.
      • Tax Data: Tax records demonstrate robust growth in the wages of salaried workers since 2011, further supporting the claim of increased incomes lead to higher consumption.

     

    How the Poverty line is defined in India? Does the poverty line need to be raised?

    • The poverty line in India: Historically based on the Tendulkar Committee observation, the poverty line, currently approximates ₹1,500 in rural and ₹1,800 in urban areas. However, it lacks a clear conceptual basis, diverging from traditional calorie-based metrics. Additionally, there’s no officially declared poverty line presently.
    • Poverty Line Calculation: NITI Aayog’s task force calculates the poverty line in India using data from the National Sample Survey Office, which is part of the Ministry of Statistics and Programme Implementation.
    • Need for raising the Poverty line: In 2011-12, India’s poverty rate was 12.5%, but it has decreased to 5% by 2022-23. Using the Tendulkar poverty line, poverty levels are around 2%, indicating the need to increase the poverty line. Extreme poverty has been reduced, but raising the poverty line is necessary, as indicated by different calculations.

    What is the Criticism faced along the lines of income rise parity?

    • Real Wage Growth: Contrary to claims of wage growth, numerous studies indicate that real wages have grown by less than 1% annually since 2017, and have even declined for construction workers.
    • Employment Data: The celebrated increase in employment shown in the latest PLFS survey for 2022-23 is misleading, as it primarily stems from a rise in unpaid family helpers rather than genuine job creation.
    • Unpaid Workers: The prevalence of unpaid family helpers, particularly among women, has increased significantly, with 37.5% of women workers now being unpaid, up from 32% in previous years.
    • Paid Employment Rates: When considering only paid employment (those receiving compensation for work), the rates are notably low, with only 48% for men and 13% for women, indicating a lack of genuine employment opportunities and wage growth for most working families.
    • Stagnant Demand for Mass Consumption Goods: Despite overall consumption growth, demand for mass-consumption goods and fast-moving consumer goods (FMCGs) remains stagnant, suggesting limited improvement in the purchasing power of the majority of the population.
    • Two-Wheeler Sales: Sales of two-wheelers, a key indicator of consumer demand, have not recovered to pre-demonetization levels (pre-November 2016), indicating persistent challenges in the broader economy affecting consumer spending habits.

    The Other side of the coin- 

    • Concerns with Private Sector Data: There is skepticism regarding the quality of data provided by private sector entities like CMIE, particularly regarding indicators such as female labor force participation rates.
    • Female Labor Force Participation Rate: CMIE data suggests a significantly low female labor force participation rate in India, with only 9% of women reportedly working, raising questions about the accuracy and reliability of these statistics.
    • Comparison with Other Countries: The data implies that India’s female labor force participation rate is lower than that of countries like Yemen and Iraq, highlighting the severity of the issue and prompting concerns about the credibility of the data.

    Way Forward: Measures to improve the data and poverty line – 

    • Revising Poverty Line Definition: Develop a clear conceptual basis for defining the poverty line, moving away from historical metrics like the Tendulkar poverty line towards more comprehensive and inclusive criteria, such as calorie-based metrics or multidimensional poverty indicators.
    • Official Declaration of Poverty Line: Establish an officially declared poverty line, supported by rigorous research and consultation with experts, to provide clarity and consistency in poverty estimation efforts.
    • Enhanced Monitoring and Evaluation: Strengthen monitoring and evaluation mechanisms to regularly review and update the poverty line based on evolving socio-economic conditions, ensuring its relevance and accuracy over time.

    Conclusion:

    The poverty line in India, historically based on the Tendulkar poverty line, needs revision due to its lack of conceptual basis and the absence of an official declaration. Despite reductions in extreme poverty, concerns persist over stagnant wage growth, misleading employment data, and the need for improved poverty measurement methodologies.