Government nod for UDAY bonds:-
Background :-The Finance Ministry has approved the issuance of Ujjwal Discom Assurance Yojana (UDAY) bonds by four states. They are Uttar Pradesh, Rajasthan, Jharkhand and Chattisgarh.Manipur and Tripura recently agreed to join UDAY. This takes the total number of states that have agreed to join UDAY to 16. So far, six states have signed the UDAY contract.
Objective of the bonds:-
State governments can take over 75% cent of discom debt and pay back lenders by issuing bonds. The scheme provides for the remaining 25 per cent of the debt to be paid back through discom-issued bonds. Total discom debt in the country amounts to Rs.4.3 lakh crore.
UDAY :-Ujjwal Discom Assurance Yojana
UDAY provides for the financial turnaround and revival of Power Distribution companies (DISCOMs), and importantly also ensures a sustainable permanent solution to the problem.
The weakest link in the value chain is distribution, wherein DISCOMs in the country have accumulated losses of approximately Rs. 3.8 lakh crore and outstanding debt of approximately Rs. 4.3 lakh crore (as on March, 2015)
Financially stressed DISCOMs are not able to supply adequate power at affordable rates, which hampers quality of life and overall economic growth and development. Efforts towards 100% village electrification, 24X7 power supply and clean energy cannot be achieved without performing DISCOMs. Power outages also adversely affect national priorities like “Make in India” and “Digital India”. In addition, default on bank loans by financially stressed DISCOMs has the potential to seriously impact the banking sector and the economy at large.
UDAY assures the rise of vibrant and efficient DISCOMs through a permanent resolution of past as well as potential future issues of the sector. It empowers DISCOMs with the opportunity to break even in the next 2-3 years. This is through four initiatives:-
(i) Improving operational efficiencies of DISCOMs;
(ii) Reduction of cost of power;
(iii) Reduction in interest cost of DISCOMs;
(iv) Enforcing financial discipline on DISCOMs through alignment with State finances
Salient Features of UDAY :-
- States shall take over 75% of DISCOM debt as on 30 September 2015 over two years – 50% of DISCOM debt shall be taken over in 2015-16 and 25% in 2016-17.
- Government of India will not include the debt taken over by the States as per the above scheme in the calculation of fiscal deficit of respective States in the financial years 2015-16 and 2016-17.
- States will issue non-SLR including SDL bonds in the market or directly to the respective banks / Financial Institutions (FIs) holding the DISCOM debt to the appropriate extent.
- DISCOM debt not taken over by the State shall be converted by the Banks / FIs into loans or bonds with interest rate not more than the bank’s base rate plus 0.1%. Alternately, this debt may be fully or partly issued by the DISCOM as State guaranteed DISCOM bonds at the prevailing market rates which shall be equal to or less than bank base rate plus 0.1%.
- States shall take over the future losses of DISCOMs in a graded manner and shall fund them.
- State DISCOMs will comply with the Renewable Purchase Obligation (RPO) outstanding since 1st April, 2012, within a period to be decided in consultation with Ministry of Power.
- States accepting UDAY and performing as per operational milestones will be given additional / priority funding through Deendayal Upadhyaya Gram Jyoti Yojana (DDUGJY),Integrated Power Development Scheme (IPDS), Power Sector Development Fund (PSDF) or other such schemes of Ministry of Power and Ministry of New and Renewable Energy
- Such States shall also be supported with additional coal at notified prices and, in case of availability through higher capacity utilization, low cost power from NTPC and other Central Public Sector Undertakings (CPSUs).
- States not meeting operational milestones will be liable to forfeit their claim on IPDS and DDUGJY grants.
- UDAY is optional for all States. However, States are encouraged to take the benefit at the earliest as benefits are dependent on the performance.
India at 90th rank in terms of energy security, access: WEF
India has been ranked at the 90th place in a list of 126 countries compiled by WEF on the basis of their ability to deliver secure, affordable and sustainable energy.
- The latest Global Energy Architecture Performance Index Report, explored the energy architecture of 126 countries based on their ability to provide energy access across three dimensions of the “energy triangle” — affordability, environmental sustainability, security and access.
- The list was topped by Switzerland followed by Norway, Sweden,France ,Denmark,Austria,Spain,Colombia,New Zealand and Uruguay.
- Among the BRIC nations, Brazil was the top performer as it was ranked at the 25th place, followed by Russia (52nd), India (90th), China (94).
- Among other major economies Germany was ranked at the 24th place, while the United States was at the 48th rank and Japan was at the 50th rank.
Important observations made by the report:
- India is facing a vast array of challenges in the power sector in order to meet its growth targets. Nevertheless, electrification appears to have progressed.
- Large emerging economies are pressed both by the need to support economic growth and build resilient and sustainable energy architecture.
- World energy production and imports rose by 3,200 million tonnes of oil equivalent over the last decade, driven by the boom in the Asian economies and led by China and India.
- As per IEA’s World Energy Outlook 2015, by 2040, China’s net oil imports will be nearly five times those of the United States, while India’s will easily exceed those of the EU.
The future of Energy in India
Chronology of Energy in India
India’s power sector is at an inflection point, given the government’s conviction that electricity is a critical enabler for economic growth.India, home to 18% of the world’s population, uses only 6% of the world’s primary energy. India’s energy consumption has almost doubled since 2000 and the potential for further rapid growth is enormous.
India’s economy, already the world’s third-largest, is growing rapidly and policies are in place to press ahead with the country’s modernisation and an expansion of its manufacturing. If a well-managed expansion of energy supply can be achieved, the prize in terms of improved welfare and quality of life for India’s 1.3 billion people is huge – first and foremost for the estimated 240 million that remain today without access to electricity.
Policy-makers at national and state levels are intensifying their efforts to ensure that energy is a spur, rather than a hindrance, to India’s advancement, looking to removing obstacles to investment in energy supply while also focusing on energy efficiency and pricing reform (the deregulation of diesel prices in late 2014, taking advantage of the fall in the oil price, means that all oil-based transport fuels are now subsidy-free).
Coal is by far the most important fuel in the energy mix, but India’s recent climate pledge underlined the country’s commitment to a growing role for low-carbon sources of energy, led by solar and wind power.
India seizes the centre of the world energy stage and is set to contribute more than any other country to the projected rise in global energy demand, around one-quarter of the total: even so, energy demand per capita in 2040 is still 40% below the world average.
India’s total energy demand more than doubles in our main scenario, propelled higher by an economy that is more than five times larger in 2040 and a demographic expansion that makes India the world’s most populous country.
With energy use declining in many developed countries and China entering a much less energy-intensive phase in its development, India emerges as a major driving force in global trends, with all modern fuels and technologies playing a part. Surging consumption of coal in power generation and industry makes India, by a distance, the largest source of growth in global coal use.
Oil demand increases by more than in any other country, approaching 10 mb/d by 2040. India steps up its deployment of renewable, led by solar power, for which India becomes the world’s second-largest market.
Natural gas consumption also triples to 175 bcm (although, at 8% in 2040, it still plays a relatively limited role in the overall energy mix).
Solid biomass, mainly fuelwood, is the only major source of energy that does not see a large increase. This mainstay of the rural energy economy is the primary cooking fuel for some 840 million people in India today; its use in traditional stoves is a major cause of indoor air pollution and premature death.
Its gradual (albeit not complete) displacement by alternative fuels in our projections to 2040 is achieved, thanks to rising incomes and supportive policies; these include one of the world’s largest cash transfer programmes, which subsidises the purchase of LPG cylinders via payments to individual bank accounts, rather than via an intervention affecting end-user prices.
India’s urbanisation is a key driver of energy trends: an additional 315 million people – almost the population of the United States today – are expected to live in India’s cities by 2040.
This transition has wide-ranging effects on energy use, accelerating the switch to modern fuels, the rise in appliance and vehicle ownership and pushing up demand for construction materials. Three-quarters of the projected increase in energy demand in residential buildings comes from urban areas, driving the sector’s energy use away from solid biomass (two-thirds of the total today) and towards electricity and oil (45% and 15% of the 2040 total, respectively).
Since most of the 2040 building stock has yet to be constructed, there is a tremendous opportunity for India to expand and tighten efficiency standards and ensure that future demand for energy services – notably for cooling – is met without putting undue strain on energy supply.
Successful initiatives include a huge and cost-effective programme to replace old, inefficient light bulbs with LEDs, but the scope of other efficiency measures for buildings and appliances, while expanding, is still far from comprehensive.
The “Smart Cities” programme, launched in 2015, puts a welcome emphasis on integrated planning and provision of urban services (including power, water, waste and mass transportation), although faces the considerable challenge of coordinated delivery across different branches and levels of government.
India’s need for new infrastructure underlies strong demand for energy-intensive goods, while the rising level of vehicle ownership keeps transport demand on an even steeper upward curve. Energy use in industry is the largest among the end-use sectors, its share in final consumption rising above 50% by 2040.
Industrial energy use is buoyed by substantial growth in output of steel, cement, bricks and other building materials, and by the expansion of domestic manufacturing encouraged by the “Make in India” initiative.
India’s power system needs to almost quadruple in size by 2040 to catch up and keep pace with electricity demand that – boosted by rising incomes and new connections to the grid – increases at almost 5% per year.
The power system has grown rapidly in recent years, but the poor financial health of many local distribution companies remains a key structural weakness: low average end-user tariffs, technical losses in the network, and high levels of non-payment for electricity mean that distribution company revenue often fails to cover the costs owed to generators. This has created a cycle of uncertainty for generators and held back much-needed investment in network infrastructure. The situation varies from state to state, but stimulating the necessary grid strengthening and capacity additions requires pressing ahead with regulatory and tariff reform and a robust system of permitting and approvals for new projects.
In the meantime, regular load-shedding in many parts of the country obliges those consumers who can afford it to invest in costly back-up options, and results in poor quality of service for those who cannot.
Taking population growth into account as well as the high policy priority to achieve universal electricity access, India adds nearly 600 million new electricity consumers over the period to 2040.
The vast majority of Indians continue to receive their power via the grid, but mini-grid and off-grid solutions provide more than half of the electricity supply to those gaining access in our projections, especially in areas distant from existing transmission lines or of lower population density.
Over 50% of new generation capacity to 2040 comes from renewables and nuclear, while new coal-fired plants in India represent nearly half of the net coal capacity added worldwide.
Keeping pace with the demand for electricity requires nearly 900 GW of new capacity, the addition of a power system four-fifths the size of that of the United States today. Uncertainty over the pace at which new large dams or nuclear plants can be built means strong reliance on solar and wind power (areas where India has high potential and equally high ambition) to deliver on the pledge to build up a 40% share of non-fossil fuel capacity in the power sector by 2030.
Some 340 GW of new wind and solar projects, as well as manufacturing and installation capabilities, are galvanised to 2040 by strong policy support and declining costs, although the pace of deployment is slowed by anticipated issues with networks, land use and financing.
Decentralised rooftop solar and off-grid projects account for around 90 GW of this total, but the bulk of the additions is utility scale. Balancing a power system in which variable renewables meet one-fifth of power demand growth requires flexibility from other sources (a role largely filled by gas-fired plants in our projections) and a much more resilient grid.
The share of coal in the power generation mix falls from three-quarters to less than 60%, but coal-fired power still meets half of the increase in power generation. A shift to more efficient technologies brings up average coal plant efficiency significantly.
Other measures, including the announced moves to higher standards for vehicle emissions and fuel quality, help to limit the growth in energy-related emissions of particulates, fumes and other local pollutants. Nonetheless, without a continuous focus on emissions control technologies in the power sector, industry and transport, India faces the risk of a deterioration in urban air quality.
Domestic production strains to keep pace . A large expansion of coal output makes India the second-largest coal producer in the world, but rising demand also means that India becomes, before 2020, the world’s largest coal importer, overtaking Japan, the European Union and China.
Reforms to the system of coal procurement and contracting underpin new mining investment and a more efficient allocation of coal to consumers, including an expansion of competitively-priced imports in parts of coastal India.
Growth in production is constrained by the concentrated structure of the coal industry, issues of land use and permitting, and infrastructure bottlenecks, but is sufficient to bring dependence on imports back down to current levels around 30%, from a peak of around 40% reached in 2020.
Coal demand that is two-and-a-half-times higher than today by 2040 (although still only around half the projected level in China) is the main factor behind a large rise in India’s energy-related CO2 emissions. These nearly triple to reach 5 gigatonnes in 2040, a significant contribution to the rise in global emissions over this period. Nonetheless, relative to the size of the economy, energy-related CO2 emissions fall in line with India’s pledge to reduce its emissions intensity by 33-35% below 2005 levels by 2030, and, expressed on a per capita basis, emissions remain some 20% below the world average in 2040.
Production of oil and gas falls well behind the growth in demand:
India’s reliance on oil imports rises above 90% by 2040, requiring constant vigilance as to the implications for energy security. India has a relatively small but still under-explored hydrocarbon resource base.
India is the world’s third-largest importer of crude oil, although a large and efficient refinery sector gives it a surplus of oil products, mainly transport fuels, for export. In our projections, crude imports rise to 7.2 mb/d in 2040 (second only to China), sourced predominantly from the Middle East. India’s refinery capacity is projected to rise steadily and refinery output is increasingly directed to meet rising domestic demand. Indian refiners face an ever-more competitive product export market, particularly with the envisaged expansion of refining capacity in the Middle East.
“Make in India” needs energy to work and needs efficiency to prosper:-
Putting manufacturing at the heart of India’s growth model means a large rise in the energy needed to fuel India’s development. Industry-led growth requires at least 10-times more energy per unit of value added compared with growth led by the services sector.
The additional demands on the energy system come primarily from industry, not only from energy-intensive sectors, but also from other industries that are targeted by the “Make in India” campaign such as textiles, food processing, machinery and industrial equipment. Energy use for road freight, residential consumption and for a more mechanised and productive agricultural sector also rise. To avoid that this extra demand exacerbates energy security and environmental strains requires an even-stronger commitment to energy efficiency as a central pillar of India’s energy strategy, alongside an unwavering push for low-carbon energy and high standards of pollution control.
Meeting India’s energy needs requires a huge commitment of capital:-
India requires a cumulative $2.8 trillion in investment in energy supply in our main scenario, three-quarters of which goes to the power sector, and a further $0.8 trillion to improve energy efficiency. Investment in energy supply is held at similar levels in the Indian Vision Case, but only because of a near-doubling in spending on greater efficiency.Mobilising cost-efficient investment at average levels of well above $100 billion per year is a constant challenge for Indian policy at national and state levels, requiring effective coordination between multiple institutions and levels of government (the model of “co-operative federalism”), continued efforts to overhaul
India’s energy regulatory framework had to simplify an often-complex business environment. A transparent system of approvals and clearances needs to allow viable projects to move ahead according to a predictable timetable, while safeguarding the consultation and accountability that is essential to win public consent.
India will also need to call upon a broader range of investors and sources of finance than has been the case in the past, not least in order to relieve the scarcity of long-term finance on suitable terms for low-carbon investment. Sustainable and affordable energy, underpinned by energy technology cooperation and innovation, is indispensable to India’s outlook for economic growth and poverty reduction; the carbon intensity of India’s development is also a critical barometer of the success or failure of efforts to tackle global climate change. There is a clear mutual interest, shared by India and the international community, in strong support for India’s drive to deploy more efficient and low-carbon technologies.
Environment Ministry releases new categorisation of industries
“Re-categorization of industries based on their pollution load is a scientific exercise. The old system of categorization was creating problems for many industries and was not reflecting the pollution of the industries. The new categories will remove this lacuna and will give clear picture to everyone. 25 industrial sectors which were not critically polluting were also earlier categorized as Red. This was creating wrong impression to everyone”, as stated by the minister.
The Ministry of Environment, Forest and Climate Change (MoEFCC) has developed the criteria of categorization of industrial sectors based on the Pollution Index which is a function of the emissions (air pollutants), effluents (water pollutants), hazardous wastes generated and consumption of resources.
o Industrial Sectors having Pollution Index score of 60 and above – Red category
o Industrial Sectors having Pollution Index score of 41 to 59 – Orange category
o Industrial Sectors having Pollution Index score of 21 to 40 – Green category
o Industrial Sectors having Pollution Index score incl. & upto 20 – White category
The salient features of the ‘Re-categorization’ exercise are as follows:
Ø Due importance has been given to relative pollution potential of the industrial sectors based on scientific criteria. Further, wherever possible, splitting of the industrial sectors is also considered based on the use of raw materials, manufacturing process adopted and in-turn pollutants expected to be generated.
Ø The Red category of industrial sectors would be 60.
Ø The Orange category of industrial sectors would be 83.
Ø The Green category of industrial sectors would be 63.
Ø Newly-introduced White category contains 36 industrial sectors which are practically non-polluting.
Ø There shall be no necessity of obtaining the Consent to Operate’’ for White category of industries. An intimation to concerned SPCB / PCC shall suffice.
Ø No Red category of industries shall normally be permitted in the ecologically fragile area / protected area.
The details of the industries falling under Red, Orange , Green and White categories are presented in tables 1, 2, 3 & 4 respectively (given below).
The newly introduced White category of industries pertains to those industrial sectors which are practically non-polluting, such as Biscuit trays etc. from rolled PVC sheet (using automatic vacuum forming machines), Cotton and woolen hosiers making (Dry process only without any dying/washing operation), Electric lamp (bulb) and CFL manufacturing by assembling only, Scientific and mathematical instrument manufacturing, Solar power generation through photovoltaic cell, wind power and mini hydel power (less than 25 MW).
The purpose of the categorization is to ensure that the industry is established in a manner which is consistent with the environmental objectives. The new criteria will prompt industrial sectors willing to adopt cleaner technologies, ultimately resulting in generation of fewer pollutants. Another feature of the new categorization system lies in facilitating self-assessment by industries as the subjectivity of earlier assessment has been eliminated. This ‘Re-categorization’ is a part of the efforts, policies and objective of present government to create a clean & transparent working environment in the country and promote the Ease of Doing Business.
Women’s contribution is crucial to building a strong and vibrant nation:VP
Note:- Not all data are important , hence kindly read all but understand the pattern and retain the round about figures to quote in exam.
Excerpts from the speech:-
- Giving women constitutional rights to suffrage is one thing, but its tangible impact in raising women’s power and influence in polity and society is an altogether different matter. Notwithstanding the fact that almost 47 percent of the total voters were women during the last Lok Sabha elections in 2014, patriarchy and social norms have hindered its full reflection in positions of power.
- More than two decades earlier, in 1993, the need was felt to give greater representation in elected bodies. This took shape in the 73rd and 74th Constitution Amendment Acts regarding membership and Chairpersonships in Panchayats and Municipalities. This initiative redefined gender representation in decision-making process at the grassroots level. At present, there are 1.27 million elected women representatives in Panchayats which constitute 43.56 per cent of total elected representatives. This is perhaps the largest ever representation of women in elected bodies anywhere in the world.
- Despite the challenges of ‘proxyism’, women representatives have performed exceptionally well in the local bodies. In recognition of the good performance of women in local bodies, as many as sixteen states have introduced 50 per cent reservation for women in Panchayats. Other states may follow suit. However, the introduction of statutory requirement of meeting new eligibility conditions such as certain level of education, number of children or other criteria to fight Panchayat elections in many states is loaded against women. This calls for serious reflection.
- Here a paradox confronts us. The increase in women representation at local bodies has not led to commensurate increase of women members in legislatures both at the Centre and State. Today, our Parliament’s gender profile is woefully unbalanced with women constituting only 12 per cent of the total membership. As such, the average number of women members in Parliament has never been more than 12 per cent since the first Lok Sabha. In the states too, the average share of women legislators is only nine per cent in the Legislative Assemblies and only six per cent in Legislative Council
- This does not compare favourably with global trends. Apart from the Nordic pattern of around 40 percent women’s representation, a recent survey by the Inter Parliamentary Union (IPU) shows a world average of 22.7 percent in national parliaments.
- The first corrective has to be made by political parties. To shore up women’s political representation, all political parties need to extend their support to ensure that the Constitutional Amendment Bill to provide for 33 percent reservation to women in the Lok Sabha and State Legislative Assemblies is not delayed further.
- Until then, at least they need to expand their pool of women candidates. If we see the track record of the six national parties in fielding women candidates during the last general elections, 2014 we find that out of a total of 1591 candidates fielded by them only 146 constituting 9.17 per cent were women. This is certainly not very encouraging.
- Besides, the respective political parties must broad base their nomination while nominating their women members to the committees, statutory bodies as also while selecting speakers to participate in the debates in the House on other areas of public concern.
- The task of nation building is an arduous exercise and a complex process. It involves men as much as women. Several studies show that women’s political participation results in tangible gains for democratic governance, including greater responsiveness to citizens’ needs. Women are also often the strongest voices for peace and nonviolence. Women’s leadership and conflict resolution styles embody democratic ideals and they tend to work in a less hierarchical, more participatory and more collaborative manner than male colleagues. Thus, women’s contribution is crucial to building a strong and vibrant nation. We can ignore it at our own peril.
Need to put in place a ‘Grow in India’ programme to transform the socio-economic fabric of our agricultural sector: VP
Note:- Not all data are important , hence kindly read all but understand the pattern and retain the round about figures to quote in exam.
Excerpts from the speech:-
- We gained our independence in August 1947. Freedom came in the wake of the great, man-made, Bengal Famine of 1942-43 which claimed about 3 million victims. In the early years of freedom, food shortages were rampant, dependence of food imports was perennial, and food rationing was regularly resorted to. For this reason, Jawaharlal Nehru said in 1948 that ‘everything else can wait but not agriculture’. In 1951-52, the total grain production was 52 million tons. Today, it is over 264 million tons.
- The centrality of Agriculture in the socio-economic fabric of India is thus self evident. As a source of livelihood, agriculture – including forestry and fishing- remains the largest sector of Indian economy. While its output fell from 28.3% of the economy in 1993-94 to 13.9% in 2013-14, the numbers employed have declined only from 64.8% to 48.9%. Therefore, almost half of the workforce in India still remains dependent on agriculture.
- Agriculture is also a source of raw materials to a number of food and agro-processing industries. It is estimated that industries with raw material of agricultural origin accounted for 50% of the value added and 64% of all jobs in the industrial sector. At $38 billion, agricultural export in 2014-15 constituted 10% of our exports.
- After independence, we undertook special programmes such as the Grow More Food Campaign and the Integrated Production Programme focused on improving food and cash crops supply. Land-reforms were undertaken with two specific objectives. First- to remove impediments to increase in agricultural production arising from the inherited agrarian structure; and Second- to eliminate elements of exploitation and social injustice within the agrarian system, to provide security for the tiller of soil and assure equality of status and opportunity to all sections of the rural population.
- Successive Five Year Plans stressed self-sufficiency and self-reliance in food-grain production. Concerted efforts in this direction did result in substantial increase in agricultural production and productivity. This was the ‘Green Revolution’.
- Today, India is the largest exporter of rice in the world, and the second-largest exporter of buffalo meat and cotton. India is the largest producer of milk, and the second-largest producer of fruits and vegetables, rice, wheat and sugarcane.
- There are, however, indications that the Green Revolution benefits have plateaued. There is criticism that the input intensive approach has largely been irrelevant for 60% of India’s cultivable land which is un-irrigated. These rain-fed areas have failed to benefit from public spending despite the fact that 90% of the country’s oilseed, 81% pulses and 42% food grains are produced here.
- Since the early 1990s, liberalization and globalization have become central elements of development strategy of the government. This has also had an impact on Indian agriculture. Such measures were aimed at creating a potentially more profitable agriculture sector, which could ‘bear the economic costs of technological modernization and expansion’.
- The reforms appear to have improved terms of trade for agriculture but growth in agricultural sector has been weak and well below that of non-agricultural sectors. The gap between rural and urban incomes has widened. While national income has grown at above 6% over the last five years, agricultural income grew by mere 1.1% during 2014-15.
- A survey commissioned by Bharat Krishak Samaj on ‘The State of the Indian Farmer’ in 2014 reported that some 62% of Agriculturists were willing to quit farming to move to cities and that only 20% of the rural youth was keen on continuing farming. The survey found that more than 40% farmers were dissatisfied with their economic condition. The figure was more than 60% in eastern India. These are disturbing trends.
- Since 1995, some 300,000 farmers have committed suicide in the country. According to P. Sainath, ‘suicide rates among Indian farmers were a chilling 47 per cent higher than they were for the rest of the population in 2011.’ The issue of farmer’s suicides is, no doubt, a complex one but it brings into sharp focus the stresses that the agricultural sector in India is now subject to. The recent mobilization- in support of demands for caste based reservations in government jobs, and not for betterment in Agro sector- by communities that have traditionally benefitted from Agriculture- also indicates the growing stress within Indian agriculture.
- Some policy experts have noted that public fund allocation to Agriculture remains substantial. Of the five concerned Ministries related to agro-sector- Agriculture, Chemical and Fertilizers, Consumer Affairs, Food and Public Distribution, Food Processing Industries, and Water Resources- for 2015-16 was roughly Rs 2.3 lakh crore. This is not a paltry sum.
Why is the Indian Agriculture under such stress despite the quantum of public investments it appears to be receiving?
- It has been observed that small farms in India are superior in terms of production performance but weak in terms of generating adequate income and sustaining livelihoods. Small and marginal farmers, whose land holdings are below 2 hectares, constitute almost 80% of all Indian farmers, and more than 90% of them are dependent on rain for their crops. Their participation in agricultural market remains low due to a range of constraints such as low volumes, high transaction costs, lack of markets and information access.
- This disparity is illustrated starkly by the experience from Punjab- a state which has undergone substantial modernization of the agricultural sector. There was consolidation in the land holdings and the subsidization of fertilizers and electricity for irrigation. Per hectare consumption of fertilizers increased and water intensive crops like cotton and rice were adopted. Studies have shown that the total operational cost of rice and wheat production increased by around 50% between 2000-2001 and 2005-2006, while rice yields increased by only 12%, and wheat yields actually declined by 8%. Thus, while farmers invested more on growing their crops, their total output, and therefore their profit, continued to decline. As the water tables have fallen, only farmers who were able to afford more powerful- and more expensive- equipment have been able to use the subsidized electricity for irrigation. The subsidies on fertilizers have also resulted in the unrestricted use of chemicals leading to salinization and Nitrogen-nutrients imbalance in formerly fertile soils.
- The Economic Survey for 2015-16 includes a detailed analysis of fertilizer subsidy and its associated inefficiencies and misuses. Rs 73,000 crore, amounting to 0.5% of the GDP, was budgeted for fertilizer subsidy. However, the Survey highlights three types of leakages for urea alone. First, it points out that 24% of the urea subsidy goes to inefficient producers of urea manufacturers; second, of the remaining urea subsidy, 41% is diverted to non-agricultural uses and is smuggled to neighbouring countries; and third, most of the remaining 24% is consumed by large farmers. So, in a nutshell, only 35% of the urea subsidy goes to intended beneficiaries- the small and marginal farmers. The Survey suggests taking the direct benefits transfer (DBT) route via JAM – Jan Dhan, Aadhaar and Mobile- and de-canalising imports of urea. Agricultural experts agree that this is a ‘fertile candidate for reform’.
- Agriculture in India intersects with almost every development agenda—be it human development, poverty elimination, rural development or environmental protection. Agricultural capacity has a direct impact on the food security situation in the country. It also helps in initiating and sustaining demand in other sectors. A progressive agriculture sector, thus, serves as a powerful engine of economic growth.
- The 12th five year plan growth target for agriculture sector had been set at 4%. The Gross Capital Formation in agriculture and allied sectors as percentage of total GDP has remained stagnant at less than 3%. Public spending on agriculture research, education, and extension is presently about 0.7% of agricultural GDP- much lower than the international norm of 2%. This raises concern that the inadequacies of the provision of the critical public goods for Agriculture may dampen the targeted growth.
- Enhanced public expenditure in agriculture- in form of increased investments, rather than un-targeted subsidies- is thus required to bring about technical change in agriculture, and higher agricultural growth. In addition, concerted reforms are needed to achieve equity in terms of higher growth in disadvantageous regions like rain-fed and tribal areas and benefit small and marginal farmers.
Some of the areas for policy intervention may include the following:-
1. Land market reforms are in need of a new impetus. As holdings are becoming fragmented and uneconomical, marginal farmers need flexibility in leasing out the land. There is perhaps a need to have a framework for operation of land markets but with sufficient safeguards to protect interest of small and marginal farmers.
2. Agricultural price policy has been facing challenges. The practice of announcing minimum support price based on variable costs before sowing season could be looked into. Similarly, procurement price based on total costs may be used to procure foodgrains needed for public distribution system (PDS) and for food security purpose.
- We need to consider a rational approach to pricing of agricultural inputs such as irrigation, power and fertilizer. However any such measure, while providing timely delivery of the required inputs, must ensure that the small and marginal farmers are not adversely affected.
Farm and food subsidies need to be rationalized and better targeted to benefit the poor and the needy. Direct cash transfers offer a possible mechanism. While ensuring transparency and preventing leakages is important, these subsidies are justified as they benefit not only producers but the society at large. Large subsidies continue to be provided by developed countries that has distorted the international food prices. OECD data shows that their members spent around $258 billion to subsidize agriculture in 2013. European Union spending on farm subsidies accounts up to $ 58 billion annually.
Although flow of agricultural credit has increased significantly in recent years, we need to address distributional aspects of agricultural credit including better access to small and marginal farmers, strengthening rural branches and reducing significant regional and inter-class inequalities in credit.
Conclusion :- More than 800 million of India’s 1.3 billion people live in rural areas. One quarter of this population lives below the official poverty line. The search for economic justice for a population of this magnitude cannot be addressed by relying on migration to the cities. Rural-urban migration and absorption of labour in the urban economy has been slow due to the slow growth of employment in manufacturing. The rural labour force will therefore have to find a way to improve their incomes in situ. Strengthening of agriculture, thus, becomes a national imperative.
12 important Bills of this Budget Session:-
|GST Bill||Gives concurrent taxation powers to the centre and states to levy a Goods and Services Tax, and creates a Goods and Services Tax Council.|
|Real Estate Bill||Regulates transactions between buyers and promoters of real estate projects and sets up state level Regulatory Authorities to monitor it|
|Lokpal Bill||Modifies the composition of the Selection Committee to include the leader of the single largest opposition party in the Lok Sabha, and the manner of declaration of assets of public servants.|
|Anti-Hijacking Bill||Replaces the Anti-Hijacking Act, 1982. Defines hijacking and awards death penalty for hijacking in certain cases, such as death of hostage or security personnel.|
|Whistle Blowers Protection (Amendment) Bill||Prohibits reporting of corruption related complaints that fall under 10 specified categories such as economic and scientific interests, cabinet proceedings and those within the ambit of the Official Secrets Act.|
|High Court & Supreme Court Judges Bill||Seeks to ensure uniformity in pensions and other conditions of service of Supreme Court and High Court judges.|
|Repealing and Amending Bill||Repeals 295 Acts which have ceased to be in force, and amends two Acts.|
|Appropriation Acts (Repeal) Bill||Seeks to repeal 758 Appropriation Acts.|
|Industries Amendment Bill||Excludes production of alcohol for potable purposes from the ambit of the Act.|
|Bureau of Indian Standards Bill||Replaces the Bureau of Indian Standards Act, 1986. Seeks to establish BIS as the national standards body and mandatory standardisation of products.|
|National Waterways Bill, 2015||Replaces the five existing national waterways laws. Identifies additional 101 waterways as national waterways.|
|Carriage by Air (Amendment) Bill||Allows the central government to revise liability limits of air carriers for compensation related to death, injury, and loss of baggage.|
The Antibiotic red line of control:-
India faces a twin challenge of overconsumption of antibiotics breeding drug-resistant bacteria while ensuring that the poor and vulnerable have easy access.
A much-needed public awareness campaign to highlight the dangers of misuse and irrational use of antibiotics was recently launched by the Ministry of Health and Family Welfare.
Called ‘Medicines with the Red Line’, it comes at a time when the consumption of antibiotics in India has increased sharply while the effectiveness of these drugs to treat bacterial infections has been steadily declining.
High disease burden, rising income, cheap, unregulated sales of antibiotics and poor public health infrastructure are some of the reasons for the sharp increase in antibiotic use. A report (August 2014) in the journal The Lancet Infectious Diseases, said that in 2010, India consumed 13 billion units of antibiotics, the highest in the world. Between 2005 and 2009, consumption shot up by 40 per cent.
A case of contradictions
And the impact of this unregulated usage is already showing. Between 2008 and 2013, E.coli bacteria resistant to third-generation cephalosporins increased from 70 to 83 per cent; it went up from 8 to 13 per cent in the case of carbapenems and 78 to 85 per cent in the case of fluoroquinolone, notes a paper published on March 3, 2016 in PLOS Medicine.
The consequences of increased prevalence of antimicrobial resistance are best illustrated in the case of neonatal sepsis. On average 57,000 neonates die each year in India, the highest in the world, due to sepsis infection that is resistant to first-line antibiotics; in 2012, India had the highest neonatal deaths (nearly 7,79,000).
The irony is that at the same time, the lack of access or delayed access to effective antibiotics is causing more deaths in India than from drug-resistant bacteria. This is best revealed in the case of pneumonia in children under five years of age. Most of the 1,70,000 pneumonia deaths that occurred in this age group in India in 2013 could have been averted had these children had access to effective antibiotics, notes a paper published on November 18, 2015 in the journal The Lancet. Only 12.5 per cent of affected children received antibiotic treatment for pneumonia.
One way to reduce the dependence on antibiotics, particularly in the case of pneumonia, is by increasing the coverage of immunisation, which is currently hovering around 72 per cent for DTP (diphtheria-tetanus-pertussis).
So like many other developing countries, India has to turn the spotlight on ensuring sustainable access even while maintaining sustainable effectiveness of all antibiotics. The only way to achieve this twin objective is by ensuring that all stakeholders — government, patients, veterinarians, doctors, pharmacists, pharmaceutical companies and health-care facilities — play their respective roles more responsibly.
First, people should be made aware that stopping antibiotics midway, missing doses, taking suboptimal dosages, or consuming antibiotics for cold and other viral infections, to name a few, makes them resistant to antibiotics; when ill the next time, their only recourse will be more expensive drugs or probably nothing at all. This is best exemplified in the case of multidrug-resistant tuberculosis that requires longer period of treatment using very toxic drugs that are more expensive.
- Khurja in UP is known for its beautiful pottery and famously tagged as Ceramic city of India
- The first evidence that Zika virus might be causing Guillain-Barré syndrome (GBS), a severe neurological disorder, has emerged from a retrospective study of 42 patients diagnosed with GBS during the Zika virus outbreak in French Polynesia.GBS is a disorder in which a person’s immune system attacks the peripheral nerves, and is the leading cause of non-trauma related paralysis. Symptoms develop rapidly and include weakness in the legs and arms, muscle weakness and pain. In about 20-30 per cent of cases, severe GBS can lead to respiratory failure, and about 5 per cent of patients die.
Alappuzha backwaters to get India’s first solar ferry.
40 rock paintings were recently discovered in the Kondane caves in Raigarh district in Maharashtra .The style and articulation of these paintings suggest that they have been drawn during the late historical period of second century B.C. onwards