IASbaba's Daily Current Affairs Analysis

IAS UPSC Prelims and Mains Exam – 23rd May 2019

(MAINS FOCUS)

NATIONAL

TOPIC: General studies 2 and 3

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

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

Inclusive growth and issues arising from it.

Shanta Kumar Committee Report: Analysis

Background:

A High-Level Committee (HLC) was appointed and chaired by former food minister Shanta Kumar, on restructuring of the FCI in August 2014. The HLC, in its report submitted its recommendations in January 2015.

On re-structuring of FCI:

The FCI hand over all procurement operations of wheat, paddy and rice to states (Andhra Pradesh, Chhattisgarh, Haryana, Madhya Pradesh, Odisha and Punjab) that have gained sufficient experience in this regard and have created reasonable infrastructure for procurement.
The FCI should accept only the surplus grain (after deducting the needs of the states under the National Food Security Act—NFSA) from these state governments (not millers) to be moved to deficit states.
The corporation FCI should move on to help those states where farmers suffer from distress sales at prices much below Minimum Support Price (MSP), and which are dominated by small holdings, like eastern Uttar Pradesh, Bihar, West Bengal, Assam, etc.

Implementation:

After more than four years, restructuring of the FCI remains a dream, and the corporation continues to depend on the same set of states for procurement of grains and procurement operations have not been revamped in eastern states.

On PDS reform:

The government should relook at the coverage (67% of the population) under the NFSA as it’s on the ‘higher’ side.
Computerisation of the PDS process for checking the pilferage of PDS grains.
Gradual introduction of cash transfers in the PDS, starting with large cities with more than 1 million population; extending it to grain-surplus states, and then giving an option to deficit states to opt for cash or physical grain distribution.

Implementation:

According to the official data, all the existing 23 crore ration cards have been digitised and most of the cards have been seeded with Aadhaar numbers and 2.75 crore ration cards have been deleted during 2013-17.
Food ministry officials have often stated that deletion of ration cards has ensured better targeting of beneficiaries.
The offtake of foodgrains by the states under the PDS after deletion (bogus) and digitisation of ration cards has not declined in the last five years.
Rising food subsidy dues & loans:
The total outstanding dues to the FCI stand at `1.85 lakh crore as on March 31, 2019, because of the mismatch between budget allocated to the corporation and the actual expenses incurred.
The actual expenditure towards food subsidy has been rising because of two factors—the annual rise in MSP for paddy and wheat given to farmers for procurement, and ‘open ended’ purchase operations leading to excess grains stocks held by the FCI.
On cash transfer to PDS beneficiaries, the progress has been minimal. Only Chandigarh, Puducherry and parts of the Union Territory of Dadra and Nagar Haveli have opted for cash transfer in the PDS.

Rising food subsidy bill:

Reluctance to increase the price of highly subsidised foodgrains supplied under the NFSA, 2013. Under the Act, the price of Rs 3/2/1 for rice, wheat and coarse grains, was capped for three years, which ended in 2016.
Each rupee (per kg) increase issue price of grains could result in savings of food subsidy of over Rs 5,000 crore annually.
FCI’s economic cost (procurement, distribution and storage of holding foodgrains) has been rising sharply, contributing to rising food subsidy expenses.

Conclusion:

The NFSA—which has the objective of providing for food and nutritional security by ensuring access to adequate quantity of quality food at affordable prices to the people to live a life with dignity—is gradually turning out to be huge financial burden on the central government. The mounting burden of the food subsidy budget is compounded by huge surplus grains, and this has put enormous pressure on the central government’s finances.

Steps to tackle the issues should be taken on an immediate basis.

Connecting the dots:

The Shanta Kumar Committee submitted its report in 2014. Analyse how far the recommendations given by the committee were implemented.

INTERNATIONAL

TOPIC: General studies 2

India and the World

International Relations

Policies of developed and developing countries and their impact on India’s interests

Revitalizing IBSA

Introduction:

Foreign minister of India and South Africa and Brazil recently met in Kochi, India. The central goal was to develop a blueprint to rejuvenate IBSA, widely viewed as a unique voice for the Global South.

Rise, fall and rise:

Origin:

The idea of creating a grouping composed of major democracies of three continents, Asia, Africa and South America, emerged from the disarray at the end of the 20th century, and the perceived need for developing countries to forge decisive leadership.
IBSA was launched through the Brasilia Declaration in 2003. Its summits, between 2006 and 2011, gave it a special global profile.

BRICS overshadowing IBSA:

2011 onwards, BRICS, the larger group comprising IBSA countries, China and Russia, started to overshadow IBSA.

A new momentum:

A series of events marking its 15th anniversary, held during 2018-19, have imparted new momentum to the endeavour to revitalise IBSA.

Recent successes:

The three Foreign Ministers have been meeting regularly to provide a coordinated leadership to the grouping.
While the India, Brazil and South Africa Facility for Poverty and Hunger Alleviation (IBSA Fund) is small in monetary terms, it has succeeded in implementing 31 development projects in diverse countries: Burundi, Guinea-Bissau, State of Palestine, Cambodia and Vietnam, among others.
India has been running an innovative IBSA Visiting Fellows Programme through the Delhi-based think tank, RIS or Research and Information System for Developing Countries.
A strong case exists for expanding its reach. Both South Africa and Brazil should initiate their own editions of this programme, as an investment in building intellectual capital.

Importance of IBSA:

IBSA is the true inheritor of solidarity among developing countries, which was nurtured from the Bandung Conference (1955) through UNCTAD and G-77 to the BAPA+40 Declaration (2018).
It is the champion of South-South Cooperation, and the advocate of a coordinated response by developing economies to secure the Sustainable Development Goals (SDGs).
The glue that binds IBSA countries together is their faith in democracy, diversity, plurality, inclusivity, human rights and rule of law.
Notably IBSA remains determined to “step up advocacy for reforms of global governance institutions in multilateral fora”. In particular, it is strongly committed to the expansion of the UN Security Council.

Kochi Session:

The IBSA Academic Forum, comprising independent experts, held its sixth session in Kochi after a hiatus of over seven years.
This forum hosted a comprehensive exchange of views on the continuing relevance of IBSA; the need for a strategy to secure SDGs and cement South-South Cooperation; expanding trade cooperation; and the shared goal of enhancing academic collaboration on issues relating directly to the needs of democratic societies.

Conclusion:

The idea of IBSA remains valid. The special responsibilities it bears cannot be discharged by BRICS. In fact, strengthening IBSA could increase the effectiveness of BRICS and encourage it to follow a more balanced approach on key issues of interest to India, Brazil and South Africa.

The current endeavors to infuse greater dynamism in IBSA are well-timed. Support by the leaders will be crucial.