Print Friendly, Pdf &Amp; Email

Indian Express Editorial Analysis

4-March-2024

1. A fair deal for farmers

Topic: GS2 – Governance – Government policies – Interventions for development in various sectors
GS3 – Agriculture – MSP
This topic is relevant for both Prelims and Mains in the context of understanding the economic policies surrounding agriculture, including MSP, MGNREGA, and their implications.
Context:
  • The protesting farmers have presented a list of demands, two of which have significant economic implications: the legalization and increase of the Minimum Support Price (MSP) and the assurance of minimum 200 days of employment under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA).
  • This analysis delves into the economic consequences of these demands, should the government consider them.
Implications of Increased MSP:
  • If the government accepts the proposed formula of Cost C2+50 percent for determining MSP, calculations suggest an average increase of 25 percent in MSP levels for 23 crops over the 2023-24 rates.
  • While specific crops will experience varied MSP increases, such as safflower witnessing a 40 percent rise and sugarcane only 3 percent, these adjustments may prompt shifts in cropping patterns.
  • Notably, wheat and sugarcane could witness a decrease in cultivation area, while surplus production of paddy may escalate, potentially necessitating higher MSP hikes for wheat and sugarcane beyond the proposed formula.
  • Additionally, price escalations in essential feed materials like soybean and maize could inflate livestock and fishery product costs, contributing to heightened food inflation.
  • The legal and stable MSPs for 23 crops might attract horticulture producers, potentially leading to shortages in fruits and vegetables, further exacerbating inflation in this sector.
Challenges of Legalizing MSP:
  • Legalizing MSPs poses challenges, particularly for crops like rice, which could experience a 31 percent MSP increase under the new formula.
  • This surge may render rice exports unviable, leading to domestic supply surpluses.
  • Consequently, paddy could substitute other crops, causing a glut in the domestic market.
  • The government’s ability to manage excess supplies and the fiscal implications of deficiency payments remain uncertain.
Limited Impact of MSP Segment:
  • Despite the significance of MSPs for 23 crops, they constitute less than 28 percent of agricultural output.
  • The majority of agricultural produce faces market prices, with segments such as poultry, eggs, fisheries, and horticulture demonstrating robust growth rates without extensive government intervention.
Implications of MGNREGA Demand:
  • The farmers’ demand for a minimum of 200 days of employment under MGNREGA at a wage rate of Rs700 per day presents a substantial fiscal burden for the government.
  • The estimated budgeted amount for this demand exceeds Rs10.4 lakh crore, posing challenges for a central budget of around Rs47 lakh crore.
Policy Recommendations:
  • To address farmers’ grievances and ensure fair pricing for their produce, policy changes are necessary.
  • These include removing export controls and stocking limits on traders, as well as halting the unloading of rice and wheat below economic costs.
  • Additionally, the government should enhance futures markets, options, and warehouse receipt systems while encouraging Farmer Producer Organizations (FPOs) to participate in organized value chains on digital platforms.
  • Government intervention should occur only in cases of sudden price crashes, utilizing stabilizing funds as a last resort.
Conclusion:
  • The demands put forth by protesting farmers carry significant economic implications.
  • While sympathizing with their plight, it’s crucial to acknowledge the feasibility challenges these demands pose to the government’s budget and broader economic stability.
  • Addressing farmers’ concerns requires a balanced approach, focusing on market reforms, and prudent fiscal management.
  • Rational discussions on these issues are imperative post-elections to chart a sustainable path forward.
What is the Minimum Support Price (MSP)?
About:
  • The MSP is a guaranteed price for their produce from the Government.
  • MSP is a form of market intervention by the Government of India to insure agricultural producers against any sharp fall in farm prices.
  • MSP in India is a price floor set by the government to ensure that farmers receive a minimum price for their agricultural produce, thereby safeguarding their income and encouraging agricultural production
Crops Under MSP:
  • The government announces MSPs for 22 mandated crops and Fair and Remunerative Prices (FRP) for sugarcane. The mandated crops are 14 crops of the kharif season, 6 rabi crops and two other commercial crops.
The list of crops is as follows:
  • Cereals (7): Paddy, wheat, barley, jowar, bajra, maize and ragi
  • Pulses (5): Gram, arhar/tur, moong, urad and lentil
  • Oilseeds (8): Groundnut, rapeseed/mustard, toria, soyabean, sunflower seed, sesamum, safflower seed and nigerseed
  • Raw Cotton
  • Raw Jute
  • Copra
  • De-husked Coconut
  • Sugarcane (FRP)
  • Virginia flu-cured (VFC) Tobacco
  • Presently, MSPs are notified for 23 crops, but procurement is done for wheat and paddy, which meets the requirements of the public distribution system.
PYQ: Consider the following statements: (2020) 1) In the case of all cereals, pulses and oil-seeds, the procurement at Minimum Support Price (MSP) is unlimited in any State/UT of India. 2) In the case of cereals and pulses, the MSP is fixed in any State/UT at a level to which the market price will never rise. Which of the statements given above is/are correct? (a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2 Ans: D
Practice Question:  Discuss the economic implications of the demands put forward by protesting farmers, focusing on the proposed increase in Minimum Support Price (MSP) and the extension of benefits under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). Analyze the potential challenges and benefits associated with these demands, and suggest policy measures to address the concerns of farmers while ensuring fiscal prudence and sustainable economic growth. (250 words/15 m)

2. Going places by train

Topic: GS2 – International Relations – India and its neighbourhood
This topic is relevant for both Prelims and Mains in the context of understanding the significance of railway projects in fostering economic growth and regional cooperation.
Context:
  • Sustainable development, characterized by non-linear, design-thinking activities, emphasizes movement and progress at its core.
  • The growth of countries is intricately linked to the development of clusters of countries and regions, fostering economic interdependence and leveraging comparative advantages.
  • Regional progress hinges upon shared visions for the future, a climate of strategic friendship, and robust transport connectivity, particularly evident in regions like the tactical growth quadrangle of Bangladesh, Bhutan, India, and Nepal (BBIN).
Railway Connectivity as a Catalyst for Economic Development:
  • Railway connectivity plays a pivotal role in the economic development of the BBIN region, offering promising opportunities for collective growth.
  • The BBIN initiative stands out due to its emphasis on regional connectivity and the potential to significantly reduce transportation costs as a percentage of GDP, thereby boosting overall development.
  • Specific examples, such as rerouting freight trains and providing landlocked countries like Nepal and Bhutan access to ports via railways, highlight the transformative impact of enhanced connectivity on regional economies.
Bilateral Commitments and Practical Implementation:
  • The success of the BBIN initiative rests on strong bilateral commitments and the practical implementation of shared infrastructure plans.
  • Notably, the initiative has progressed from mere conceptualization to tangible infrastructure projects on the ground, underscoring its ambitious yet practical nature.
  • Key to its success is the establishment of a seamless broad/dual gauge rail network connecting the region, alongside time-bound completion of infrastructure projects and non-physical/institutional frameworks.
Current Projects and Future Prospects:
  • Existing and planned railway projects between India, Bangladesh, Bhutan, and Nepal demonstrate significant progress towards enhancing regional connectivity.
  • Specific initiatives such as the Tongi-Akhaura line dual gauging and the Agartala-Akhaura rail link inauguration illustrate the tangible steps taken towards realizing the BBIN vision.
  • Furthermore, ongoing survey projects and cross-border rail links signify the region’s commitment to fostering deeper economic integration through railway connectivity.
Challenges and the Way Forward:
  • While physical infrastructure development is crucial, institutional arrangements and cross-border operating protocols are equally essential to ensure seamless railway connectivity in the BBIN region.
  • The need for umbrella regional agreements, standardized operating procedures, and regulatory frameworks underscores the complexity of cross-border projects.
  • However, addressing these challenges is imperative for realizing the full potential of railway connectivity in driving regional growth and strategic cooperation.
Conclusion: Railway Connectivity as a Pathway for Regional Growth:
  • Railway connectivity serves as a vital catalyst for economic development in the BBIN region, facilitating enhanced trade, mobility, and cooperation among member countries.
  • While significant progress has been made, addressing institutional challenges and fostering deeper regional cooperation are essential for unlocking the full potential of railway connectivity in driving sustainable development and prosperity across the BBIN quadrangle.
About Bangladesh-Bhutan-India-Nepal (BBIN) initiative
  • In June 2015, Bangladesh, Bhutan, India, and Nepal (BBIN) signed a framework MVA to facilitate cross-border movement of passenger and cargo vehicles across the four nations.
  • For its admission to take effect, Bhutan must ratify the agreement first.
  • However, Bhutan had agreed to allow the three other nations—Bangladesh, India, and Nepal—that have previously ratified the BBIN MVA to come into effect.
About BBIN MVA: What is it?
  • On June 15, 2015, in Thimphu, Bhutan, the Transport Ministers of the BBIN countries signed the historic MVA. Under the terms and circumstances of the agreement, member nations would permit vehicles registered in other nations to access their borders. The individual nations will choose the customs and tariffs, and these decisions will be completed in bilateral and trilateral forums.
Objective:
  • Facilitating cross-border movement of people and things is the agreement’s primary goal, which will improve economic engagement and enable smooth people-to-people communication.
Benefits:
  • It would let cars carrying passengers and goods to travel freely across the four nations.
  • The custom of changing cargo vehicles at the border which has been in place up until now is no longer required.
  • The BBIN agreement will assist each nation in establishing an institutional framework for regional integration and will further promote safe, cost-effective, and ecologically responsible road transport throughout the sub-region.
Assistance from ADB:
  • ADB has been supporting the BBIN MVA initiative financially, technically, and with advice as part of its support for the South Asia Subregional Economic Cooperation (SASEC) programme.
  • SASEC is a project-based economic cooperation initiative that unites the BBIN countries, the Maldives, Sri Lanka, and, more recently, Myanmar.
  • The SASEC secretariat is called ADB.
PYQ: In the Mekong-Ganga Cooperation, an initiative of six countries, which of the following is/are not a participant/ participants? (2015) 1) Bangladesh 2) Cambodia 3) China 4) Myanmar 5) Thailand Select the correct answer using the code given below: (a) 1 only (b) 2, 3 and 4 (c) 1 and 3 (d) 1, 2 and 5 Ans: (c)
Practice Question:  Discuss the significance of railway connectivity projects in the BBIN (Bangladesh, Bhutan, India, Nepal) region for fostering regional cooperation, economic development, and strategic partnerships. Suggest measures to address the challenges and maximize the benefits of enhanced railway connectivity in the BBIN region. (250 words/15 m)

For Enquiry

Search By Categories
22 April 2024 : Daily Answer Writing
Mains Answer Writing 22-April-2024 Q1) The Green Revolution, with its focus on land productivity, created...
22 April 2024 : The Hindu Editorial Notes PDF
The Hindu EDITORIAL 22-April-2024 1. Preparing India for water stress, climate resilience Topic:...
22 April 2024 : Daily Current Affairs
Daily Current Affairs 22-April -2024- Top News of the Day 1. Global Coral Bleaching Crisis: Urgent Action...
22 April 2024 : PIB Summary for UPSC Copy
PIB Summary for UPSC 22-April-2024 1. PM inaugurates 2550th Bhagwan Mahaveer Nirvan Mahotsav on occasion...
22 April 2024 : Indian Express Editorial Analysis
Indian Express Editorial Analysis 22-April-2024 1. Cures, care, competition Topic: GS2 – Governance...
20 April 2024 : Daily Answer Writing
Mains Answer Writing 20-April-2024 Q1) Assess the present computational methodology for Gross Domestic...
20 April 2024 : Daily Current Affairs
Daily Current Affairs 20-April -2024- Top News of the Day 1. Israeli Military Strikes Iran in Apparent...
20 April 2024 : PIB Summary for UPSC
PIB Summary for UPSC 20-April-2024 1. High turnout in Phase 1 of Lok Sabha Elections 2024 despite heat...

© Copyright  99Notes.in  All Rights Reserved

Address

Head Office :- Office No-2 & 3 ,LGF,Apsara Arcade,Adjacent Karol bagh Metro,Old Rajinder Nagar ,New Delhi-110060

2nd Office:- Metro station, 2nd floor, 5B, Pusa Rd, opp. to Metro Pillar no. 110, near Karol Bagh, Block B, Karol Bagh, New Delhi, Delhi 110005

Call us : 9654638994

CTA