Introduction

The Indian economy remained resilient with a robust 7.6% growth rate of GDP in FY 2023-24, positioning itself among the fastest-growing major economies.

• However, this economic success has not translated proportionally into human development gains, as evident from India’s low ranking in the Human Development Index (HDI) 2023-24 i.e, 134th out of 193 countries in 2022.

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Reasons for the Disconnect Between GDP Growth and Human Development

• Unequal Distribution of Wealth and Regional Imbalances
  • Wealth Concentration: According to Oxfam’s 2023 report, just 5% of Indians own more than 60 per cent of the country’s wealth, creating vast income disparities that prevent equitable access to health and education.
  • Urban-Rural Divide: While urban areas witness better access to services, rural areas remain under-resourced, lacking basic healthcare, sanitation, and education infrastructure.
• Inadequate Health Infrastructure
  • Low Health Expenditure: India’s public health expenditure remains at around 2.1% of GDP (Economic Survey 2023-24), leading to insufficient healthcare services and high out-of-pocket expenditure.
  • Poor Health Outcomes: The National Family Health Survey-5 (NFHS-5) indicates high levels of malnutrition and child stunting (35.5%), revealing the need for more targeted health programs.
• Educational Disparities and Quality Concerns
  • Access and Quality Gap: Though primary school enrollment is high, there are significant gaps in learning outcomes.
    • The ASER 2022 report highlights a significant decline in children’s reading skills, with only 42.8% of fifth graders able to read Class 2-level text,
  • Skill Mismatch: Only 51.25% of India’s graduates are employable, with significant challenges in vocational training and skilling (Economic Survey 2023-24).
• Limited Social Security and Employment Opportunities
  • Employment Issues: High GDP growth has not translated into adequate job creation.
    • Unemployment rates, particularly among youth, reached 8.11% in April 2023 (CMIE data), reflecting an imbalance between growth and livelihoods.
  • Social Security Deficits: Currently only about 35 million out of a workforce of 400 million have access to formal social security in the form of old-age income protection leaving large sections vulnerable to economic shocks.
• Environmental and Ecological Challenges
  • Pollution and Health Impact: According to IQAir, India ranks as the third most polluted country globally, with 42 of its cities making it into the top 50 most polluted cities.
  • Vulnerability to Climate Change: Climate-related challenges, like extreme heat waves and abrupt droughts, impact agriculture and lead to displacement, affecting rural livelihoods and human development.

Measures to Ensure Inclusive Development:

• Enhanced Public Investment in Health and Education
  • Increase Health Budget: Raising healthcare spending to 4-5% of GDP, focusing on primary and preventive healthcare, can improve health outcomes and reduce inequality.
  • Education Reforms: Implement the National Education Policy (NEP) 2020’s focus on vocational education, digital learning, and regional language instruction to bridge the skill gap and improve employability.
• Addressing Inequalities through Targeted Welfare Programs
  • Strengthening Social Safety Nets: Expanding coverage under schemes like Ayushman Bharat and the PM Jan Dhan Yojana can improve access to financial and health security for marginalized groups.
  • Direct Benefit Transfers (DBTs): Improving DBT implementation to ensure timely and effective delivery of welfare benefits can empower vulnerable populations and reduce poverty.
• Promoting Employment and Skill Development
  • Skill India and Startup India Programs: Revamping skill development programs with industry-aligned curricula, especially in emerging fields like AI and renewable energy, can enhance job creation and productivity.
  • MSME Sector Support: Targeted assistance for Micro, Small, and Medium Enterprises (MSMEs), which account for a significant portion of employment, can stimulate job growth across regions.
• Focus on Sustainable and Green Development
  • Renewable Energy Investments: Expanding renewable energy projects, in line with India’s COP26 commitments, can create sustainable jobs, particularly in rural areas, while reducing environmental degradation.
  • Promote Climate-Resilient Agriculture: Programs like the Pradhan Mantri Krishi Sinchayee Yojana (PMKSY) should enhance focus on climate-resilient farming techniques to protect rural livelihoods and food security.
• Improving Data Collection and Policy Implementation
  • Real-Time Data Monitoring: Leveraging real-time data for health, employment, and poverty tracking can improve targeted delivery of social programs.
  • Decentralized Governance: Strengthening local governance to ensure that welfare schemes reach the grassroots effectively, especially in underserved regions.

Conclusion

Achieving high GDP growth alone cannot address the complex social challenges India faces. By investing in human capital, bridging regional inequalities, promoting sustainable development, and ensuring social security, India can achieve a more inclusive development model.

B.R. Ambedkar’s quote emphasizes the distinction between greatness and eminence. Eminence is often associated with recognition, power, and personal achievements, while greatness is rooted in selflessness and a commitment to the betterment of society. A truly great person does not seek accolades or authority but willingly assumes the role of a servant to address societal needs and uplift the marginalized.

Ambedkar’s life exemplifies this idea. Despite being a renowned scholar and leader, he dedicated himself to fighting for social justice, equality, and the rights of the oppressed. His work in framing the Indian Constitution reflects his readiness to serve the broader interests of society.

This quote inspires us to redefine success not by personal achievements but by contributions to societal well-being. Greatness lies in humility, empathy, and the willingness to prioritize collective progress over individual glory.

Role of e-NAM in Reducing Price Disparities and Improving Market Integration

The Electronic National Agriculture Market (e-NAM), launched in 2016 by the Government of India, is an online trading platform aimed at integrating agricultural markets across the country. By connecting Agricultural Produce Market Committees (APMCs) to a unified network, it seeks to create a transparent and competitive ecosystem for farmers, traders, and buyers.

Key Benefits of e-NAM:

1. Price Discovery: Farmers can access real-time price data across markets, reducing regional price disparities.
2. Market Integration: Linking over 1,000 APMCs facilitates the interstate trade of agricultural commodities, overcoming geographical barriers.
3. Reduced Exploitation: e-NAM minimizes middlemen involvement, ensuring better remuneration for farmers.
4. Ease of Transactions: The platform offers features like e-bidding and e-payment, enhancing efficiency.
5. Quality Assurance: Standardized grading and quality parameters foster trust and fair pricing.

Challenges in Implementation

1. Digital Divide: Limited digital literacy and poor internet connectivity in rural areas hinder farmer participation.
2. APMC Resistance: Many APMCs resist e-NAM integration due to fears of losing control over local markets.
3. Infrastructure Deficits: Inadequate storage facilities, transportation, and grading infrastructure limit its effectiveness.
4. Limited Coverage: Only a fraction of India’s agricultural mandis is integrated with e-NAM, restricting its reach.
5. Farmer Awareness: A lack of awareness and training about e-NAM’s benefits prevents widespread adoption.

Conclusion

e-NAM has great potential to reduce price disparities and improve market integration by creating a unified national agricultural market. However, addressing challenges such as infrastructure gaps, digital literacy, and resistance from traditional market structures is critical to realizing its full benefits and ensuring inclusive participation.

Introduction

India’s agricultural sector, the backbone of its economy, is ripe for transformation. The food processing industry emerges as a potent catalyst for this change.

• The market size of the food processing sector in India is estimated to reach USD 1,274 billion in 2027 from USD 866 billion in 2022.
• By converting raw agricultural produce into value-added products, the sector can significantly enhance farmers’ incomes, create employment opportunities, and ensure food security.

Potential of Food Processing Industry in India

• Value Addition: Increases value of raw agricultural produce like converting raw tomatoes into ketchup or puree increases their value by 20-30%
• Reduction in Post-Harvest Losses: Currently, India loses about 30-40% of fruits and vegetables due to lack of proper storage and processing
  • Food processing can significantly reduce these losses
• Increase in Farm Incomes: Processed foods fetch higher prices, benefiting farmers in doubling their income.
  • Example: Contract farming for specific varieties suited for processing (like, potatoes for Lays chips)
• Export Potential: During 2021-22, India recorded USD 49.6 billion in total agriculture exports.
  • With increasing global demand for Indian cuisines and healthy food, there’s significant room for export growth.
• Direct Employment: In food processing units, packaging, and distribution. The sector employs about 1.93 million people directly that can be further increased with increased food processing units.
  • Setting up food parks in rural areas creates local job opportunities. Mega Food Park Scheme has created significant number of jobs in rural areas
• Innovation and Product Development: There’s immense potential for innovation in developing new products catering to changing consumer preferences, such as healthy, organic, and convenience foods.
  • Paper Boat’s success with traditional Indian beverages in modern packaging demonstrates the potential for innovative product development

Key Challenges Related to Food Processing Sector:

• Infrastructure Deficits: Less than 10% of India’s produce moves through cold chains, compared to 85% in developed countries.
  • Poor road connectivity in rural areas increases transit time and product spoilage.
• Fragmented Supply Chain and Warehousing: Lack of direct farmer-processor linkages reduces farmers’ income and processors’ control over quality.
  • This fragmentation leads to price volatility, quality inconsistencies, and reduced profit margins across the value chain.
  • Multiple intermediaries between farmers and processors increase costs by 15-20%.
• Quality and Safety Standards: Many food processing units in India are not registered with quality certification agencies which leads to inadequate implementation of food safety regulations, particularly in the unorganized sector.
  • This affects export potential and consumer trust.
    • Cancer-causing chemicals found in 527 Indian food items by EU.
    • Also, various videos of unhygienic and unhealthy tomato sauce production In factory got circulated in social media.
• Lack of Skilled Workforce: Only 3% of India’s workforce in food processing has formal training. Also there is a shortage of food technologists, packaging specialists, and cold chain experts.
  • This skills gap hampers innovation and adoption of new technologies, reducing global competitiveness.
• Climate Change and Water Scarcity: 54% of India faces high to extremely high water stress. Erratic weather patterns affect crop yields and quality.
  • It threatens raw material supply and increases price volatility for processors.
• Inadequate Waste Management: Food processing generates 50 million tons of waste annually. And due to lack of efficient waste treatment, this leads to pollution and loss of potential by-product revenue.

Way Forward

• Farm-to-Fork Expressways: Develop dedicated logistics corridors for perishables, connecting major production centers to consumption hubs
  • Implement real-time tracking systems for shipments to reduce transit times and improve traceability
  • Establish multi-modal transport hubs in key agricultural regions to facilitate efficient movement of produce
• Cold Chain Revolution: Incentivize private investment in cold storage facilities through tax breaks and subsidies
  • Promote solar-powered cold storage units for rural areas to overcome electricity shortages
  • Develop a national cold chain grid connecting major production and consumption centers
• Skill India, Feed India: Launch food processing-specific vocational training programs in partnership with industry leaders
  • Create apprenticeship opportunities in food processing units across the country
  • Introduce food science and technology courses in secondary schools to create early awareness
• Elevating Food Safety Standards: Enhance nationwide mandatory quality certification program for processed foods with different tiers
  • Provide subsidies for SMEs to obtain international quality certifications like ISO 22000 and HACCP
  • Launch a public awareness campaign on food safety standards and the importance of certified products
• Green Processing Initiative: Introduce a green rating system for food processing units based on their environmental impact
  • Promote water recycling and zero-waste technologies in the sector through financial incentives
  • Develop guidelines for sustainable packaging and offer benefits for companies adopting them
• Farmer-Processor Bridges: Develop an app-based platform connecting farmers directly with processors to eliminate intermediaries
  • Encourage contract farming with built-in quality control measures and fair pricing mechanisms
  • Promote farmer producer organizations (FPOs) for collective bargaining and better market access
  • Establish agricultural extension services specifically for crops used in food processing
• Packaging Powerhouse: Incentivize domestic production of food-grade packaging materials through fiscal benefits
  • Promote research in biodegradable and active packaging solutions for extended shelf life
  • Establish testing facilities for packaging quality in major food processing hubs
  • Develop standards for smart packaging technologies like QR codes for traceability
• Food Waste to Wealth: Provide tax incentives for food waste recycling and upcycling initiatives
  • Promote biogas plants using food processing waste for energy generation
  • Develop markets for by-products from food processing, such as pectin from fruit waste

Conclusion

Realizing the full potential of the food processing industry is pivotal to India’s journey towards sustainable and inclusive growth. India can make significant strides in reducing food wastage (SDG 12), enhancing agricultural productivity (SDG 2), creating decent employment opportunities (SDG 8), and improving nutritional standards (SDG 2 and SDG 3).

Significance of financial inclusion for India:

1. Reduce Poverty: Financial inclusion means greater access to financial services and an increase in savings. This would help in decreasing income inequality & poverty and would lead to increase in employment levels.
2. Growth: It encourages the habit to save, thus enhancing capital formation in the country and giving it an economic boost. Also, the availability of sufficient and transparent credit from formal banking institutions will promote the entrepreneurial spirit among the people, leading to an increase in productivity and prosperity in rural areas.
3. Service delivery: Direct cash transfers to beneficiary bank accounts rather than physical cash payments against subsidies have become possible. Thus funds actually reach the targeted beneficiaries instead of being siphoned off along the way.
4. Banks’ efficiency: Banks which are operating in a financial inclusion sector could experience higher operating efficiency in financial intermediation.

What are the challenges to financial inclusion in India?

1. Illiteracy – In India, where nearly 1/4th of the population is illiterate and below the poverty line. Thus ensuring financial inclusion is a challenge.
2. Low income and the inability to provide collateral security.
3. Lack of enough bank branches in rural areas continues to be the roadblock to financial inclusion.
4. More reliance on informal lending.
5. Difficulty in understanding different product offerings, financial terms, and conditions.
6. A lot of hidden bank charges have demotivated poor persons from availing financial services.
7. Low-income groups don’t see banks as welcoming and often believe they are not for them.
8. Lack of credible, low-cost and high-quality financial advice.
9. Most women are being excluded from the formal financial system.
10. Disabled people find it difficult to access banks.
11. The rising level of Non-Performing Assets (NPAs) of banks due to the large corporates makes it difficult to improve financial inclusion situation in India.

What are the initiatives taken by the government to improve financial inclusion?

1. Banking initiatives:
   • Regional Rural Banks (RRBs): On the basis of Narasimham Working Group 1975, RRBs were established to serve banking needs of rural population.
   • Priority Sector Lending: is an important role given by the RBI to the banks for providing a portion of the bank loans to few specific sectors such as agriculture or small scale industries.
   • Business correspondents: RBI permitted banks to engage business correspondents/facilitators for providing door-step delivery of financial and banking services.
   • No-frills accounts: No-frills accounts means the bank accounts which does not require a minimum balance (or low sometimes). This means more accessibility to vast sections of the population.
   • KYC relaxation: Know Your Customer (KYC) requirements for opening bank accounts were relaxed for small accounts in August 2005. The opening of bank accounts became even easier with Aadhaar introduction.
   • Jan Dhan, Aadhaar and Mobile (JAM): It is a three-part strategy based on using digital technologies- Jan Dhan (banking), Aadhaar (Biometric Identity) and Mobile (transactions).
2. Other initiatives: Establishment of payment banks and small finance banks.
   • Establishment of MUDRA bank to refinance micro-finance institutions to lend to non-formal sectors such as MSMEs through PM Mudra Yojana.
   • Financial literacy centres were launched by commercial banks at the request of the RBI.
   • Financial inclusion of women through Aadhaar implementation.
   • Unified Payments Interface (UPI) platform built by the National Payments Corporation of India (NPCI).
   • National Centre for Financial Education was established in 2017 to implement the National Strategy for Financial Education.
   • Self-Help Group (SHG) – Bank Linkage Programme (SBLP) was launched by NABARD to provide door-step banking to the poor with the help of SHGs.
3. Social security Initiatives:
   • PM Suraksha Bima Yojana (PMSBY): Accidental death cum disability insurance, renewable 1 year, for 18-70 age group.
   • Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY): Life insurance, renewable 1 year, for 18-50 age group.
   • Atal Pension Yojana: Focus on unorganised sector.
   • Pradhan Mantri Jan Dhan Yojana: PMJDY has ensured universal access to bank account and India now has 180 billion accounts. However, 48% of those accounts haven’t seen any transaction in the last one year.