Indian Express Editorial Summary

Editorial Topic : Opening up the field

 GS-3 Mains Exam : Economy

Revision Notes

 

Context:

• Diversifying Agriculture: Focus on helping Haryana and Punjab transition from water-intensive paddy cultivation to less water-guzzling crops.

New Initiatives and Limitations:

• Incentive Scheme:
  • Centre and Punjab government initiated a scheme offering Rs 17,500 per hectare to encourage farmers to shift away from paddy during the kharif season.
  • Scheme covers up to five hectares per beneficiary, funded 60:40 by the Centre and Punjab government.
  • Haryana has a similar scheme, but with limited success due to the profitability gap between paddy and substitute crops (pulses, oilseeds, millets, maize).
  • Limitation: Rs 17,500/ha incentive is insufficient to close the profitability gap between paddy and alternative crops.

Re-orient Subsidy Policy:

• Current Subsidy:
  • Paddy farmers in Punjab received Rs 38,973/ha in 2023-24 as subsidies (power, canal water, and fertiliser).
  • This makes paddy more profitable than competing crops.
• Suggested Increase:
  • To make a shift away from paddy attractive, the incentive should be doubled to Rs 35,000/ha.
  • This increase would be offset by savings in power and fertiliser subsidies, making it budget-neutral for the government.
• Need for Policy Shift:
  • A re-oriented subsidy policy is required to create a more crop-neutral incentive structure, reducing paddy’s dominance.

Procurement Policy:

• Current Situation:
  • Punjab and Haryana assure procurement of paddy through state agencies for the Food Corporation of India (FCI).
  • No such guarantee exists for other crops like pulses or oilseeds.
• Proposed Changes:
  • NAFED should ensure effective procurement of pulses and oilseeds at Minimum Support Price (MSP) to minimize market risk for farmers.
  • Procurement of alternative crops at MSP would provide a reliable market and is not expected to incur additional costs for the government.

Benefits of Diversifying Away from Paddy:

• Soil and Water Conservation:
  • Reduces soil degradation and groundwater depletion.
  • Paddy requires 20-25 irrigations compared to less than four for pulses, oilseeds, and millets.
• Reduction in Greenhouse Gas (GHG) Emissions:
  • Paddy cultivation emits 5 tonnes of CO2 equivalent per hectare.
  • Reducing paddy cultivation would also decrease pollution from rice stubble burning.
• Crop Biodiversity:
  • Promotes biodiversity, making agriculture more resilient and sustainable.

Other Benefits and Way Forward:

• Carbon Credits:
  • Diversification could earn farmers up to 4 carbon credits per hectare, opening opportunities for developing carbon markets in India.
• Cluster-Based Approach:
  • Prioritize high-value horticulture crops with a market-oriented cluster-based approach.
  • Engage Farmer Producer Organisations in aggregating, assaying, grading, packaging, and branding for export markets.
  • Develop logistics facilities with a value chain approach targeting high-income export markets.

Cooperative Federalism:

• Collaborative Effort:
  • Successful implementation requires cooperation between the Centre and the governments of Punjab and Haryana.
  • By working together, the potential benefits of agricultural diversification can be fully realized.

 

 

Indian Express Editorial Summary

Editorial Topic : India’s GDP Growth: Slow but Steady

 GS-3 Mains Exam : Economy

Revision Notes

 

Current Status:

• Indian economy grew at a five-quarter low of 6.7% in April-June 2024.
• Growth is lower than RBI’s expectation of 7.1%.

Reasons for Reduced Growth:

• Subdued government spending.
• Sluggish growth of agriculture (2%) due to heatwaves and parts of the services economy.

Manufacturing and Service Sector:

• Manufacturing grew at 7%, down from 8.9% in the previous quarter.
• Construction sector continues to show strong momentum.
• Financial, real estate, and professional services grew faster than trade, hotels, transport, and communication.

Expenditure Side:

• Private consumption picked up, growing at 7.4%.
• Consumer durables grew at 10.4%, while non-durables declined.
• Investment activity grew by 7.5%.

Prediction for Coming Quarters:

• Segments may bounce back, boosting the broader economy.
• Good monsoon will spur agriculture, benefiting rural consumption.
• Pick-up in government spending will provide a boost.

Conclusion:

• India’s GDP growth dipped in the first quarter.
• Agriculture and government spending are likely to pick up.
• Central government capital expenditure declined by 35%.
• Overall government spending was subdued due to general elections.