Indian Economy

Model Answer

Introduction

India’s irrigation system faces several significant challenges that hinder agricultural productivity and water management.

Major Challenges Faced by the Indian Irrigation System

1. Dependence on Unpredictable Monsoon Patterns: The Indian irrigation system heavily relies on monsoon rains, which are often erratic and delayed. Regions like Marathwada and Vidarbha in Maharashtra frequently experience droughts, leading to crop failures and increased farmer distress .
2. Deterioration of Irrigation Infrastructure: Many irrigation systems are outdated and poorly maintained, resulting in inefficiencies and significant water wastage. Silted dams and leaking canals reduce water availability at the farm level .
3. Subsidized Electricity: The provision of cheap or free electricity for agricultural pumping encourages over-extraction of groundwater, particularly in states like Punjab and Haryana, leading to severe depletion of aquifers.
4. High Costs of Modern Irrigation Systems: While modern irrigation techniques like drip and sprinkler systems are effective in conserving water, their high initial costs make them inaccessible for small and marginal farmers.
5. Fragmented Policy Implementation: The lack of coordination among various levels of government leads to inefficiencies in implementing irrigation policies, such as the Pradhan Mantri Krishi Sinchayee Yojana (PMKSY).
6. Water Pollution: The overuse of fertilizers and pesticides has contaminated water bodies, making them unsuitable for irrigation, particularly in regions reliant on rivers.
7. Climate Change: Increasingly frequent extreme weather events, such as floods and droughts, disrupt traditional irrigation practices and exacerbate water scarcity.

Measures Taken by the Government for Efficient Irrigation Management

1. Pradhan Mantri Krishi Sinchayee Yojana (PMKSY): Launched in 2015, this scheme aims to improve irrigation infrastructure and promote micro-irrigation to ensure efficient water use.
2. Command Area Development and Water Management: This program enhances the utilization of irrigation potential through better management practices in command areas.
3. National Water Policy Revision: The revised policy emphasizes sustainable water management and the adoption of water-saving technologies.
4. Participatory Irrigation Management (PIM): This initiative encourages the involvement of Water User Associations in managing irrigation systems, leading to better local water management.
5. Adoption of Advanced Technologies: The government promotes the use of remote sensing and GIS to monitor irrigation projects and improve water use efficiency.
6. International Collaborations: India collaborates with countries like Israel to adopt modern irrigation techniques that optimize water usage.

Conclusion

Addressing the challenges faced by the Indian irrigation system through effective government measures is crucial for sustainable agricultural productivity and water security.

Model Answer

Introduction

The four Labour Codes—Code on Wages, Industrial Relations Code, Code on Social Security, and Occupational Safety, Health, and Working Conditions Code—represent a significant reform in India’s labour market, aiming to simplify and consolidate existing laws.

Merits of the Labour Codes

1. Simplification of Laws: The Codes consolidate 29 existing labour laws into four, reducing complexity and improving compliance for businesses.
2. Universal Minimum Wages: They ensure a minimum wage for all workers, including those in the unorganized sector, potentially benefiting around 500 million workers.
3. Flexibility in Hiring and Firing: The Industrial Relations Code allows firms with up to 300 workers to lay off employees without government approval, fostering a more dynamic labour market.
4. Social Security for Gig Workers: The Code on Social Security extends benefits to gig and platform workers, requiring companies like Ola and Zomato to contribute to a social security fund .
5. Grievance Redressal Mechanism: The establishment of Grievance Redressal Committees aims to resolve disputes more efficiently within organizations.

Demerits of the Labour Codes

1. Erosion of Collective Bargaining: The requirement for a 60-day notice period for strikes may weaken the power of trade unions .
2. Inadequate Social Security for Informal Workers: Despite the Codes, many informal workers remain without adequate social security protections .
3. Employer-Friendly Provisions: Increased thresholds for layoffs without government approval may lead to job insecurity for workers .
4. Limited Occupational Safety Measures: The Occupational Safety Code lacks stringent provisions for worker safety in hazardous sectors .
5. Ambiguity in Implementation: Variability in state-level implementation could lead to inconsistent application of the Codes across India .

Progress So Far

The implementation of the Labour Codes has faced delays, primarily due to the pandemic and resistance from trade unions. As of 2023, many states have not finalized the necessary rules, although some, like Gujarat, have made progress in notifying aspects of the Codes . The government continues to engage in tripartite consultations to address concerns and establish social security boards for gig workers .

Conclusion

While the Labour Codes have the potential to streamline India’s labour laws and enhance worker protections, their success will depend on effective implementation and addressing the concerns of various stakeholders.

Model Answer

Introduction

Millets, recognized by the United Nations as the International Year of Millets in 2023, are vital for enhancing health and nutritional security in India. These ancient grains are not only nutritious but also resilient to climate change, making them a sustainable choice for the future.

Health Security

1. Antioxidant-Rich Composition: Millets are rich in antioxidants, which help reduce oxidative stress and prevent chronic diseases. For example, ragi is known for its high antioxidant content, supporting cellular health.
2. Gluten-Free Alternative: Naturally gluten-free, millets like jowar are suitable for individuals with celiac disease or gluten intolerance, allowing broader dietary options.
3. High Fibre Content: Millets, such as bajra, are rich in dietary fibre, promoting digestion and gut health while preventing constipation.
4. Stabilizing Blood Sugar Levels: With a low glycemic index, millets help regulate blood sugar levels, making them particularly beneficial for diabetes management.
5. Cardiovascular Benefits: Millets can lower cholesterol levels, improving heart health. Pearl millet, for instance, is associated with reducing bad cholesterol.

Nutritional Security

1. Protein-Rich Source: Millets provide a good source of plant-based protein, essential for muscle development and overall body function.
2. Vitamins and Minerals: Packed with vitamins (like B-complex) and minerals (such as magnesium and iron), millets contribute significantly to overall health. Bajra is particularly rich in magnesium, supporting bone health.
3. Combating Anaemia: Rich in iron, millets effectively combat iron-deficiency anaemia, especially among women and children.
4. Micronutrient Rich: Millets contain vital micronutrients; for example, pearl millet is abundant in iron and zinc, crucial for immune function.
5. Sustained Energy Levels: Millets provide slow-releasing carbohydrates, ensuring steady energy throughout the day. Foxtail millet, in particular, helps maintain energy levels without crashes.

Conclusion

Millets are essential for ensuring both health and nutritional security in India. Their adaptability and resilience make them a cornerstone for sustainable agricultural practices, contributing to food security while empowering farmers. Through increased awareness and supportive policies, millets can play a transformative role in the nation’s nutritional landscape.

Relevant Facts

• The United Nations declared 2023 as the International Year of Millets to promote their cultivation and consumption.
• Ragi is rich in antioxidants, which help combat chronic disease.
• Jowar serves as a widely accepted gluten-free grain in India.
• Pearl millet has been shown to reduce bad cholesterol levels, thereby improving heart health.
• Millets like bajra are significant sources of magnesium, aiding in various bodily functions.

By promoting the cultivation and consumption of millets, India can enhance health outcomes and nutritional security for its population.

Model Answer

Introduction

Addressing persistent high food inflation is essential for ensuring economic stability and maintaining citizens’ standard of living, as recognized under Article 47 of the Indian Constitution. The phenomenon of food inflation in India is multifaceted, influenced by domestic production, global market conditions, and government policies.

1. Supply Chain Disruptions: Disruptions in transportation, labor, and logistics often result in reduced food availability. For example, the 2010 and 2013 droughts highlighted how adverse climatic conditions disrupted the supply chain, causing price spikes.
2. Increased Cost of Production: Rising production costs, such as fuel, wages, and raw materials, inflate food prices. The implementation of the Seventh Pay Commission raised wages, increasing agricultural production costs.
3. Global Market Dependency: India relies on imports for commodities like edible oils and pulses, making it vulnerable to global price fluctuations. A spike in global crude oil prices affects the cost of edible oil imports, influencing domestic prices.
4. Inflation Expectations: Expectations of rising prices often result in actual price hikes, as observed in consumer behavior. RBI studies show that inflation expectations among households correlate with higher food prices.
5. Energy Prices: The deregulation of fuel prices increases transportation costs, further escalating food inflation. The deregulation of diesel prices in 2014 directly impacted the transportation costs of agricultural goods.
6. Adverse Weather Conditions: Erratic weather patterns, like weak monsoons or heat waves, affect crop yields and lead to shortages. The weak monsoon of 2023 affected the production of cereals, causing an inflation surge.
7. Government Policies on MSP: Minimum Support Price encourages disproportionate cultivation of certain crops, leading to supply-demand imbalances. Heavy MSP support for rice and wheat skews market supply, affecting inflation for other essential crops.

Effectiveness of RBI’s Monetary Policy to Control Food Inflation

The Reserve Bank of India (RBI) employs several strategies to manage inflation, including food inflation:

1. Use of Repo Rate: The RBI uses its repo rate as a tool to control inflation by making borrowing costlier, thus reducing demand for goods and services, including food items.
2. Inflation-Targeting Framework: The RBI’s inflation-targeting framework (4% ± 2%) provides a structured approach to managing inflation but struggles to meet targets when food inflation rises due to external factors like supply disruptions or global shocks.
3. Liquidity Management: The RBI implements liquidity adjustment facilities to manage excess money supply, helping to control demand-pull inflation.
4. Focus on Core Inflation: The RBI focuses on core inflation, excluding food and fuel prices, which can enhance its ability to maintain overall price stability.
5. Intervention in Exchange Rate Management: The RBI intervenes in the forex market to manage the exchange rate, which can impact the cost of imported food items, especially edible oils and pulses.
6. Coordination with Fiscal Policy: Effective control of food inflation requires coordination between RBI’s monetary measures and government fiscal policies, such as subsidies and import duties.

Shortcomings of RBI’s Monetary Policy

Despite these measures, the RBI faces challenges in controlling food inflation:

• Limited Impact on Supply-Side Factors: Food inflation is driven by supply-side issues like weather disruptions and transport costs, which monetary policy can’t address effectively.
• Exclusion of Food from Core Inflation Focus: RBI targets core inflation, excluding food prices, limiting its ability to control volatile food inflation.
• Delayed Policy Impact: Monetary policy takes time to influence the economy, while food inflation reacts quickly to supply shocks.
• Ineffective Against Imported Inflation: Global price changes, like in edible oils, affect Indian food inflation, beyond RBI’s control.

Conclusion

While RBI’s monetary policy helps curb inflation, its effect on food inflation is limited by supply constraints and global factors. A coordinated approach, including fiscal interventions and agricultural reforms, is essential for ensuring food price stability and economic resilience.