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Subject: Economics

  • Tourism Potential In Border States

    Central Idea

    • India has tremendous tourism potential in its border states, which remains largely untapped due to the remoteness of locations and difficulty of access. The government has made unprecedented efforts to build border infrastructure and announced plans to open villages along the northern border for tourists under the Vibrant Villages Programme. However, encouraging tourism in these areas requires promoting hubs of civilian presence, building necessary infrastructure, and conducting feasibility studies to ensure sustainable development.

    What is Vibrant Villages Programme?

    • Improve infrastructure in villages along India’s border with China: The Vibrant Villages program is a government initiative aimed at improving infrastructure and creating job opportunities in villages situated along the Line of Actual Control (LAC) with China.
    • Overview: The program involves a significant allocation of funds, i.e., Rs 4,800 crore, to upgrade 633 villages situated in five states, Himachal Pradesh, Uttarakhand, Sikkim, Arunachal Pradesh, and the Union Territory of Ladakh. Under the programme, residential and tourist centres will be constructed.
    • Objectives of the program: The program aims to enhance the living conditions of the people residing in the border areas and improve the security situation along the LAC with China.
    • Expected Benefits: The Vibrant Villages program aims to provide better facilities like schools, 24×7 electricity, and more 4G telecommunication towers in the border areas to match what is available in settlements across the LAC.
    • Strategy to enhance security: The Vibrant Villages program is part of the broader Indian government strategy to enhance security along the border with China. The investment in developing infrastructure and creating job opportunities is a crucial step towards improving the living conditions of the people in the border areas and enhancing the security situation along the LAC with China.
    • Program is modelled after Chinese actions on LAC: The program is modelled after the Chinese military and civilian authorities’ actions on their side of the LAC to build permanent population settlements along the border.

    Tourism potential in Border areas

    1. Karakoram:
    • Regular motorcycle expeditions should be organised for civilians in cooperation with India’s major motorcycle manufacturers. Areas such as the Saser Kangri massif could be explored for mountaineering expeditions by small experienced teams in tandem with the armed forces and the Indian Mountaineering Federation.
    1. Areas around Pangong Lake:
    • The area around Pangong Lake and Chushul is a delight for photographers and birdwatchers. In the Changthang wildlife sanctuary, there are wetlands and a thriving population of the Kiang, a wild ass.
    • Lhari Peak is sacred to both Hindus and Buddhists.
    • The Demchok area is home to several hot springs that are popular for naturopathy cures.
    • The nearby villages of Tsaga, Koyul and Hanle can also be further developed.
    • Tourism can be promoted in the Tso Moriri lake area, with a particular focus on home stays.
    1. Mana Pass and Niti Valley in Uttarakhand:
    • It is one of the world’s highest vehicle-accessible passes.
    • The village of Mana is rich in mythology, believed to be the gateway to heaven, and is situated near popular destinations like Hemkund and the Valley of Flowers and the revered Badrinath shrine is located nearby.
    • Tourists can enjoy sailing on the Deo Tal Lake near Mana, while skiing enthusiasts can make use of the nearby slopes. Mount Kamet and other peaks in the Nilang-Jadang valley are also ideal for mountaineering expeditions.
    1. Tourism Potential in Sikkim:
    • In Sikkim, the region around Doka La is ripe for tourism.
    • Pedong, Nathang Valley, Zuluk, Kupup, Baba Harbhajan Mandir and the Yak Gold Course, the highest golf course in the world, are nearby.
    • Conducted tours, including trekking expeditions up to Batang La, could be a start.
    1. Bum La Pass in Arunachal Pradesh
    • In the eastern sector, the Bum La Pass in Arunachal Pradesh is already a well-established tourism hub.
    • There is scope to bring in more tourists all the way up to Zero Point, the site of border personnel meetings with China.
    • Publicity should be given to the memorial built there in honour of Subedar (Baba) Joginder Singh, who was posthumously awarded the Param Vir Chakra for outstanding bravery in the battle near Tongpen La during the India-China war in 1962.
    • Nearby, the Pangateng and Sangetsar lakes are picturesque.
    • Expeditions on the lines of NIMAS’s Winter Bailey Trekking Expedition could attract international tourists to Tawang and the interiors of the State

    What measures should be taken to promote commercial activity in India’s remote border areas?

    1. Transition from Military to Tourism in Remote Areas:
    • Encourage Commercial Activity:
    • Prioritize Tourism
    • Build Infrastructure for Tourism
    1. Developing Border Areas for Sustainable Growth:
    • Establish Civilian Hubs and Home Stays
    • Allocate Border Area Development Programme Funds
    • Install Vital Infrastructure and Sustainable Energy Sources

    Conclusion

    • While developing border areas for security is crucial, conducting feasibility studies before implementing tourism projects is equally important to ensure sustainability. Unplanned construction violates norms and harms the Himalayan belt, so promoting sustainable infrastructure that benefits the local economy is necessary.

    Mains Question

    Q. India’s Border Areas have Tremendous Tourism Potential, but it remains largely untapped due to remoteness and accessibility. What measures should be taken to promote commercial activity in India’s remote border areas?

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  • Money Laundering laws will now cover Cryptocurrency Trade

    crypto

    The government has imposed the Prevention of Money-laundering Act, 2002 on cryptocurrencies or virtual assets as it looks to tighten oversight of digital assets.

    Central idea: The Prevention of Money-laundering Act, 2002, now covers various financial activities related to virtual digital assets, including exchanges between fiat currencies and digital assets, transfer and storage of digital assets, and provision of financial services related to the sale of digital assets by an issuer.

    What are Cryptocurrencies?

    • Cryptocurrencies are digital or virtual currencies that use encryption techniques to secure and verify transactions and control the creation of new units.
    • They operate independently of central banks and financial institutions and use a decentralized ledger technology called blockchain to record transactions.
    • They can be used to make purchases, transfer funds, or as a store of value, and some are designed to facilitate specific use cases, such as smart contracts.
    • Bitcoin is the first and most well-known cryptocurrency, but there are thousands of others, including Ethereum, Ripple, and Litecoin.
    • Cryptocurrencies can be purchased on cryptocurrency exchanges or obtained through mining, a process in which computers solve complex mathematical problems to validate transactions and earn new cryptocurrency units as a reward.

    Why regulate cryptocurrencies?

    • Consumer protection: Cryptocurrencies are highly volatile and can be subject to fraud, scams, and other forms of financial crime.
    • Preventing money laundering and terrorist financing: Cryptocurrencies can be used to anonymously transfer funds, making them potentially attractive to criminals and terrorists.
    • Systemic risk: Cryptocurrencies are not currently part of the traditional financial system, but they could potentially have an impact on it if they were to become more widely adopted.
    • Taxation: Cryptocurrencies can be used to evade taxes or hide assets. Regulation can help ensure that cryptocurrency transactions are properly taxed and that tax evasion is prevented.
    • Market stability: being highly volatile, regulation can help promote market stability and prevent excessive speculation or manipulation of cryptocurrency markets.

    What is the recent move?

    • Indian crypto exchanges will have to report suspicious activity to the Financial Intelligence Unit India (FIU-IND).
    • The move is in line with the global trend of requiring digital-asset platforms to follow anti-money laundering standards similar to those followed by other regulated entities like banks or stock brokers.

    Recent regulatory moves

    • In the Budget for 2022-23, finance ministry had brought a 30% tax on income from transactions in such assets.
    • Also, to bring such assets under the tax net, it introduced a 1% TDS (tax deducted at source) on transactions in such asset classes above a certain threshold.
    • Gifts in crypto and digital assets were also taxed.

    Back2Basics: Prevention of Money Laundering Act (PMLA)

    • PMLA, 2002 is an Act of the Parliament of India enacted by the NDA government to prevent money laundering and to provide for confiscation of property derived from money laundering.
    • It was enacted in response to India’s global commitment (including the Vienna Convention) to combat the menace of money laundering.
    • PMLA and the Rules notified there under came into force with effect from July 1, 2005.
    • The act was amended in the year 2005, 2009 and 2012.

     

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  • ONDC will help small retail survive against large E-Com firms: Union Minister

    ondc

    Central idea: The article discusses the Indian government’s plan to launch the Open Network for Digital Commerce (ONDC) to support small retailers and businesses against large tech-based e-commerce firms.

    About ONDC

    • The ONDC is a private non-profit Section 8 company established by the Department for Promotion of Industry and Internal Trade (DPIIT) of the Government of India.
    • It aims to develop open e-commerce by creating a set of specifications designed to foster open interchange and connections between shoppers, technology platforms, and retailers.
    • It was incorporated on December 31, 2021, with an initial investment from Quality Council of India and Protean eGov Technologies Limited (formerly NSDL e-Governance Infrastructure Limited).

    What exactly is ONDC?

    • The ONDC is not an application, an intermediary, or software but a set of specifications.
    • The ONDC seeks to provide an open-source platform for digital commerce that will enable small retailers and businesses to compete with large e-commerce firms by providing them with access to a wider customer base and reducing the costs of doing business.

    What does one mean by ‘Open-sourcing’?

    • Free for all: An open-source project means that anybody is free to use, study, modify and distribute the project for any purpose.
    • Open licensing: These permissions are enforced through an open-source licence easing adoption and facilitating collaboration.

    What processes are expecting to be open-sourced with this project?

    • Several operational aspects including onboarding of sellers, vendor discovery, price discovery and product cataloguing could be made open source on the lines of Unified Payments Interface (UPI).
    • If mandated, this could be problematic for larger e-commerce companies, which have proprietary processes and technology deployed for these segments of operations.

    What does the DPIIT intend from the project?

    • ONDC is expected to-
    1. Digitize the entire value chain,
    2. Standardize operations,
    3. Promote inclusion of suppliers,
    4. Derive efficiencies in logistics and
    5. Enhance value for stakeholders and consumers

    Countering ‘Digital Monopoly’

    • Digital monopolies refer to a scenario wherein e-commerce giants or Big Tech companies tend to dominate and flout competition law pertaining to monopoly.
    • The Giants have built their own proprietary platforms for operations.
    • In March, India moved to shake up digital monopolies in the country’s $ 1+ trillion retail market by making public a draft of a code of conduct — Draft Ecommerce Policy, reported Bloomberg.
    • The government sought to help local start-ups and reduce the dominance of giants such as Amazon and Walmart-Flipkart.
    • The rules sought to define the cross-border flow of user data after taking into account complaints by small retailers.

    Processes in the ONDC

    • Sellers will be onboarded through open networks. Other open-source processes will include those such as vendor and price discovery; and product cataloging.
    • The format will be similar to the one which is used in the Unified Payments Interface (UPI).
    • Mega e-commerce companies have proprietary processes and technology for these operations.
    • Marketplaces such as Amazon, Flipkart, Zomato, BigBasket and Grofers will need to register on the ONDC platform to be created by DPIIT and QCI.
    • The task of implementing DPIIT’s ONDC project has been assigned to the Quality Council of India (QCI).

    Why such a move by the govt?

    • This COVID pandemic has made every business to go digital.
    • India is a country with 700 million internet users of whom large crunch of population are active buyers on e-coms.
    • There are 9 platforms in the world which are billion user platform and all are private. This is the monopoly which the govt aims to hit.
    • No country would ever want a few (foreign) companies to control their domestic e-commerce ecosystem.
    • Countries like US are struggling to control their monopoly over the e-commerce giants leaving no space for Indian legislations to control these overseas companies.
    • In India Amazon, Walmart, Uber are controlling larger crunch of share in the market leaving very less scope for domestic companies to cope up with.

    Scope for ONDCs success

    • Over last 50 years India is dealing with Big Tech companies with responsibility and pragmatic manner. Now it is also coming with new policies to control them.
    • The drafting panel has extraordinary persons like Mr. Nandan Nilekani and others who were in Aadhar, NPCI, MyGov, Retail industry and these make it inclusive and innovative.
    • India has successfully executed various public digital platforms like JAM Trinity, Aadhar linked projects. India for sure can handle its digital ecosystem better in e-coms too.
    • Open-sourcing will benefit society at large as did the UPI.

    Issues that can be raised

    • Monopolies: Draft E-Commerce policy can raise resistance from companies like Amazon, Flipkart, and Walmart etc.
    • EODB concerns: They may raise hues over operability and ease of doing business.
    • Compliance burden: MSMEs have already raised the growing compliance burden for e-commerce.

    Other challenges

    • Every platform has its own challenges so would the ONDC may have.
    • While UPI was ruled out (BHIM being the first) people were reluctant in using it due to transaction failures.
    • With subsequent improvements and openness people and businesses are using it in every walks of life. So it would work with ONDC.

    Conclusion

    • Once adopted, ONDC will make sure consumer and seller interest will be protected as the UPI did.
    • Best is yet to come and we are in 4th industrial revolution where the Govt should strengthen itself accordingly and make businesses inclusive and restrict monopolies.

     

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  • Real Time Train Information System (RTIS) Project

    train

    The article discusses the partnership between Indian Railways and ISRO for real-time train tracking.

    Real Time Train Information System (RTIS) Project

    • Indian Railways has signed a MoU with the Indian Space Research Organization (ISRO) to use satellite-based technology for real-time train tracking.
    • The technology will be used to provide real-time information on the exact location and movement of trains across the country.

    How does it work?

    • The system will use ISRO’s satellite-based GPS technology, called the Indian Regional Navigation Satellite System (IRNSS), to track the location of trains.
    • The system will also use other advanced technologies, such as satellite imagery and geo-fencing, to provide real-time information on train movements.

    Applications of RTIS

    • RTIS gives mid-section updates with a periodicity of 30 seconds.
    • The Train Control can now track the location and speed of RTIS-enabled locomotives/train more closely, without any manual intervention.
    • It allows passengers to get the real-time location or train running status of a train on their smartphone.

    Benefits offered

    • The system will help to improve the efficiency and safety of train operations in India.
    • It will provide accurate and real-time information on train movements, which will help to reduce delays and improve scheduling.
    • The system will also help to enhance the overall passenger experience by providing real-time information on train status and location.

    Future plans

    • Indian Railways plans to use the technology for other applications, such as monitoring the health of trains and their components.
    • The partnership with ISRO is part of Indian Railways’ larger digital transformation initiative, which aims to leverage technology to improve the efficiency and safety of train operations.

     

  • India close to Hindu Rate of Growth: Raghuram Rajan

    hindu

    Central idea: Former RBI Governor Raghuram Rajan has warned that India is “dangerously close to the Hindu rate of growth”.

    What is Hindu Rate of Growth?

    • The “Hindu Rate of Growth” is a term used to describe the slow growth rate of the Indian economy between the 1950s and the 1980s.
    • It was coined by the Indian economist Raj Krishna in the 1970s.
    • During this period, the Indian economy grew at an average rate of around 3.5% per year, which was much lower than other developing countries like South Korea, Taiwan, and Hong Kong.
    • The term is considered controversial as it suggests that the slow growth rate was a result of cultural or religious factors rather than economic policies and structural issues.
    • However, the term is still used in academic and policy discussions to refer to the slow growth of the Indian economy during this period.

    Features of Hindu Rate of Growth

    The then features which led to the coining of this term were-

    • Low GDP growth rate: The term refers to the period from the 1950s to the 1980s when India’s economy grew at an average rate of around 3.5% per year, which was much lower than other developing countries.
    • Slow Industrialization: The industrial sector was dominated by a few public sector companies, and the private sector was heavily regulated.
    • Stagnant Agriculture: There was little investment in agriculture, and the sector was not given much priority in government policies.
    • License Raj: India had a socialist economic model with heavy government regulation. The License Raj system required permits and licenses for businesses, creating a bureaucratic and corrupt system that hindered innovation and entrepreneurship.
    • Import Substitution: India followed a policy of import substitution, where the government tried to develop domestic industries by protecting them from foreign competition. This led to a lack of competition, low quality of products, and high prices.
    • Inefficient Public Sector: The public sector dominated the economy, but it was inefficient, unproductive, and plagued by corruption. Public sector companies were often overstaffed and poorly managed, resulting in low productivity.
    • Lack of Foreign Investment: India was not attractive to foreign investors during this period, and there was little foreign investment in the economy. The government imposed strict controls on foreign investment, and the regulatory environment was not conducive to foreign investment.

    Concerns flagged by Rajan

    Rajan noted that India’s economic growth rate had been declining even before the COVID-19 pandemic hit the country.

    (a) Decline in GDP growth rate

    • India’s economic growth rate had fallen to 4.5% in the September quarter of 2019, before the pandemic hit in early 2020.
    • During the pandemic, the Indian economy contracted sharply, with GDP falling by 7.7% in the 2020-21 fiscal year.
    • The economy has rebounded somewhat, with the IMF forecasting GDP growth of 9.5% for the current fiscal year.

    (b) Lower growth potential than hyped

    • However, Rajan noted that India’s potential growth rate is likely to be lower than in the past, due to factors such as an aging population, a decline in the working-age population, and sluggish investment.
    • He also cited the country’s poor performance on human development indicators, such as education and health, as a constraint on growth.

    Key suggestions

    • Rajan called for measures to address the structural factors that are holding back growth, such as investment in infrastructure and education, and improving the ease of doing business in India.
    • He also emphasized the importance of macroeconomic stability and maintaining fiscal discipline, to avoid inflation and currency depreciation.
    • He also called for measures to address inequality, such as better targeting of subsidies to those who need them most.

    Conclusion

    • Overall, Rajan’s remarks suggest that India faces significant challenges in maintaining high levels of economic growth, and that structural reforms will be needed to address these challenges.

     

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  • Doubling Farmers’ Income: An Assessment

    Doubling

    Central Idea

    • Recently, Prime Minister shared his dream of doubling farmers’ incomes in the year when India completes 75 years of Independence and enters Amrit Kaal. Now that we have entered Amrit Kaal, it is a good time to revisit that dream and see if it has been fulfilled, and if not, how best it can be done. It was a noble dream because unless the incomes of farmers go up, we cannot have sustained high growth of overall GDP.

    What is Doubling Farmers Income scheme?

    • Doubling farmers’ income is a target set by the government of India in February 2016 to be achieved by 2022-23.
    • To promote farmers’ welfare, reduce agrarian distress and bring parity between income of farmers and those working in non-agricultural professions.
    • Doubling Farmers Income can directly have a positive effect on the future of agriculture.

    Doubling

    Doubling Farmers Income: A Noble Vision

    • Improved Farm Machinery and Advanced Technologies: If the income earned by the farmer is doubled, they will have access to better farm machinery and advanced technologies, leading to increased productivity, better quality of seeds, and improved farming techniques.
    • Increased Agricultural Productivity: Doubling farmers’ income means increasing agricultural productivity, which is essential for meeting the growing demand for food in the country.
    • Improved Quality of Crops: Increasing the income of farmers will not only increase agricultural production but also improve the quality of crops, which is crucial for ensuring food security and meeting quality standards for exports.
    • Growth of Indian Economy: Doubling farmers’ income will contribute to the growth of the Indian economy by increasing rural demand for goods and services, creating employment opportunities, and boosting overall economic growth.
    • Reduced Incidents of Farmer Suicides: Financial stress is one of the leading causes of farmer suicides in India. Doubling farmers’ income will provide them with financial security, which will reduce the incidents of farmer suicides and improve their overall well-being.

    Government efforts in this direction

    • Fertilizer subsidy: Fertilizer subsidy budget crosses Rs 2 lakh crore. Even when global prices of urea crossed $1,000/metric tonne, the Indian price of urea remained flat at around $70/tonne. This is perhaps the lowest price in the world.
    • PM-Kisan: The government has allocated Rs 60,000 crore to its flagship PM Kisan Samman Nidhi Yojana for the financial year 2023-24.
    • PM Garib Kalyan Anna Yojana: Further, many small and marginal farmers also get free ration of at least 5 kg/person/month through the PM Garib Kalyan Anna Yojana.
    • Subsidies and crop insurance: There are also subsidies for crop insurance, credit and irrigation (drip). States also dole out power subsidies in abundance, especially on irrigation. Even farm machinery for custom hiring centres is being subsidised by many states.

    Evaluation: Impact of all these policies on farmers’ incomes and on environment

    • Impact of Input Subsidies and Output Trade Policies on Farmers’ Income: While Input subsidies help raise farmers’ incomes by reducing the cost of inputs such as seeds, fertilizers, and irrigation. Output trade and marketing policies adopted by the government, such as the ban on exports of wheat or the 20% export tax on rice, can suppress farmers’ incomes.
    • Pro-Consumer Approach: The current policy approach is pro-consumer rather than pro-farmer, which is a fundamental problem with our policy framework.
    • Environmental Damage Caused by Subsidized Inputs and Uncontrolled Procurement Policies: The excessive subsidization of inputs like fertilizers and power, coupled with uncontrolled procurement of paddy and wheat in certain states, is causing severe environmental damage. There is a growing need to rationalize these policies.

    Doubling

    Way ahead

    • It is crucial to assess the net impact of input subsidies and output trade policies on farmers’ income to understand where they stand.
    • Realign the support policies keeping in mind environmental outcomes.
    • Millets, pulses, oilseeds, and much of horticulture could perhaps be given carbon credits to incentivise their cultivation. They consume less water and fertilisers. We need to make subsidies/support crop-neutral.
    • It is crucial to adopt policies that are pro-farmer and promote their interests, support income growth, and enhance overall economic growth.
    • Agriculture today needs innovations in technologies, products, institutions and policies for more diversified high-value agriculture that is also planet friendly.

    Notes for Good marks

    Agriculture: Crucial sector of the Indian Economy

    • Employment: Agriculture engages the largest share of the workforce (45.5 per cent in 2021-22 as per PLFS). Agriculture provides direct employment to around 50% of the Indian population, and it indirectly supports the livelihoods of millions more in allied industries such as agro-processing, transportation, and marketing.
    • Food and nutritional security: Agriculture is essential for meeting the food requirements of the country. India is one of the largest producers of rice, wheat, and other cereals, and it is also a significant producer of fruits, vegetables, and spices.
    • Contribution to GDP: Agriculture is a significant contributor to India’s Gross Domestic Product (GDP), accounting for around 17% of the country’s total GDP.
    • Foreign exchange earnings: India is a leading exporter of agricultural products such as Basmati rice, spices, tea, and cotton. The export of these products earns valuable foreign exchange for the country.
    • Rural development: Agriculture plays a vital role in the development of rural areas by providing employment and income opportunities, promoting entrepreneurship, and improving the standard of living in these areas.
    • Environmental sustainability: Agriculture is closely linked to the environment, and sustainable agricultural practices can help conserve natural resources, reduce carbon emissions, and promote ecological balance.

    Doubling

    Conclusion

    • On the question of doubling farmers’ income, we must realize it is going to take time. It can be done by increasing productivity through better seeds and better irrigation. It will have to be combined with unhindered access to the markets for their produce. Further, diversifying to high-value crops, and even putting solar panels on farmers’ fields as a third crop will be needed. It is only with such a concerted and sustained effort we can double farmers’ incomes.

    Mains Question

    Q. What do you understand by Doubling famers income? Enumerate the efforts taken by the government and what needs to be done to achieve the target?

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  • Agriculture: India Needs Green Revolution 2.0

    Green Revolution

    Central Idea

    • The statement made by the then viceroy, George Curzon in the early 20th century, that the Indian economy, particularly agriculture, is a gamble on the monsoon, may need to be rephrased in modern times. More than the monsoon, it is temperatures that are emerging as a greater source of uncertainty for farmers. Today, what India needs is Green Revolution 2.0.

    The fact today: Rising Temperatures Threaten Winter-Spring Harvest in India

    • Irrigation Prevents Winter-Spring Drought: The country now produces more foodgrains during the winter-spring season than in the post-monsoon season shows how irrigation has helped to prevent drought.
    • Rising Temperatures Threaten Winter-Spring Harvest: However, the rising temperatures in February and March pose a threat to the winter-spring harvest, which was previously considered safe from rainfall-related problems.
    • Shorter Winters, Earlier Summers Increase Crop Risks: Although thunderstorms and hail have always been a risk for winter-spring crops, they are now overshadowed by the risks from shorter winters and earlier summers.

    Heat Waves and wheat yield at present

    • Surge in temperature last year: The impact of temperature surge was seen in March 2022, when the wheat crop had just entered its final grain formation and filling stage. The heat stress led to early grain ripening and reduced yields.
    • Record-high temperatures in February this year: In February of this year, the maximum temperatures recorded were the highest ever seen. This is attributed to the absence of active western disturbances that bring rain and snowfall over the Himalayas, whose cooling effect percolates into the plains.
    • Rising Temperatures in Wheat-Growing Areas: Currently, minimum and maximum temperatures in most wheat-growing areas are ruling 3-5 degrees Celsius above normal. The next couple of weeks or more are going to be crucial. As long as the maximum remains within 35 degrees, there should be no danger of March 2022 repeating itself.

    Green Revolution

    Green Revolution in India

    • In India, the Green Revolution was mainly led by M.S. Swaminathan.
    • In 1961, M.S. Swaminathan invited Norman who suggested a revolution like what has happened in Mexico, Japan, etc in Indian agriculture.
    • Green Revolution was introduced with the Intensive Agriculture District Program (IADP) on an experimental basis in 7 districtin India.
    • In 1965-66 the HYV program was started which is the starting point of the Green Revolution in India.
    • The Green Revolution, spreading over the period from 1967-68 to 1977-78, changed India’s status from a food-deficient country to one of the world’s leading agricultural nations.
    • The Green Revolution resulted in a great increase in production of food grains (especially wheat and rice) due to the introduction into developing countries of new, high-yielding variety seeds, beginning in the mid-20th century.

    Green Revolution

    Why India Need another Green Revolution?

    • Climate change and food insecurity: Climate change poses a significant risk to Indian agriculture. The changing weather patterns, extreme temperatures, and rainfall variations are causing unpredictability in crop production, leading to food insecurity and farmer distress.
    • Declining Soil Fertility: Soil degradation and depletion of nutrients have affected the productivity of the land. It is necessary to develop crops that require less water and fertilizers and are disease-resistant.
    • For example: The development of genetically modified (GM) cotton has led to higher yields, less pesticide use, and improved soil health.
    • Price volatility: In addition to climate change, Indian farmers are also struggling with price volatility, as seen in the recent crash of onion and potato prices. This dual risk of climate and prices requires urgent attention from policymakers, farmers, and scientists to develop resilient crop varieties and effective crop planning and management.
    • Sustainable crop varieties: The need of the hour is to develop crop varieties that can withstand extreme temperature and rainfall variations while yielding more with less water and nutrients.
    • For instance: The use of precision agriculture techniques can help farmers manage their crops efficiently and minimize losses due to climate and price fluctuations.
    • Coordinated efforts: Improving market intelligence and access to markets is also crucial to ensure that farmers receive fair prices for their produce. This will require a coordinated effort from both the government and private sector to create efficient supply chains and distribution networks.
    • Success of the First Green revolution: The success of the first Green Revolution in India was built on scientific research, policy support, and effective implementation. Similarly, addressing the current challenges facing Indian agriculture will require a comprehensive approach that involves research, policy, and implementation at all levels of government and society.

    Prelims Shot: All you need to know about “Wheat”

    • Climate: It is a crop of temperate climate. It can be grown in the drier areas with the help of irrigation.
    • Temperature: 15°-20°C
    • Rainfall: 25-75 cms.
    • Soil: Well drained loamy and clayey soils are ideal.
    • Cultivation: On about 14% of the total arable area of the country.
    • Two important wheat producing zones in the country: The Ganga-Satluj plains in the north-west and the black soil region in the Deccan.
    • In north India: wheat is sown in October –November and harvested in March – April.
    • In south India: It is sown in September-October and harvested in December – January.
    • Uttar Pradesh (highest producer), Punjab (highest yield per hectare), Madhya Pradesh, Haryana, Rajasthan, Bihar, Gujarat, Maharashtra, West Bengal, Uttarakhand.
    • Important varieties: Sonalika, Kalyan, Sona, Sabarmati, Lerma, Roso, Heera, Shera, Sonara-64.
    • “Wheat takes lesser time in ripening in south India than that in the north because of hotter climatic conditions in the south.”

    Green Revolution

    Conclusion

    • India needs a new agricultural transformation to overcome the challenges it faces. Green Revolution 2.0 can help develop crops that are climate-resilient, require less water and fertilizers, and are disease-resistant. By investing in research and development of new technologies, India can achieve a more sustainable and profitable agriculture sector. Farmers must know what to plant, how to manage their crop at various stages under different stress scenarios, and when to sell. Agriculture for today and tomorrow cannot be the same as it was yesterday.

    Mains Question

    Q. Indian agriculture is under stress due to rising temperatures and climate change. In this light discuss why India need green revolution 2.0?

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  • SWAMIH investment fund and its affordable housing push

    swami

    The Special Window for Affordable and Mid-Income Housing (SWAMIH) Investment Fund I has raised Rs 15,530 crore so far.

    What is the SWAMIH investment fund?

    • The SWAMIH Investment Fund I is a social impact fund specifically formed for completing stressed and stalled residential projects.
    • The Fund is sponsored by the Ministry of Finance and is managed by SBICAP Ventures Ltd., a State Bank Group company.
    • The Fund is considered as the lender of last resort for distressed projects.

    Who are eligible for this fund?

    It considers-

    • First-time developers,
    • Established developers with troubled projects,
    • Developers with a poor track record of stalled projects,
    • Customer complaints and NPA accounts, and even
    • Projects where there are litigation issues.

    Significance of the funds

    • The Fund’s presence in a project often acts as a catalyst for better collections and sales primarily in projects that were delayed for years.
    • According to the Finance Ministry, SWAMIH Fund has one of the largest domestic real estate private equity teams focused only on funding and monitoring the completion of stressed housing projects.

    How many projects so far have been financed by the Fund?

    • SWAMIH has so far provided final approval to about 130 projects with sanctions worth over Rs 12,000 crore.
    • The Fund has completed 20,557 homes and aims to complete over 81,000 homes in the next three years across 30 tier 1 and 2 cities.
    • The Fund has been able to complete construction in 26 projects and generate returns for its investors.
    • It has also played a critical role in the growth of many ancillary industries in real estate and infrastructure sector having successfully unlocked liquidity of more than Rs. 35,000 crore.
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  • Capital Expenditure (CAPEX): Crucial Role Of The States

    Expenditure

    Central Idea

    • The budget’s clear thrust towards capital expenditure is evident in the 33% increase in its allocation. The primary goal of this allocation is to bolster aggregate demand in the short term and enhance the economy’s productive capacity in the long term. This strategy is widely regarded as beneficial, especially considering the crucial role that infrastructure plays in the growth and development of any economy.

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    Capital Expenditure of the states

    • Capex of the states exceed than the central govt: The combined spending of Indian states on capital expenditure now exceeds that of the central government.
    • For example: In 2021-22, this figure combined for states and Union territories, according to budget estimates, was ₹10.5 trillion. The Centre’s effective capital expenditure that year was ₹8.4 trillion, including ₹2.5 trillion as grant for creation of assets.

    What is Capital Expenditure (CAPEX)?

    • Capital expenditure refers to investments in upgrading existing or building new physical assets by the government or private businesses.
    • As businesses expand, capex has a multiplier effect on the economy, creating demand and unleashing animal spirits.

    Main types of Capex

    • Infrastructure development: This includes building and upgrading public infrastructure such as roads, highways, railways, ports, airports, power plants, and water supply systems.
    • Defence and security: This involve the acquisition and maintenance of defence equipment, weapons systems, and other security-related investments.
    • Social sector spending: This includes investment in areas such as education, healthcare, and social welfare programs to improve the quality of life of the citizens.
    • Rural development: This includes spending on agricultural and rural infrastructure such as irrigation systems, rural electrification, and rural housing.
    • Capital investments in public sector enterprises: The government may also invest capital in public sector enterprises to improve their efficiency and profitability

    Key reasons why the Indian government emphasizes Capex?

    • Promoting economic growth: Capital expenditure is critical for promoting economic growth by creating demand for goods and services, boosting private sector investment, and increasing employment opportunities. By investing in infrastructure, the government can provide the necessary framework for businesses to grow and thrive.
    • Improving public services: Capital expenditure is required to build and upgrade public facilities such as hospitals, schools, and water supply systems, and provide necessary equipment and supplies. This investment in public services is crucial for improving the quality of life of citizens and promoting social and economic development.
    • Infrastructure development: It is critical for promoting trade, commerce, and investment, and improving the country’s overall competitiveness. By investing in infrastructure, the government can create new economic opportunities, support the growth of existing industries, and attract foreign investment.
    • Creating employment opportunities: Capital expenditure creates employment opportunities in the short term through the construction of infrastructure projects and in the long term by supporting economic growth and promoting private sector investment.
    • Attracting private sector investment: The government’s emphasis on Capex can also help attract private sector investment by providing the necessary infrastructure and a favourable business environment.

    What are the concern over State capex?

    • Uneven capacity CAPEX: One general macro-economic challenge is to address this uneven inclination of states or capacity for capital expenditure, which adds uncertainty to the impact of an expansionary fiscal policy led by capex, thus weakening its potential benefits.
    • The ultimate aim of all CAPEX is to enhance the productive capacity of the economy: The nature of state capital expenditure drawn in is also vitally important. Ideally, the nature of state capital expenditure drawn in by central capital expenditure should be such that it dovetails with the latter to optimize long-term enhancements of economic capacity.
    • States have tendency to postpone capex: The Union budget for 2023-24 encourages states to make reforms in urban local bodies to become creditworthy for municipal bond issuance. However, states have a tendency to postpone capital expenditure until revenue streams firm up.

    Way ahead

    • States need to improve their execution capacity and establish an enabling regulatory environment to ensure quality and speed of expenditure.
    • The planning and budgeting cycle of states should also be aligned with fund releases to fully utilize resources within the available time.
    • States play a crucial role in capital expenditure and must not only budget more but also spend fully and uniformly throughout the year.

    Conclusion

    • States need to prioritize timely and efficient execution of capital expenditure and fully utilizing budgeted capital amounts uniformly throughout the year. The RBI report, while acknowledging that Indian states made higher capital outlays in 2022-23, notes that states would do well to mainstream capital planning rather than treating them as residuals and first stops for cutbacks in order to meet budgetary targets.

    Mains Question

    Q. What do you understand by Capital Expenditure (CAPEX)? Highlight the concerns over capex by the states and suggest a way ahead.

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  • Distributed Renewable Energy (DRE) Transforming Rural Women’s Life

    DRE

    Central Idea

    • Women from rural India are adopting clean energy-based livelihood technologies to catalyse their businesses. From solar refrigerators to silk-reeling machines and biomass-based cold storage to bulk milk chillers, distributed renewable energy (DRE) is transforming women’s livelihoods at the grassroots.

    What is Distributed Renewable Energy (DRE)?

    • DRE refers to the generation and distribution of electricity from renewable energy sources, such as solar, wind, hydro, geothermal, and biomass, through small-scale, decentralized systems.
    • These systems are often installed in remote or rural areas where it is difficult or expensive to connect to a centralized power grid.
    • DRE systems can range from individual rooftop solar panels to small-scale wind turbines, mini-hydro systems, and biomass generators.
    • They are typically designed to serve a single household or community, rather than a large urban or industrial center.
    • DRE systems are also known as off-grid or mini-grid systems, and they can be standalone or connected to a larger power grid.

    Recent Statistics

    • More than 80% are women: A recent Council on Energy, Environment and Water (CEEW) study has shown that out of the 13,000 early adopters of clean tech livelihood appliances, more than 80% are women.
    • Future projection: By 2030, India is expected to see 30 million women-owned micro, small and medium enterprises (MSMEs) employing around 150 million people. DRE livelihood technologies a $50 billion market opportunity in India alone have the potential to transform rural livelihoods, with women at the core of this transition.

    DRE

    Advantages of DRE systems

    • Several advantages: They are more resilient to natural disasters and grid failures, they can reduce energy costs for communities and households, and they can increase energy access in areas that are not served by the main power grid.
    • Reduce carbon emissions: Additionally, DRE systems can reduce carbon emissions and help to mitigate the impacts of climate change.
    • DRE advantages for women: DRE-powered technologies provide an additional advantage to women farmers and microentrepreneurs by enhancing income opportunities through mechanization. They also free women from several gender-assigned manual activities that are laborious.

    DRE

    Steps to scale up this impact

    • Leverage the experience of early women adopters: The technology providers must leverage early users to share their experiences with potential customers, becoming demo champions/sales agents to market these products, based on their first-hand product experience and local credibility.
    • For example: Kissan Dharmbir, an energy-efficient food processor manufacturer, engaged Neetu Tandan, an Agra-based micro-entrepreneur using the processor to produce fruit squashes and jams, as a demo champion. Her demonstrations are generating sales leads.
    • Organise hyperlocal events and demos: These events also create spaces for women to network, become aware of the product and connect with people who can help them procure, finance and use these machines.
    • For example: At an event in Hamirpur, Uttar Pradesh, more than 200 women booked seven appliances on the spot, including solar sewing machines and multi-purpose food processors.
    • Enable easy finance to purchase products: Limited avenues to avail financing for these clean technology products remain a bottleneck. Financiers supporting women farmers and microentrepreneurs should consider the technologies themselves as collaterals while easing the loan application process.
    • For example: Samunnati Finance, a financier in the agri-value chain, availed an 80% first-loan default guarantee to support six women-led FPOs in Andhra Pradesh that purchased 100-kg solar dryers.
    • Support backwards and forward market linkages: Only technology provision is not enough in all cases. Many rural products have larger market potential. Thus, finding and connecting producers to consumption hubs in urban areas are equally important to generate higher incomes.
    • Ensure adequate after-sales services buy backs: Technology manufacturers and promoters should also ensure adequate after-sales services and buy-backs. To build financiers’ confidence, evidence on the economic viability of these technologies should be shared and promoters must offer partial default guarantees.
    • Enable policy convergence: No private sector entity has the kind of reach and scale government institutions have, so leveraging their reach is imperative to exponentially scale up. Multiple Ministries are working towards promoting livelihoods for women from State rural livelihood missions, horticulture and agriculture departments, Ministry of Micro, Small and Medium Enterprises, to the Ministry of Textiles. They should embrace clean energy solutions to further their respective programmes and outcomes.

    What are the challenges that women face?

    • Perception of high risk: The high starting price and newness of DRE appliances can create a perception of high risk, particularly for women users who may have a lower risk appetite due to socio-economic factors.
    • Low belief: Due to historical limitations on women’s access to new information, people tend to want to physically touch and see high-tech, high-priced DRE products before believing in their ability and promised benefits.
    • Limited network: Women often struggle with established market linkages because of their limited mobility and networks outside their villages.

    DRE

    Conclusion

    • Much like it takes a village to raise a child, scaling the impact of clean energy solutions on women’s livelihoods needs a village of policymakers, investors, financiers, technology promoters and other ecosystem enablers. Only then can we truly unlock the potential of rural women and clean technologies simultaneously.

    Mains question

    Q. What do you understand by Distributed Renewable Energy (DRE)? What is to be done scale up this impact from thousands of women to millions of them?

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