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Indian Economy

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Home/Indian Economy/Page 6

Mains Answer Writing Latest Questions

Rajashree Shirke
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Rajashree ShirkeLearner
Asked: January 20, 2025In:
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Roadmap for Answer Writing 1. Introduction  Briefly introduce the importance of clear land titles in India for economic development and growth. Mention how unclear land titles pose significant challenges in accessing credit, resolving disputes, and enabling infrastructure development. 2. Reasons Behind Unclear Land Titles ...

upsc: land reforms
  1. Team
    Best Answer
    Team Supreme

    Model Answer Reasons for Unclear Land Titles in India Unclear land titles in India can be attributed to several factors: Presumptive Land Titles: In India, land transactions are recorded through sale deeds that reflect the possession of land but not the definitive ownership. This makes the land titlRead more

    Model Answer

    Reasons for Unclear Land Titles in India

    Unclear land titles in India can be attributed to several factors:

    1. Presumptive Land Titles: In India, land transactions are recorded through sale deeds that reflect the possession of land but not the definitive ownership. This makes the land titles presumptive rather than conclusive, leading to ambiguity in ownership records.
    2. Non-mandatory Registration for All Transactions: According to the Registration Act of 1908, certain land transactions, such as those by the government or leases for less than one year, do not require registration. This leads to incomplete records of land ownership.
    3. High Registration Costs: The combined stamp duty (5-7%) and registration fees (1-2%) create a disincentive for property owners to register their lands at market value, further complicating the clarity of land titles.
    4. Poor Maintenance of Land Records: Land records are often maintained by different departments at the district or village levels, working in isolation, without regular updates or integration, resulting in inconsistent and outdated data.

    How Clear Land Titles Can Contribute to Socio-Economic Goals

    Clear and conclusive land titles can significantly impact India’s socio-economic development:

    1. Reduced Litigation: With 66% of civil cases related to land disputes, clear titles can expedite judicial processes, allowing courts to focus on other important matters, promoting legal efficiency.
    2. Improved Credit Accessibility: Clear titles enable farmers, especially marginal ones, to secure easier access to credit and insurance, helping them invest in better agricultural practices and break the cycle of poverty.
    3. Attracting Foreign Investment: Investors are often deterred by the uncertainty of land ownership. Clear titles can help mitigate legal risks, thereby fostering increased foreign investments that drive economic growth.
    4. Aid in Infrastructure Development and Housing: Streamlined land acquisition for housing and infrastructure projects can address India’s growing housing deficit, estimated to reach 38 million units by 2030.
    5. Boost to Economic Growth: Poor land records cost India approximately 1.3% of potential GDP growth. Digitalization and conclusive land titling can unlock economic potential, streamlining growth.

    Conclusion

    The shift to conclusive land titling and rapid digitization of land records is essential for improving land ownership clarity in India. It can foster greater economic development, enhance financial accessibility for farmers, and support infrastructure development.

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Rajashree Shirke
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Rajashree ShirkeLearner
Asked: January 20, 2025In:
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Roadmap for Answer Writing 1. Introduction Briefly introduce Energy Storage Systems (ESS) and their significance in India’s transition towards renewable energy. Mention the importance of ESS in supporting intermittent renewable sources like solar and wind, and stabilizing the grid. 2. Benefits of Energy Storage ...

upsc: energy
  1. Team
    Best Answer
    Team Supreme

    Model Answer Introduction India is working towards incorporating Energy Storage Systems (ESS) into its power infrastructure to support its transition towards renewable energy. ESS are critical in managing intermittent renewable energy, such as wind and solar, and ensuring grid stability. In August 2Read more

    Model Answer

    Introduction

    India is working towards incorporating Energy Storage Systems (ESS) into its power infrastructure to support its transition towards renewable energy. ESS are critical in managing intermittent renewable energy, such as wind and solar, and ensuring grid stability. In August 2023, the Ministry of Power introduced the National Framework for Promoting ESS to boost their role in the country’s energy landscape.

    Benefits of Energy Storage Systems (ESS)

    1. Smoothing Renewable Energy Generation: ESS paired with renewable energy plants (solar and wind) can store excess energy during high generation periods and release it when generation is low. This reduces the intermittent nature of renewable energy, improving grid stability and increasing renewable energy use.
      • Example: ESS can store solar power during the day and release it at night when demand is higher.
    2. Peak Electricity Demand Shaving: By storing energy during off-peak periods, ESS can discharge energy during peak demand times, reducing the pressure on the grid and lowering electricity prices.
    3. Deferring Infrastructure Investments: ESS can be strategically located on the grid to manage localized demand, avoiding the need for costly new substations and transmission lines.
    4. Reducing Demand Charges: Commercial and industrial users can deploy on-site ESS to reduce their peak demand, which lowers demand charges typically incurred during high consumption periods.

    Government Policy Initiatives

    1. Legal Status to ESS: The Electricity (Amendment) Rules, 2022 have granted ESS legal recognition as part of the power system, facilitating integration into the energy infrastructure.
    2. Energy Storage Obligation (ESO): To ensure sufficient storage capacity, the government has set a long-term trajectory for ESO, aiming for around 82 GWh of storage by 2026-27, as outlined in the National Electricity Plan 2023.
    3. Waiver of Transmission Charges: The government has waived Inter-State Transmission System charges for ESS, promoting their use and integration into the national grid.
    4. Replacing Diesel Generators (DGs): The Electricity (Amendment) Rules, 2022 mandate that consumers using DG sets switch to renewable energy and storage systems, promoting cleaner alternatives.

    Conclusion

    ESS play a vital role in managing India’s transition to a renewable energy-driven economy. The government’s supportive policies, such as the legal recognition of ESS and incentivizing energy storage integration, will help achieve the country’s energy security and sustainability goals.

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Rajashree Shirke
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Rajashree ShirkeLearner
Asked: January 20, 2025In:
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Roadmap for Answer Writing Introduction Briefly introduce the concept of Solar-Powered Irrigation Systems (SPIS). Definition: SPIS uses solar energy to operate irrigation equipment such as pumps, offering an eco-friendly and sustainable alternative to traditional irrigation methods. Relevance to India: India’s vast agricultural land and ...

upsc: technology missions in agriculture
  1. Team
    Best Answer
    Team Supreme

    Model Answer Benefits of Solar-Powered Irrigation Systems (SPIS) in India 1. Reduced Dependence on Monsoons and Climate Change Resilience: SPIS can mitigate the impacts of erratic monsoon patterns and climate change. These systems ensure a consistent water supply, which enhances agricultural productRead more

    Model Answer

    Benefits of Solar-Powered Irrigation Systems (SPIS) in India

    1. Reduced Dependence on Monsoons and Climate Change Resilience: SPIS can mitigate the impacts of erratic monsoon patterns and climate change. These systems ensure a consistent water supply, which enhances agricultural productivity and stability. For example, farmers in Chandrapur, Jharkhand, shifted from rain-fed paddy cultivation to vegetable farming after installing solar-powered lift irrigation systems, thereby improving yields and profitability.

    2. Reliable Daytime Electricity Supply: In areas with unreliable electricity, such as Vidarbha, SPIS provides a steady and regular power supply, allowing farmers to irrigate crops without depending on erratic power schedules. This reliable energy access directly impacts productivity by ensuring timely irrigation.

    3. Additional Income Streams: Farmers can sell surplus electricity generated by SPIS back to the grid, creating an extra income stream. For instance, 36% of farmers in Chhattisgarh and 14% in Haryana saw a 50% increase in their annual income after installing solar water pumps.

    4. Reduced Farm Subsidies: By replacing diesel and electric pumps, SPIS reduce the need for government subsidies. In 2019, electricity subsidies for agriculture in India amounted to over Rs. 1 lakh crore. The adoption of SPIS is expected to decrease these subsidies, freeing up resources for other initiatives.

    5. Environmental Benefits: SPIS significantly reduce the carbon footprint of agricultural practices by replacing fossil fuel-based power sources with solar energy. The PM-KUSUM scheme alone is projected to cut down carbon emissions by up to 32 million tonnes annually.

    Limitations of SPIS

    1. High Initial Investment: The installation cost of SPIS can be high, making it unaffordable for small-scale farmers. This is a significant barrier to widespread adoption.

    2. Maintenance and Technical Challenges: SPIS require regular maintenance and technical expertise, which may not be readily available in rural areas, hindering their effectiveness.

    3. Storage and Efficiency Issues: Solar energy is intermittent, and without efficient storage solutions, SPIS may be ineffective during cloudy days or at night. The performance of these systems is also geographically dependent.

    4. Water Management Concerns: Improper management of water resources could lead to over-exploitation, especially of groundwater, necessitating stringent regulations for sustainable water use.

    Conclusion: Despite these challenges, SPIS hold great potential to transform Indian agriculture by promoting sustainable, climate-resilient farming. Through targeted interventions such as training programs and public-private partnerships, the barriers to adoption can be reduced, making SPIS a key driver of inclusive growth and environmental sustainability in Indian agriculture.

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Rajashree Shirke
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Rajashree ShirkeLearner
Asked: January 20, 2025In:
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Roadmap for Answer Writing 1. Introduction Begin by explaining the concept of High-Speed Rail (HSR) and its relevance to India’s transport infrastructure development. Briefly mention India’s ambition to improve connectivity, reduce travel time, and boost economic integration through the development of HSR corridors ...

upsc: infrastructure
  1. Team
    Best Answer
    Team Supreme

    Model Answer Potential of High-Speed Rail (HSR) Corridors in Driving Economic Growth in India High-Speed Rail (HSR) corridors in India are poised to play a pivotal role in boosting economic growth and development. With speeds of 300 km/h+ for HSRs and 160-200 km/h for semi-high-speed trains like theRead more

    Model Answer

    Potential of High-Speed Rail (HSR) Corridors in Driving Economic Growth in India

    High-Speed Rail (HSR) corridors in India are poised to play a pivotal role in boosting economic growth and development. With speeds of 300 km/h+ for HSRs and 160-200 km/h for semi-high-speed trains like the Vande Bharat Express, these corridors have the potential to drive significant changes across various sectors of the economy.

    Economic Growth and Market Integration

    HSR corridors enhance connectivity between regions, allowing businesses to access broader markets. This improved integration has a direct impact on GDP growth. Research suggests that a 1% increase in market access through HSR corridors results in a 0.25% rise in GDP in connected towns. By enhancing transportation, businesses can move goods more efficiently, which leads to higher productivity and economic expansion.

    Boost to Industry and Employment

    The construction of HSR corridors is expected to generate substantial demand for industrial activities, including construction, manufacturing, and allied sectors. For instance, in the Mumbai-Ahmedabad High-Speed Rail (MAHSR) project, 70% of the civil construction work is allocated to Indian contractors, directly contributing to the “Make in India” initiative and promoting domestic industries.

    Technology Transfer and Workforce Development

    The introduction of HSR in India is also a vehicle for technology transfer. The MAHSR project incorporates Japan’s Shinkansen technology, which not only improves rail safety and efficiency but also creates opportunities for workforce upskilling and job creation. Indian engineers and technicians are gaining valuable expertise through hands-on involvement with this advanced technology.

    Stimulus for Satellite Towns and Tourism

    HSR corridors can revitalize smaller towns and cities by improving connectivity with metropolitan hubs. For example, the MAHSR corridor links cities like Thane and Ahmedabad with smaller towns such as Bilimora and Vapi. This connectivity fosters growth in tourism, employment, and business opportunities in these lesser-developed areas.

    Environmental Sustainability

    Compared to cars and airplanes, HSR is far more environmentally sustainable. Studies show that HSR is up to 8.32 times less carbon-intensive than car travel and up to 11.48 times less than aviation, contributing to India’s long-term sustainability goals.

    Conclusion

    Despite challenges like land acquisition and cost overruns, the HSR initiative holds immense potential to contribute to India’s economic growth, technological advancement, and environmental sustainability. As these projects progress, they can help India achieve its goal of becoming a $5 trillion economy.

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Rajashree Shirke
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Rajashree ShirkeLearner
Asked: January 20, 2025In:
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Roadmap for Answer Writing 1. Introduction Start with a brief overview of PDS in India: The Public Distribution System (PDS) is a government program designed to distribute subsidized food grains to India’s population, especially the economically weaker sections. The system involves over 500,000 fair-price ...

upsc: public distribution system
  1. Team
    Best Answer
    Team Supreme

    Model Answer Impact of Digitization on the Public Distribution System (PDS) in India The digitization of India's Public Distribution System (PDS) has emerged as a crucial solution to the long-standing challenges faced by the system, such as bogus beneficiaries, food grain leakage, and inefficient taRead more

    Model Answer

    Impact of Digitization on the Public Distribution System (PDS) in India

    The digitization of India’s Public Distribution System (PDS) has emerged as a crucial solution to the long-standing challenges faced by the system, such as bogus beneficiaries, food grain leakage, and inefficient targeting of subsidies. The integration of technology in PDS operations has resulted in significant improvements:

    1. Authentication of Beneficiaries
      Through digitization, the PDS has addressed the issue of bogus beneficiaries. The Aadhaar seeding of ration cards ensures that subsidies reach only eligible individuals. As of 2020, about 4.39 crore ineligible or bogus ration cards were removed through this process, enhancing the credibility of the system (Ministry of Consumer Affairs, Food & Public Distribution).
    2. Reduction of Leakage and Diversion
      The introduction of online allocation of food grains and computerization of the supply chain has minimized pilferage and diversion. Real-time tracking, including the use of GPS to monitor trucks transporting food grains, has increased transparency in the system, ensuring grains reach the intended beneficiaries.
    3. Enhanced Operations at Fair Price Shops
      The deployment of electronic Point of Sale (ePoS) devices in over 92% of fair price shops has streamlined operations, reducing manipulation of records and improving the beneficiary experience by enabling biometric identification.
    4. Interoperability of Benefits
      The ‘One Nation One Ration Card’ (ONORC) scheme, which allows beneficiaries to access their entitlements across states, addresses the challenges faced by migrant populations. This national portability ensures that no individual is excluded from benefits.

    Potential of the SMART-PDS Initiative

    The SMART-PDS initiative, launched to modernize and reform the PDS, offers additional benefits:

    1. Automation of Operations
      The use of automated grain analyzers for precise measurement and reduced human intervention will improve system transparency, reduce errors, and prevent biases.
    2. Integration of AI and Data Science
      The application of AI and data science, such as the Public Systems Lab (PSL) at IIT Delhi, will optimize supply chain logistics, detect fraud, and improve efficiency.
    3. Overcoming Technological Limitations
      SMART-PDS aims to address state-level technological constraints, enhancing the IT infrastructure and capacity at the local level.

    By fostering transparency, accountability, and efficiency, SMART-PDS can contribute significantly to the achievement of SDG-1 (ending poverty) and SDG-2 (zero hunger).

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Rajashree Shirke
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Rajashree ShirkeLearner
Asked: January 20, 2025In:
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Roadmap for Answer Writing 1. Introduction Context: Provide a brief introduction to India’s livestock sector and its importance. Relevance of the Issue: Explain the significance of climate stress on livestock productivity. 2. Impact of Climate Stress on Livestock Productivity Milk Production: Explain how climate stress affects ...

upsc: economics of animal-rearing
  1. Team
    Best Answer
    Team Supreme

    Model Answer Impact of Climate Stress on Livestock Productivity Reduced Milk Production Climate stress affects animals’ neuroendocrine systems, altering behavior and reducing milk yields due to lower feed intake and conversion rates. Example: Global warming could reduce India’s total milk productionRead more

    Model Answer

    Impact of Climate Stress on Livestock Productivity

    1. Reduced Milk Production
      • Climate stress affects animals’ neuroendocrine systems, altering behavior and reducing milk yields due to lower feed intake and conversion rates.
      • Example: Global warming could reduce India’s total milk production by over 15 million tonnes by 2050.
    2. Impaired Reproduction
      • High temperatures and humidity disrupt reproductive functions by impairing cellular processes in reproductive organs.
    3. Depleted Feed and Water Resources
      • Rising temperatures and irregular rainfall decrease grazing land productivity and water availability.
      • Example: Over 60% of India’s livestock depend on rainfed areas, making them highly vulnerable to climate variability.
    4. Increased Vector-Borne Diseases
      • Warmer temperatures and altered rainfall patterns expand the prevalence of diseases. Heat stress weakens immunity and reduces vaccine efficacy.

    Adaptation Measures

    1. Feeding Management
      • Practices like wetting straws and using nutrient-dense feed reduce internal heat loads on animals, enhancing resilience.
    2. Improved Housing Design
      • Optimizing shelters with ventilated spaces and heat-resistant roofing materials creates a cooler microenvironment for livestock.
    3. Weather Forecasting and Early Warnings
      • Systems to predict extreme weather events and disease outbreaks enable farmers to safeguard livestock.
    4. Breeding Climate-Resilient Livestock
      • Promoting local breeds like Kankrej and Tharparkar cattle or Jaffrabadi buffaloes that are adapted to adverse climates.
    5. Integrating Livestock with Agriculture
      • Combining grain crops with pasture and livestock ensures diversified, climate-resilient farming systems.

    Conclusion

    With livestock being a critical source of livelihood, it is essential to address climate stress through innovative solutions. These measures not only sustain productivity but also reduce the environmental footprint of livestock farming.

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Rajashree Shirke
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Rajashree ShirkeLearner
Asked: January 20, 2025In:
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Roadmap for Answer Writing 1. Introduction Define smart irrigation and highlight its significance in sustainable water management for agriculture. Briefly mention the challenges in India’s current irrigation system to establish the context. Example: “Smart irrigation systems leverage advanced technologies such as sensors and automation to ...

upsc: irrigation
  1. Team
    Best Answer
    Team Supreme

    Model Answer Issues with India's Current Irrigation System Low Coverage: Despite progress, only 55% of India's cultivated land has access to assured irrigation, leaving many farmers dependent on unpredictable rainfall. Unequal Distribution: Regional disparities persist in irrigation infrastructure.Read more

    Model Answer

    Issues with India’s Current Irrigation System

    1. Low Coverage: Despite progress, only 55% of India’s cultivated land has access to assured irrigation, leaving many farmers dependent on unpredictable rainfall.
    2. Unequal Distribution: Regional disparities persist in irrigation infrastructure. For instance, 94% of farm plots in Tamil Nadu are irrigated, whereas Himachal Pradesh relies almost entirely on rain-fed farming.
    3. Groundwater Depletion: Excessive extraction for irrigation has led to groundwater exhaustion, particularly in Punjab, Haryana, and Rajasthan, where annual withdrawals exceed recharge rates.
    4. Low Irrigation Efficiency: Poorly maintained infrastructure like unlined canals results in water losses, with India’s average irrigation efficiency at 38%, much lower than 50-60% in developed countries.
    5. Farmer Awareness: Only 19% of irrigated land uses micro-irrigation systems, while inefficient flood irrigation dominates, causing waterlogging and soil erosion.

    Role of Smart Irrigation Systems (SIS)

    1. Water Conservation: SIS uses real-time data and automation to optimize water use, preventing over-watering and enhancing crop yields.
      • Example: Precision drip systems reduce water wastage significantly.
    2. Precision Irrigation: Advanced sensors ensure water is delivered directly to roots, improving efficiency and reducing weed growth.
    3. Environmental Sustainability: By preventing waterlogging and soil erosion, SIS supports sustainable agriculture and combats groundwater depletion.
    4. Remote Monitoring: SIS-equipped mobile apps allow real-time control and monitoring, improving both on-farm and off-farm water management.
    5. Data-Driven Decision-Making: Insights from soil moisture and weather data aid in informed irrigation practices, continuously improving water efficiency.
    6. Energy Efficiency: Efficient water distribution methods save energy, especially in states like Punjab and Haryana that rely on water pumping systems.

    Conclusion

    While high costs, power supply issues, and the need for farmer training remain challenges, smart irrigation systems offer a transformative solution for India’s irrigation inefficiencies. Their adoption can pave the way for sustainable water management and improved agricultural productivity.

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Rajashree Shirke
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Rajashree ShirkeLearner
Asked: January 20, 2025In:
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Roadmap for Answer Writing 1. Introduction Briefly introduce India’s global position in pulse production and consumption. Mention the rise in domestic production and the persistent reliance on imports to meet demand. Key Fact: India contributes 35% of the global area and 25% of global pulse ...

upsc: agriculture & food management
  1. Team
    Best Answer
    Team Supreme

    Model Answer Introduction India is the largest producer and consumer of pulses, contributing 35% of the global area and 25% of global production. Despite a 50% rise in domestic production over the last decade (from 18.3 million tonnes to 27.5 million tonnes), the country still relies on imports, accRead more

    Model Answer

    Introduction

    India is the largest producer and consumer of pulses, contributing 35% of the global area and 25% of global production. Despite a 50% rise in domestic production over the last decade (from 18.3 million tonnes to 27.5 million tonnes), the country still relies on imports, accounting for 9% of pulse consumption in 2021-22.

    Key Factors Contributing to the Imbalance

    1. Inadequate Government Procurement

    • The low Minimum Support Price (MSP) and inadequate procurement discourage farmers from growing pulses.
    • Lack of guaranteed returns creates production uncertainties.

    2. Hoarding and Cartelization

    • Traders’ stockpiling worsens shortages, leading to price spikes.
    • Example: Arhar dal prices surged 15 times in a single month due to hoarding practices.

    3. Lower Yields

    • Pulses yield only 0.9 tonnes per hectare compared to wheat (3.5 tonnes/ha) and rice (2.8 tonnes/ha).
    • Dependency on the monsoon and limited adoption of high-yield varieties further exacerbate the issue.
    • Example: India’s tur yield is half that of Myanmar.

    4. Production Disparities

    • Overemphasis on crops like channa (50% of pulse production) reduces cultivation of other pulses, increasing reliance on imports of these varieties.

    5. Infrastructure Gaps

    • Poor storage, inadequate cold chains, and inefficient transportation lead to post-harvest losses.
    • Example: Up to 10% of pulses and cereals are wasted annually due to infrastructural challenges.

    6. Rising Demand from Dietary Changes

    • Increased income and changing food habits have led to higher demand for protein-rich pulses.
    • Example: NITI Aayog projects India’s pulse demand to reach 32.64 million tonnes by 2029-30.

    Conclusion

    To reduce import dependency, India must focus on improving yields through better technology, incentivizing farmers with assured MSP, reducing wastage via robust infrastructure, and diversifying pulse production. Addressing these issues is critical to ensuring food security and achieving self-sufficiency in pulses.

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Rajashree Shirke
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Rajashree ShirkeLearner
Asked: January 20, 2025In:
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Roadmap for Answer Writing 1. Introduction Begin with a definition of landlord ports. Fact: The landlord model separates the port authority’s role as a regulator and infrastructure provider from operational activities, which are handled by private players. Highlight the relevance of the landlord model ...

upsc: infrastructure
  1. Team
    Best Answer
    Team Supreme

    Model Answer Landlord Ports A landlord port is a management model where a public port authority serves as a landlord, overseeing infrastructure and regulations, while private companies handle port operations, such as cargo handling. India is transitioning its major ports to this model under the MariRead more

    Model Answer

    Landlord Ports

    A landlord port is a management model where a public port authority serves as a landlord, overseeing infrastructure and regulations, while private companies handle port operations, such as cargo handling. India is transitioning its major ports to this model under the Maritime India Vision (MIV) 2030, with plans for 39 berths to adopt it.

    Key Contributions of Landlord Ports

    1. Streamlined Governance

    • By separating the landlord and operational roles, this model removes the conflict of interest inherent in the earlier system.
    • It promotes independent and efficient oversight while fostering fair competition among private terminal operators.

    2. Enhanced Operational Connectivity

    • Private global companies bring extensive networks, improving interconnectivity across supply chains.
    • Example: DP World linked JNPT to global shipping lines and inland logistics hubs.

    3. Technological Advancements

    • Private operators introduce advanced technologies, enhancing productivity and reducing operational costs.
    • Example: Automated Guided Vehicles implemented by private players boost container handling capacities.

    4. Improved Service Quality

    • Competition among private entities drives innovation, efficiency, and customer satisfaction.
    • Example: JNPT’s 100% landlord model spurred competition among private container operators, resulting in superior services.

    5. Increased Investments

    • The model encourages private sector participation, unlocking investments in port infrastructure.
    • Example: MIV 2030 anticipates investments of ₹1,00,000–₹1,25,000 crores for capacity expansion.

    Challenges and the Way Forward

    • Coordination Issues: Diverse technologies used by private players may lead to integration challenges.
    • Cybersecurity Concerns: Increased private participation necessitates robust cybersecurity frameworks.

    Despite these challenges, the landlord port model, with its focus on private investment and operational excellence under government oversight, is poised to enhance India’s port efficiency, bolstering trade competitiveness and economic growth.

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Rajashree Shirke
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Rajashree ShirkeLearner
Asked: January 20, 2025In:
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Roadmap for Answer Writing 1. Introduction: Define Key Terms Operational Stocks: Stocks maintained by the government to fulfill food security needs, especially for public welfare programs like the Public Distribution System (PDS). Strategic Reserves: Surplus stocks held to stabilize food prices and ensure ...

upsc: storage transport & marketing in agriculture
  1. Team
    Best Answer
    Team Supreme

    Model Answer Operational Stocks and Strategic Reserves In India, operational stocks refer to the foodgrains maintained for distribution under public welfare schemes like the Public Distribution System (PDS). These stocks are intended to meet the daily food requirements of the population, ensuring foRead more

    Model Answer

    Operational Stocks and Strategic Reserves

    In India, operational stocks refer to the foodgrains maintained for distribution under public welfare schemes like the Public Distribution System (PDS). These stocks are intended to meet the daily food requirements of the population, ensuring food security. Strategic reserves, on the other hand, are surplus stocks held beyond the operational needs by the Food Corporation of India (FCI). These reserves help stabilize food prices and are used in case of emergencies such as droughts or unforeseen food shortages.

    Buffer Stocking Policy: A Critical Evaluation

    The buffer stocking policy in India plays a crucial role in food security by managing food supply, stabilizing prices, and preventing crises. However, there are several concerns with its implementation:

    1. Open-ended Procurement: The government purchases an unlimited quantity of foodgrains at the Minimum Support Price (MSP). While this aims to support farmers, it often leads to excessive stocks. For example, in August 2023, the FCI held about 243 LMT of rice and 281 LMT of wheat, well above the official stock limits, resulting in surplus grain that isn’t always needed .
    2. Financial Burden: Procuring grains at MSP and distributing them at lower issue prices creates a significant fiscal burden. In FY 2021-22, India’s food subsidy bill amounted to ₹2.88 lakh crore. This gap between procurement and issue prices results in high government expenditure .
    3. Ineffective Procurement: The procurement process is often inefficient due to the fixed procurement prices announced before sowing. This can lead to excessive purchases in bumper crop years, as seen in the government’s inability to adjust to market fluctuations.
    4. Storage Issues: The FCI’s storage capacity is insufficient, leading to grain wastage. Every year, more than 1,500 MT of food grains are damaged due to poor storage conditions, such as pests and water leaks.
    5. Limited Private Sector Participation: High MSPs, excessive government control, and restrictions from laws like the Essential Commodities Act have hindered private sector participation in grain markets.
    6. Lack of Crop Diversification: The focus on wheat and rice has resulted in the neglect of other crops like oilseeds, leading to a significant reliance on imports for products like edible oils. India imports around 56% of its annual edible oil consumption.

    Conclusion

    While the buffer stocking policy has successfully contributed to food security, its sustainability needs reassessment. Efficient procurement, better storage facilities, increased private sector involvement, and promoting crop diversification are essential to optimize this policy and reduce its financial and logistical burden on the government.

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