25 February 2025 : Indian Express Editorial Analysis

1. Three low-hanging reforms

(Source – Indian Express, Section – The Editorial Page – Page No. – 10)

Analysis of the news:

The Role of Location in Wage Determination

• Historical evidence suggests that wages are influenced more by geographical factors than by individual capabilities.
• The economic prosperity of individuals largely depends on the country, state, city, and sector they operate in.
• While CMs face the challenging task of capacity-building through education, healthcare, and institutional reforms, these efforts take years to bear fruit.
• In contrast, legislative reforms to streamline the existing compliance maze can yield quicker and more impactful results by addressing irrational workflows and reducing uncertainty in legal interpretations.

Decriminalisation: Reducing the Fear of Punitive Regulations

• Decriminalisation is perhaps the most critical reform, with the potential to eliminate 80% of the 26,134 employer-related jail provisions in India.
• The Jan Vishwas Bill attempted this but had limited success, removing only 110 out of 5,239 provisions due to entrenched interests and bureaucratic inertia.
• The existing framework fails to distinguish between fraud, incompetence, and procedural errors, leading to unnecessary criminal inquiries.

CMs can adopt a “reversing the gaze” philosophy by retaining criminal provisions only when:

1. Physical harm to individuals occurs.
2. Intentional fraud is committed against stakeholders.
3. Societal externalities are significant and cannot be compensated, such as threats to national integrity.
4. Additionally, criminal provisions related to procedural lapses like filing delays or format errors should be scrapped.
5. Applying these criteria retroactively could eliminate about 40% of employer-related criminal provisions.
6. States like Madhya Pradesh and Tamil Nadu have taken initial steps, while Gujarat, Karnataka, and Odisha are considering similar projects.

Digitisation: Leveraging India’s Digital Public Infrastructure (DPI)

• Digitisation holds the key to streamlining 65% of India’s 69,233 employer compliances.
• India’s DPI has already transformed processes in areas like vaccine certification and digital payments.
• The recent introduction of PAN 2.0 and EntityLocker promises further progress by creating a tamper-proof repository for government-issued documents.

• CMs can expedite this transformation by implementing State Employer Compliance Grids (SECGs)—open architecture technology layers replicating DPI principles.
• SECGs would facilitate the paperless, presence-less, and cashless filing of returns, licenses, and permissions.
• They would also enable real-time compliance monitoring by extracting distributed data currently locked in silos.
• Gujarat, Maharashtra, and Andhra Pradesh are considering SECGs, which could be operational within 180 days, drastically simplifying compliance procedures.

Rationalisation: Reforming the Bureaucratic Framework

• India’s civil service, envisioned as a “steel frame” by Sardar Patel, risks becoming a “steel cage” due to bureaucratic overreach.
• The current governance model is cluttered, with states like Uttar Pradesh having up to 72 government departments.
• In contrast, Japan, the UK, and the US operate efficiently with far fewer cabinet members.

• Rationalisation calls for streamlining state government structures to promote accountability and growth.
• Excessive bureaucracy results in a regulatory environment where actions are prohibited unless explicitly permitted, and individuals are presumed guilty until proven innocent.
• Simplifying governance frameworks will foster an environment conducive to entrepreneurship and high-wage employment.

Localised Labour Market Reforms and Economic Growth

• Expert’s observation that economic systems are influenced by societal and political contexts underscores the need for localised labour market reforms.
• Prime Minister Modi’s assertion that state CMs matter more than the central government in shaping labour markets aligns with this view.
• Local conditions significantly impact entrepreneurs, and therefore, state-specific policies are essential for addressing employment challenges.

India faces the problem of “employed poverty,” characterized by:

• Over-reliance on agriculture.
• Excessive self-employment.
• A scarcity of medium-sized cities and megacities.
• Inadequate factory-based employment and non-farm employers capable of offering higher wages.

Conclusion:

• Nobel laureate Daniel Kahneman’s advice—“We instinctively step on the accelerator to go faster, but get better results by taking our foot off the brake”—aptly applies to India’s employment reforms.
• Instead of aggressive interventions, state governments should focus on removing existing barriers.
• By prioritising decriminalisation, digitisation, and rationalisation, CMs can foster an environment that supports high-wage employment, reduces compliance burdens, and accelerates economic growth.

2. From Bihar to the world

(Source – Indian Express, Section – The Ideas Page – Page No. – 11)

Analysis of the news:

The Rising Significance of Bihar’s Makhanas

• Makhanas, also known as fox nuts, hold a unique position in Bihar’s agricultural landscape, accounting for 85% of the world’s production.
• Over the past decade, there has been a notable shift in its cultivation from traditional pond-based systems to more efficient field-based farming.
• This transformation has expanded the cultivation area to over 35,000 hectares and doubled production to more than 56,000 tonnes.
• The announcement of the Makhana Board in the Union Budget 2025-26 marks a turning point, offering prospects for enhanced farmer incomes, global brand recognition, and increased contributions to Bihar’s GDP.

Cultural and Commercial Importance of Makhanas

• Makhanas are deeply embedded in Bihar’s cultural and social fabric, commonly featured in rituals and festivals.
• Their emerging status as a health superfood underscores their commercial potential.
• Despite this, the sector has faced challenges due to inadequate food processing technology and limited market access, leading to the sale of raw makhanas at low prices.
• The establishment of the Makhana Board aims to address these issues by unlocking the crop’s true economic potential.

Key Focus Areas of the Makhana Board

The vision of the Makhana Board centers around three critical pillars: production, processing, and marketing.

1. Enhancing Production

• Through targeted research and development, the Board will introduce high-yielding makhana varieties and train farmers in modern cultivation techniques.
• Bihar’s subsidy schemes have already incentivised farmers, but further adoption of efficient practices is essential to minimise labour and increase yields per hectare.
• By facilitating access to modern equipment and tools, the Board aims to bridge the gap between traditional labour-intensive methods and modern farming techniques.

2. Boosting Processing Capabilities

• Processing is a vital link in enhancing the commercial value of makhanas. The National Institute of Food Technology being set up in Bihar will provide a significant boost to processing activities.
• Additionally, the Geographical Indication (GI) tag for Mithila Makhana ensures authenticity and quality, enhancing its appeal to international buyers.
• These initiatives will enable Bihar to tap into the growing global demand for healthy snacks.

3. Strengthening Marketing and Exports

• The creation of the Makhana Board is also pivotal for marketing Bihar’s makhanas both domestically and internationally.
• Chief Minister Nitish Kumar’s vision of “every plate in the world having a Bihari dish” is closer to realization.
• With improved export infrastructure, including Darbhanga and Purnea airports and Patna’s upcoming greenfield airport, Bihar is well-positioned to access markets in the US, Europe, and the Middle East.

The Role of Farmer Producer Organisations (FPOs)

• Farmer Producer Organisations (FPOs) are central to empowering small farmers by facilitating collective problem-solving, resource access, and economies of scale.
• Bihar has already established over 1,000 FPOs, with contributions from central and state schemes, NABARD, and the Bihar Rural Livelihoods Promotion Society.
• These FPOs enhance farmers’ bargaining power, reduce dependency on intermediaries, and promote knowledge sharing, ultimately increasing farmers’ incomes and boosting the makhana sector’s competitiveness.

Economic Growth and Employment Prospects

• The Bihar government’s agriculture department has ambitious plans to expand the makhana cultivation area to 70,000 hectares by 2035, potentially doubling seed production in the next three years.
• The production of popped makhanas is projected to rise from 23,000 MT to 78,000 MT, and the sector’s value at the farmer level is expected to grow from Rs 550 crore to Rs 3,900 crore.
• Market value for popped makhanas is anticipated to surge from Rs 2,000 crore to Rs 13,260 crore in the next decade, reflecting a rise in both domestic and international demand.
• Additionally, employment opportunities will see significant growth, with farm-level engagement projected to increase from 20,000 to 50,000 families by 2035.
• Post-production value chain employment is expected to rise from 5,00,000 to 7,00,000 individuals, further strengthening Bihar’s rural economy.

Export Infrastructure and Global Opportunities

• Robust export infrastructure is key to unlocking the full potential of Bihar’s makhana industry.
• The development of new airports, such as Darbhanga, Purnea, and the greenfield airport in Patna, will facilitate efficient cargo handling, improving export prospects.
• Prime Minister Narendra Modi’s statement, “Bihar’s makhana is about to reach the world,” reflects the central government’s commitment to promoting Bihar’s makhanas in international markets.
• This expansion is crucial for positioning Bihar as a global hub for healthy snacks like makhanas.

Conclusion:

• The establishment of the Makhana Board is a transformative step for Bihar’s makhana sector, poised to elevate it from a traditional agricultural activity to a modern, export-oriented, and profitable industry.
• By focusing on production, processing, and marketing, the Board will empower farmers, create employment opportunities, boost exports, and significantly contribute to Bihar’s economic growth.
• With the collective efforts of the government, private sector, and farmers, Bihar’s makhana industry is on track to achieve sustainable growth and establish a prominent place in global markets for generations to come.

Check out 24 February 2025 : Indian Express Editorial Analysis