IASbaba's Daily Current Affairs Analysis

IAS UPSC Prelims and Mains Exam – 02nd February 2019

(MAINS FOCUS)

WELFARE/ECONOMY

TOPIC: General studies 2

Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

Welfare schemes for vulnerable sections of the population by the Centre and States and the performance of these schemes; mechanisms, laws, institutions and bodies constituted for the protection and betterment of these vulnerable sections

General studies 3

Issues related to direct and indirect farm subsidies and minimum support prices

Inclusive growth and issues arising from it.

Tackling Farm Distress: Make farming profitable

Six steps to tackle farm distress and make farming profitable –

1. Understanding the difference between farm distress and alleviating poverty

About 70% of farmers cultivate less than 1 hectare and have a farm income less than ₹9,000 per month.
This group is definitely poor and deserves to benefit from any basic income transfer scheme that might be introduced.
Remaining 30% of farmers account for about 75% of agricultural production and an even larger proportion of marketed surplus.
This category is not poor, but they are distressed because they find farming is not as profitable as it should be.

Therefore, policy makers should focus on making farming more profitable so that it can attract farmers to invest more in farming. This will generate higher levels of income.

Prosperous farms in turn will raise agricultural wage rates and also demand for non-agricultural products. It will also increase rural employment.

2. Increasing agricultural productivity

Water is the most important input for higher productivity, especially in the 60% of area that is rain-fed.
State governments focus far too much on large irrigation schemes, which absorb a great deal of resources, and benefit only a small portion of the land.
It would be much more cost-effective to shift to less capital-intensive minor irrigation and water conservation projects.
MGNREGA should focus on minor irrigation, water conservation and water harvesting projects.
Steps should be taken to protect agricultural production from the effects of climate change.
Carefully designed long-term programme and a separate climate change adaptation programme for each district will help.

3. Better technology

Improved seeds, increased role of ICAR and state agricultural universities in this area.
Make research more result-oriented.
Allow scientific testing of new GM technology and farmers should be provided access to genetically modified (GM) technology.
Create apps that enable farmers to get high-quality advice.
This is an area where innovative public-private partnerships could also be encouraged.

4. Marketing increased production

Getting remunerative prices is obviously critical for profitability.
Effective minimum support prices (MSPs) and procurement system.
The cost reported by the Commission on Agricultural Costs and Prices (CACP) should take into account world price trends.
The states should replace their exiting Agricultural Produce Market Committee Acts with a new modern law that will encourage private markets in competition with mandis.
The centre should abolish the Essential Commodities Act, which prevents the emergence of large private traders, as the ability to impose stock limits under the Act creates huge uncertainty, ruling out private investment.

5. Foreign trade policies

Export-import policies must be made pro-farmer so that they are able to get the full benefits of higher prices abroad.
Farmers should be protected from any sudden collapse in world prices by an appropriate adjustment in duties.
Government should anticipate world price developments and should be extremely fast in responding.

6. Income transfers

Income transfer scheme can get to the poor efficiently and does not disrupt fiscal prudence.
The Rythu Bandhu scheme of Telangana and the Krushak Assistance for Livelihood and Income Augmentation scheme of Odisha are both income transfer schemes.
They are not linked to investment in the farm in any way.
Rhythu Bandhu is also tilted towards rich landowners.
Government focus should be more on increasing farm profitability.

Connecting the words:

Agrarian distress has become a serious challenge for the economy and has grave socio-political repercussions. Discuss what steps are needed to tackle farm distress and make farming profitable.

WELFARE/ECONOMY

TOPIC: General studies 2

Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

Welfare schemes for vulnerable sections of the population by the Centre and States and the performance of these schemes; mechanisms, laws, institutions and bodies constituted for the protection and betterment of these vulnerable sections

General studies 3

Issues related to direct and indirect farm subsidies and minimum support prices

Inclusive growth and issues arising from it.

PM- KISAN: The return of targeted cash transfers

Introduction:

Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) scheme was announced during the interim budget 2019-20.

The scheme aims to provide an assured income support to the small and marginal farmers.
Under this programme, vulnerable landholding farmer families, having cultivable land upto 2 hectares, will be provided direct income support at the rate of 6,000 per year.
This income support will be transferred directly into the bank accounts of beneficiary farmers, in three equal instalments of Rs. 2,000 each.
This programme will be funded by Government of India.
Around 12 crore small and marginal farmer families are expected to benefit from this.
PM-KISAN is expected to pave the way for the farmers to earn and live a respectable living.

Therefore the proposals in the Indian context have mostly been for a targeted income transfer scheme and not UBI. (No Universality)

In developed countries, the UBI is supposed to supplement existing social security provisions and a top-up over and above universal provision of health, education and so on.

Concerns:

In the Indian context, most arguments in favour of UBI are premised on the inefficiencies of existing social security interventions and seek to replace some of these with direct cash transfers.
However, universalisation is the key to efficient delivery of services against targeting proposed by these cash transfer schemes.
Also there is obsession with cash transfers as it is assumed that it will take care of all problems. A silver bullet for agrarian crisis to malnutrition to educational deficit and also a solution for the job crisis.
The real issue with the approach of a targeted cash transfer scheme is that it envisions the role of the state to only providing cash income to the poor.

Conclusion:

This kind of ‘Robin Hood approach’ seeks to absolve the state of its responsibility in providing basic services such as health, education, nutrition and livelihood. It seeks to create demand for services without supplying the services, leaving the poor to depend on private service providers.

Privatisation of basic services such as health and education leads to large scale exclusion of the poor and marginalised.

The best antidote to poverty is enabling citizens to earn their living by providing jobs. MGNREGA should be strengthened to enable them to earn decent incomes.

Similarly, the crisis in agriculture is unlikely to be resolved by income transfers. (As discussed in above editorial)