7 Agriculture & Infrastructure

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I AS BABA
ECONOMY
PEP - 2024
PRELIMS EXCLUSIVE PROGRAMME
Most Comprehensive Prelims CLASSROOM Program
IASBABA’S PEP 2024 – ECONOMY HANDOUT 10
Contents
PREVIOUS YEARS QUESTIONS ....................................... 2
ROLE OF AGRICULTURE IN INDIAN ECONOMY .................. 3
PUBLIC DISTRIBUTION SYSTEM ..................................... 7
NATIONAL FOOD SECURITY ACT, 2013 .............................11
MINIMUM SUPPORT PRICE (MSP) ...................................13
GOVERNMENT INITIATIVES, POLICIES AND MEASURES 14
EDIBLE OIL SECTOR IN INDIA ........................................20
NATIONAL MISSION ON EDIBLE OILS – OIL PALM (NMEO-
OP) ..............................................................................20
INVESTMENT ...................................................................21
INVESTMENT MODELS .................................................21
INFRASTRUCTURE SCHEMES ............................................24
URBAN DEVELOPMENT ................................................24
SURFACE TRANSPORT ..................................................25
PORTS ..........................................................................26
CIVIL AVIATION ............................................................27
INFRASTRUCTURE FINANCING .....................................28
NATIONAL LOGISTICS POLICY ..........................................30
MISCELLENOUS................................................................30
SOCIAL IMPACT BOND (SIB) .........................................31
INDIA REVOKES PEPSICO’S POTATO PATENT ................32
MOONLIGHTING ..........................................................33
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PREVIOUS YEARS QUESTIONS
Q.1) The Fair and Remunerative Price (FRP) of sugarcane is approved by the
a) Cabinet Committee on Economic Affairs

b) Commission for Agricultural Costs and Prices
c) Directorate of Marketing and Inspection, Ministry of Agriculture
d) Agricultural Produce Market Committee
Q.2) In India, markets in agricultural products are regulated under the
a) Essential Commodities Act, 1955

b) Agricultural Produce Market Committee Act enacted by States
c) Agricultural Produce (Grading and Marking) Act, 1937
d) Food Products Order, 1956 and Meat and Food Products Order, 1973
Q.3) The economic cost of food grains to the Food Corporation of India is
Minimum Support Price and bonus (if any) paid to the farmers plus
a) transportation cost only

b) interest cost only
c) procurement incidentals and distribution cost
d) procurement incidentals and charges for godowns
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ROLE OF AGRICULTURE IN INDIAN structure or system, both functional and

ECONOMY institutional, based on technical and
economic considerations and includes pre-
 Agriculture provides employment to around harvest and post-harvest operations of –
58% of the population. o Assembling,
 Gross Value Added by agriculture, forestry, o Grading,
and fishing was estimated at Rs. 19.48 lakh o Storage,
crore (US$ 276.37 billion) in FY20. o Transportation, and
 Share of agriculture and allied sectors in gross o Distribution.
value added (GVA) of India at current prices  An efficient marketing system is essential
stood at 17.8 % in FY20. to maintain and accelerate the pace of
 Indian food and grocery market is the world’s agricultural development and increase in
sixth largest, with retail contributing 70% of farmers income.
the sales. The Indian food processing industry  Special characteristics of agricultural
accounts for 32% of the country’s total food commodities which makes its marketing
market. challenging are:
 The Economic Survey of India 2020-21 report o Perishability of produce i.e. shorter
stated that in FY20, the total food grain shelf life
production in the country was recorded at o Seasonality of the production
296.65 million tonnes—up by 11.44 million o Variation in the quality of the
tonnes compared with 285.21 million tonnes products
in FY19. o Dependence on the Climatic
 For FY22, the government has set a record conditions
target for farmers to raise food grain o Small size of landholding and
production by 2% with 307.31 million tonnes scattered production
of food grains. In FY21, production was  In India different systems of agricultural
recorded at 303.34 million tonnes against a marketing are prevalent as mentioned
target of 301 million tonnes. below
 India is the world's second-largest producer of o Sale in Villages to the village
rice, wheat, sugarcane, cotton, groundnuts moneylenders and traders who
and fruits & vegetables. It also produced 25% may work independently or work as
of the world's pulses, as of last decade, until an agent of a bigger merchant of
2019. the nearby mandi.
 India is the largest producer of ginger, okra, o Sale in weekly village markets
potatoes, onions, brinjal, etc., amongst popularly known as ‘hat’
vegetables. o The third form of agricultural
marketing in India is to sell the
Agricultural Marketing
surplus produce though mandis
 Agricultural marketing essentially involves
located in various small and large
the buying and selling of agricultural
towns.
produce.
 There are nearly 1700
 It is a process which starts with a decision
mandis which are spread all
to produce a saleable farm commodity,
over the country.
and it involves all aspects of market
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 Farmers will have to carry provide effective price support to
their produce to the mandi farmers; (2) to procure and supply
and sell those produce to grains to PDS for distributing
the wholesalers with the subsidized staples to economically
help of brokers vulnerable sections of society; and
 These wholesalers again sell (3) keep a strategic reserve to
those farm produce to the stabilize markets for basic
mills and factories and to foodgrains.
the retailers who in turn sell o For constructing the network of
these goods to the warehouses in the town and
consumers directly in the mandis, the Central Warehousing
retail markets. Corporation has been set up in
o Another form of marketing is co- 1957. A network of rural godowns
operative marketing where will enable small farmers to store
marketing societies are formed by their produce and avoid distress
farmers to sell the output sales.
collectively to take the advantage o Agricultural Marketing
of collective bargaining for Infrastructure (AMI): It is a capital
obtaining a better price. investment subsidy sub-scheme
 Problems with regard to agricultural “Agricultural Marketing
marketing in India Infrastructure (AMI)” of Integrated
o Restrictive policies which prevents Scheme for Agricultural Marketing
private participation and fair price (ISAM) by Union Ministry of
discovery (i.e. excessive Agriculture & Farmers welfare
government interference in form of o E-NAM (National Agriculture
APMC Act) Market)
o Inadequate last mile connectivity to  It is an online trading
farms platform for agriculture
o Improper Warehouses produce aiming to help
o Lack of grading and standardisation farmers, traders, and
o Presence of large number of buyers with online trading
middlemen and getting a better price by
o Presence of unregulated markets smooth marketing.
despite government oversight  Small Farmers Agribusiness
o Inadequate market information Consortium (SFAC) is the
 In the meantime, the Government has lead agency for
taken following important steps for the implementing eNAM under
improvement of agricultural marketing in the aegis of Ministry of
India: Agriculture and Farmers’
o Food Corporation of India: Setup Welfare, Government of
under the Food Corporations Act India.
1964. FCI was mandated with  It provides single window
three basic objectives: (1) to services for all Agricultural
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Produce Market Committee  The government has
(APMC) related services and recently launched new
information. This includes features in the e-NAM
commodity arrivals, quality platform to strengthen
& prices, buy & sell offers & agriculture marketing
e-payment settlement  Warehouse-based
directly into farmers trading modules in
account, among other e-NAM software will
services. enable trade from
warehouses
according to e-NWR
(electronic
negotiable
warehouse receipt)
 Farmers Producers
Organisations
(FPOs) trading
module in e-NAM
enables FPOs to
trade their produce
from their collection
centres without
bringing the
produce to APMC.
o Farmer Producer Organisation: It is
a Producer Organisation (PO)
where the members are farmers. It
is a registered body and a legal
 Using the eNAM service, entity. Producers are shareholders
license for the trader, in the organization.
buyers and commission  Members of the FPO will
agents can be obtained manage their activities
from the state-level together in the organization
authorities without any pre- to get better access to
condition of physical technology, input, finance
presence or possession of and market for faster
shop or premises in the enhancement of their
market yard. income.
 Harmonisation of quality  Small Farmers’
standards of agricultural Agribusiness Consortium
products and infrastructure (SFAC) is providing support
for quality testing is made for the promotion of FPOs.
available in every market.
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
FPOs help in the o PM-KISAN Yojana
collectivization of farmers  The uninspiring
to give them the collective performance of PM-AASHA
strength to deal with such necessitated a more radical
issues. and direct approach which
 The government has evolved in PM-KISAN
launched a new dedicated scheme
Central Sector Scheme  This programme involved a
titled “Formation and fixed payment of ₹6,000
Promotion of Farmer per annum to each farm
Producer Organizations household with a
(FPOs)” with a clear budgetary outlay of
strategy and committed ₹75,000 crore.
resources to form and  This programme has
promote 10,000 new FPOs. worked reasonably well so
o PM-AASHA far with many States
 Since e-NAM did not yield topping up the amount at
expected results, the their end.
government reverted back
to public price A brief history of Agriculture Produce Market
support measures through Committees (APMCs)
PM-AASHA
 The main objective of this  The pre-APMCs days were dominated
programme was to provide by misinformation and price arbitrage.
an assured price to farmers Traders with better communications
that ensured a return of at between themselves got a sense of
least 50% more than the prevailing prices and used this
cost of cultivation. information to their advantage.
 The programme was  APMCs were thought to be the answer
confined to pulses and to these problems.
oilseeds to limit the fiscal  APMCs were institution created for
costs, although many other price discovery through a competitive
crops, which did not auction process, proper weighing,
receive the benefits of the payment on time, quality grading, etc
MSP-procurement system,  Institutional and physical infrastructure
also needed this coverage. were set up to ensure that all farm
 Public procurement, produce was brought to the designated
deficiency payments and markets, traders with licences were
private procurement were allowed to participate in auctions of
the main planks of this graded produce and timely payments
programme were made.
 Market yards and market committees
were set up at the district and sub-
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district levels to cater to farmers in  PDS is operated under the joint
every part of country. responsibility of the Central and the
 These changed the market dynamics (at State/UT Governments.
least, partially) in favour of the farmers o The Central Government, through
in the early day Food Corporation of India (FCI),
has assumed the responsibility for
procurement, storage,
transportation and bulk allocation
What went wrong with APMCs? of food grains to the State
Governments.
 APMCs were democratic institutions
o The operational responsibility
managed by a board/committee of
including allocation within State,
mostly elected members from among
identification of eligible families,
the farmers and traders.
issue of Ration Cards and
 The state governments, obsessed with
supervision of the functioning of
revenue collection, found it convenient
Fair Price Shops (FPSs) etc., rest
to supersede these boards and appoint
with the State Governments.
administrators for long periods of time
 It distributes subsidized food and non-
 Over time, they ceased to represent
food items to India’s poor.
farmers’ interests.
o Under the PDS, presently the
 APMC system somehow deteriorated
commodities namely wheat, rice,
into a cartelised operation (licensing
sugar and kerosene are being
becoming the tool); cess collection
allocated to the States/UTs for
became an obsession, and price
distribution.
discovery and transparency were side
o Some States/UTs also distribute
stepped
additional items of mass
 APMCs, undisputedly, created market
consumption through the PDS
infrastructure, and used the cess
outlets such as pulses, edible oils,
collections to improve agrarian
iodized salt, spices, etc
infrastructure. However, now they had
no interest in investing beyond their
Revamped Public Distribution System (RPDS):
market yards.
 RPDS was launched in June, 1992 with a
view to strengthen and streamline the
PDS as well as to improve its reach in the
PUBLIC DISTRIBUTION SYSTEM
far-flung, hilly, remote and inaccessible
The Public Distribution System (PDS) evolved as a areas where a substantial section of the
system of management of scarcity through poor live.
distribution of foodgrains at affordable prices.  Food grains for distribution in RPDS areas
 PDS is supplemental in nature and is not were issued to the States at 50 paise
intended to make available the entire below the Central Issue Price.
requirement of any of the commodities o The Central Issue Price is the price
distributed under it to a household or a at which centre allocates food
section of the society. grains to the states.
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 The RPDS included amongst the number of BPL families
o Area approach for ensuring covered under TPDS within the States and
effective reach of the PDS providing them food grains at a highly
commodities subsidized rate of Rs.2/- per kg. for wheat
o Delivery by State Governments at and Rs.3/- per kg for rice.
the doorstep of FPSs in the  The States/UTs were required to bear the
identified areas distribution cost, including margin to
o Additional ration cards to the left dealers and retailers as well as the
out families transportation cost. Thus the entire food
o Infrastructure requirements like subsidy was passed on to the consumers
additional Fair Price Shops, under the scheme.
storage capacity etc.  The AAY Scheme has since expanded to
o Additional commodities such as cover 2.50 crore poorest of the poor
tea, salt, pulses, soap, etc. for households
distribution through PDS outlets.
Working of PDS
Targeted Public Distribution System (TPDS):
 Under TPDS, beneficiaries were divided
into two categories: Households below
the poverty line or BPL; and Households
above the poverty line or APL.
 TPDS aims at providing food grains to
people below the poverty line at highly
subsidised prices from the PDS and food
grains to people above the poverty line at
much higher prices than the poverty line
 Thus, the TPDS maintains the universal
character of the PDS but adds a special
focus on the people below the poverty
line (known as BPL).
 The distinguishing feature is that the PDS
now has dual central issue prices: (i)
Prices for BPL consumers and (ii) Prices
for APL consumers. A third price,
introduced in 2001, is for beneficiaries of
the Antyodaya Anna Yojana (AAY).
Antyodaya Anna Yojana (AAY):  The method of licensing FPSs and

 AAY was a step in the direction of making monitoring compliance through vigilance
TPDS aim at reducing hunger among the committees and other government
poorest segments of the BPL population. officials are elaborately discussed in the
 AAY involved identification of one crore PDS Control Order 2001 (GOI 2001), issued
poorest of the poor families from
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by Ministry of Consumer Affairs, Food and  Identification of poor by the states is not
Public Distribution, Government of India. fool proof. A large number of poor and
 The FCI purchases food grains from needy persons are left out and a lot of fake
farmers at the minimum support price cards are also issued.
(MSP) and issues food grain at a uniform  Diversion of Food grains by Fair Price Shops
central issue price (CIP) to all states. holder and mediator.
 The CIP is lower than the economic cost  Many times, good quality food grains are
incurred by the central government to replaced with poor quality cheap food
procure food grains.
 The main components of economic cost  Public distribution system includes only
include payment to growers and costs few food grains such as wheat and rice, it
for transporting, handling, storing and does not fulfil the requirement of complete
distributing the grain, in addition to the nutrition.
cost of maintaining the prescribed buffer  Procuring states such as Punjab and
stock. Haryana are under environmental stress,
 The difference between the economic cost including rapid groundwater depletion,
and the CIP is the food subsidy borne by deteriorating soil and water conditions
the central government from its annual from overuse of fertilisers.
non-Plan budget.
 Buffer Stock
Problems with PDS  Buffer stock refers to a reserve of a
 Uneven distribution of Food generations, commodity that is used to offset price
procurement and distribution. The fluctuations and unforeseen
benefits of procurement have not gone to emergencies. It is generally maintained
larger number of farmers beyond a few for essential commodities and
states. necessities like food grains, pulses etc.
o For example: Major part of wheat is  The concept of buffer stock was first
procured from Punjab and introduced during the 4th Five Year
Haryana. To transport food grains Plan (1969-74)
from Punjab to far flung areas in  At present, the Government of India
North east will entail cost and time prefers to use the term – Food grain
both. stocking norms – which refers to the
 Inadequate storage capacity with FCI. level of stock in the Central Pool that is
 Unscientific warehouse management sufficient to meet the operational
given the increasing procurement and requirement of food grains and
incidents of rotting food grains exigencies at any point of time.
 The storage of foodgrains inculcates high  The Cabinet Committee on Economic
carrying costs on the government. Affairs fixes the minimum buffer norms
 Open-ended Procurement i.e., all incoming on quarterly basis: i.e. as on 1st April,
grains accepted even if buffer stock is 1st July, 1st October and 1st January of
filled, creates a shortage in the open every financial year
market.
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Importance of PDS
 Ensures Food and Nutritional Security of
the nation.
 Helped in stabilising food prices
 Made food available to the poor at
affordable prices.
 It maintains the buffer stock of food grains
in the warehouse so that the flow of food
remains active even during crisis period.
 Redistribution of grains by supplying food
from surplus regions of the country to
deficient regions.
PDS Reforms
 Wadhwa Committee, appointed by the
Supreme court, found that certain states
 Presently stocking norms fixed by had implemented computerisation and
Government of India vide OM dated other technology-based reforms to TPDS.
22.01.2015 comprise: Technology-based reforms helped plug
 Operational stocks: for meeting leakages of food grains during TPDS.
monthly distributional requirement  Integrating Aadhar with TPDS will help in
under TPDS and Other Welfare better identification of beneficiaries and
Schemes (OWS) address the problem of inclusion and
 Food security stocks/reserves: for exclusion errors.
meeting shortfall in procurement. o Tamil Nadu implements a universal
 Stocking norms are for a quarter and PDS, such that every household is
consist of operational stock for the entitled to subsidised food grains
quarter and strategic reserve to take thus minimising identification
care of short fall in production or errors
natural calamities.  Digitisation of ration cards done by states
 Department of Food and Public like Chhattisgarh, Tamil Nadu, Madhya
Distribution will offload excess stock in Pradesh, Karnataka etc. It allows for online
the domestic market through open entry and verification of beneficiary data.
sale, through exports or additional  Computerises FPS allocation, declaration
allocation to states of stock balance, web-based truck challans,
 Also, from 2015, Government has etc. allows for quick and efficient tracking
decided to create a buffer stock of 1.5 of transactions
lakh tonnes of pulses to control  Issue of smart cards in place of ration cards
fluctuation in their prices. NAFED, SFAC done in states like Haryana Andhra
and FCI will procure pulses for buffer Pradesh etc. It stores data such as name,
stock. address, biometrics, BPL/APL category and
monthly entitlement of beneficiaries and
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family members thus preventing transparent liquidation policy was
counterfeiting. suggested which should automatically
 Use of GPS Technology by states like kick-in when FCI is faced with surplus
Chhattisgarh, Tamil Nadu to track stocks than buffer norms
movement of trucks carrying food grains  It recommends total end to end
from state depots to FPS computerization of the entire food
 SMS based monitoring by states like management system, starting from
Chhattisgarh, Tamil Nadu, allows procurement from farmers, to stocking,
monitoring by citizens so they can register movement and finally distribution
their mobile numbers and send/receive through TPDS
SMS slerts during dispatch and arrival of  It recommends that farmers be given
TPDS commodities direct cash subsidy (of about Rs
7000/ha) and fertilizer sector can then
Shanta Kumar Committee Recommendations be deregulated.
 High Level Committee (HCL) on

restructuring of Food Corporation of National Food Security Act, 2013
India (FCI) was constituted by GoI in
2014 under the chairmanship of Shanta The NFSA provides a legal right to persons
Kumar. belonging to “eligible households” to receive
foodgrains at subsidised price– rice at Rs 3/kg,
 The major issue before the Committee
was how to make the entire food grain wheat at Rs 2/kg and coarse grain at Rs 1/kg —
management system more efficient by under the Targeted Public Distribution System
reorienting the role of FCI in MSP (TPDS).
 Beneficiaries: Under sub-section (1) of
operations, procurement, storage and
distribution of grains under Targeted Section 3 of the Act, the term “eligible
Public Distribution System (TPDS). households” comprises two categories —
“priority households”, and families
Key Recommendations covered by the Antyodaya Anna Yojana
(AAY).
 FCI hand over all procurement  Ministry involved: Ministry of Consumer
operations of wheat, paddy and rice to Affairs, Food & Public Distribution.
states that have gained sufficient  Coverage: The Act has prescribed the
experience in this regard and have coverage under “eligible households” —
created reasonable infrastructure for 75% of the rural population and up to 50%
procurement. FCI will accept only the of the urban population. On the basis of
surplus (after deducting the needs of Census 2011 figures and the national rural
the states under NFSA) from these and urban coverage ratios, 81.35 crore
state governments (not millers) to be persons are covered under NFSA
moved to deficit states. currently.
 On an average, buffer stocks with FCI  State-wise coverage: Corresponding to
have been more than double the buffer the all India coverage of 75% and 50% in
stocking norms. Therefore, a the rural and urban areas respectively,
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State-wise coverage will be determined by Redressal Officer, penalty will be imposed
the Central Government. by the State Food Commission according
o State-wise coverage has been to the provision.
determined by the Planning
Commission on the basis of 2011-
12 NSSO Household Consumption Recent NITI Aayog proposals:
Expenditure Survey data.
 Benefits: Priority households are entitled  Revision of Coverage Ratios: NITI
to receive 5 kg of foodgrains per person Aayog has suggested that the national
per month, whereas AAY households are rural and urban coverage ratio be
entitled to 35 kg per month at the same reduced from the existing 75-50 to 60-
prices. 40. if this reduction happens, the
 Nutritional Support to women and number of beneficiaries under the
children: There is a special focus in the Act NFSA will drop to 71.62 crore (on the
on nutritional support to pregnant women basis of the projected population in
and lactating mothers and children upto 2020).
14 years of age by entitling them to  Revision of CIP: A revision of CIPs is
nutritious meals. one of the issues that have been
 Cash Maternity Benefit: Pregnant women discussed by NITI Aayog.
will also be entitled to receive cash
maternity benefit of Rs. 6, 000 in order to
partly compensate her for the wage loss
What is the implication of the revision for
during the period of pregnancy and also to
the Centre and the states?
supplement nutrition.
 Women Empowerment: For the purpose  To make these changes in the law, the
of issuing of ration cards, eldest woman of government will have to amend sub-
the household of age 18 years or above is section (2) of Section 3 of the NFSA.
to be the head of the household. For this, it will require parliamentary
 Grievance redressal mechanism available approval
at the District and State levels.  Saving in Food Subsidy Bill: If the
 Food Security Allowance: In case of non- national coverage ratio is revised
supply of entitled food grains or meals, downward, the Centre can save up to
there is a provision for food security Rs 47,229 crore (as estimated by the
allowance to entitled beneficiaries. NITI Aayog paper). However, the move
 Transparency and Accountability: In may be opposed by some of the
order to ensure transparency and states.
accountability, provisions have been made  Increased fiscal burden if not revised:
for disclosure of records relating to PDS, On the other hand, if the rural-urban
social audits and setting up of Vigilance coverage ratio remains at 75-50, then
Committees. the total number of people covered
 Penalty: If the public servant or authority will increase from the existing 81.35
fails to comply with the relief crore to 89.52 crore that will result in
recommended by the District Grievance
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an additional subsidy requirement of organised retailers, processors or
Rs 14,800 crore exporters) to pay
What is the basis of MSP then?

MINIMUM SUPPORT PRICE (MSP)  It is only a government policy that is part of
administrative decision-making.
 MSP is the price set by the government to
 The government declares MSPs for crops,
purchase crops from the farmers,
but there’s no law mandating their
whatever may be the market price for the
implementation
crops.
 The Centre currently fixes MSPs for 23 farm
 MSP is declared by Cabinet Committee on
commodities based on the CACP’s
Economic Affairs before the sowing time
recommendations —
on the basis of the recommendations of
o 7 cereals – paddy, wheat, maize,
the Commission for Agricultural Costs and
bajra, jowar, ragi and barley
Prices (CACP)
o 5 pulses – chana, arhar/tur, urad,
 Support prices generally affect farmers’
moong and masur
decisions indirectly, regarding land
o 7 oilseeds – rapeseed-mustard,
allocation to crops, quantity of the crops to
groundnut, soyabean, sunflower,
be produced etc
sesamum, safflower and nigerseed
 MSP assures farmers agricultural income
o 4 commercial crops – cotton,
besides providing a clear price signal to the
sugarcane, copra and raw jute
market
 CACP itself is not any statutory body but is
 The major objectives are to support the
an attached office of the Ministry of
farmers from distress sales and to procure
Agriculture and Farmers Welfare. It can
food grains for public distribution.
recommend MSPs, but the decision on
fixing (or even not fixing) and enforcement
Is there any legal backing for MSP?
rests finally with the government.
 The National Food Security Act, 2013
(NFSA), provides a legal basis for the public
What is speciality about Sugarcane crop?
distribution system (PDS) that earlier
 The only crop where MSP payment has
operated only as a regular government
some statutory element is sugarcane
scheme.
 This is due to its pricing being governed by
 The NFSA made access to the PDS a right,
the Sugarcane (Control) Order, 1966 issued
entitling every person belonging to a
under the Essential Commodities Act.
“priority household” to receive food grains
 That order, in turn, provides for the
at cheaper rates
fixation of a ‘fair and remunerative price’
 MSP, by contrast, is devoid of any legal
(FRP) for cane during every sugar year
backing. Access to MSP, unlike subsidised
(October-September).
grains through the PDS, isn’t an
 But even the FRP — which, incidentally,
entitlement for farmers. They cannot
was until 2008-09 called the ‘statutory
demand it as a matter of right.
minimum price’ or SMP — is payable not
 The government can procure at the MSPs
by the government.
if it wants to. There is no legal compulsion.
Nor can it force others (private traders,
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 The responsibility to make FRP payment to
farmers within 14 days of cane purchase What is Procurement Price?
lies solely with the sugar mills.  Sometimes, the government procures at a
higher price than the MSP. Here, the price
Has there been any move to give MSP legislative will be referred as procurement price.
backing?  The procurement price will be announced
 The CACP, in its price policy report for the soon after the harvest.
2018-19 kharif marketing season, had  Normally, the procurement price will be
suggested enactment of a legislation higher than the MSP, but lower than the
conferring on farmers ‘The Right to Sell at market price.
MSP’.  The price at which the procured and buffer
 This, it felt, was necessary “to instil stocke food grains are provided through
confidence among farmers for the PDS is called as issue price.
procurement of their produce”.
 That advice was however not accepted by
government.
GOVERNMENT INITIATIVES, POLICIES AND
MEASURES
National Mission for  It is one of the eight Missions outlined under National Action Plan on
Sustainable Climate Change (NAPCC).
Agriculture (NMSA)  NMSA has been formulated for enhancing agricultural productivity
especially in rainfed areas focusing on integrated farming, water use
efficiency, soil health management and synergizing resource
conservation.
 The focus of NMSA will be to infuse the judicious utilization of
resources of commons through community based approach.
Paramparagat Krishi  It is an initiative to promote organic farming in the country, was

Vikas Yojana (PKVY) launched by the NDA government in 2015.
 According to the scheme, farmers will be encouraged to form groups
or clusters and take to organic farming methods over large areas in the
country.
Pradhan Mantri Fasal  It provides a comprehensive insurance cover against failure of the crop
Bima Yojana (PMFBY) thus helping in stabilising the income of the farmers.
 All food & oilseed crops and annual commercial/horticultural crops for
which past yield data is available.
 Premium: The prescribed premium is 2% to be paid by farmers for all
Kharif crops and 1.5% for all rabi crops. In the case of annual
commercial and horticultural crops, the premium is 5%.
o Premium cost over and above the farmer share was equally
subsidized by States and GoI.
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o However, GoI shared 90% of the premium subsidy for North
Eastern States to promote the uptake in the region.
 The scheme was compulsory for loanee farmers availing Crop
Loan/Kisan Credit Card (KCC) account for notified crops and voluntary
for others.
 To assess crop losses, satellite imagery, remote-sensing technology,
drones, artificial intelligence and machine learning are used.
 The Scheme covers over 5.5 crore farmer applications on average per
year.
 Aadhar seeding) has helped in speedy claim settlement directly into
the farmer accounts.
In order to ensure more efficient and effective implementation of the

scheme, the central government had revamped PMFBY in the 2020 Kharif
season called PMFBY 2.0
 Enrolment 100% voluntary for all farmers from 2020 Kharif.

 The government has given the flexibility to states/UTs to implement
PMFBY and given them the option to select any number of additional
risk covers/features.
 Insurance companies have to now spend 0.5% of the total premium
collected on information, education and communication (IEC)
activities.
Gramin Bhandaran  It is an Indian government initiative to offer subsidies to individuals or

Yojana organizations which build or repair rural godowns.
Agriculture  It is a pan-India Central Scheme to inject formal credit into farm and
Infrastructure Fund farm-processing based activities.
 Aim: To provide medium - long term debt financing facility for
investment in viable projects for post-harvest management
Infrastructure and community farming assets.
 The funds will be provided for setting up of cold stores and chains,
warehousing, silos, assaying, grading and packaging units, e-marketing
points linked to e-trading platforms and ripening chambers, besides
PPP projects for crop aggregation sponsored by central/state/local
bodies.
 Duration: Financial Year 2020 to 2029.
 Rs. 1 Lakh Crore will be provided by banks and financial institutions as
loans to Primary Agricultural Credit Societies (PACS), Cooperatives,
FPOs, Agri-entrepreneurs and Central/State agencies or Local Bodies
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 Loans will have interest subvention of 3% per annum up to a limit of
Rs. 2 crore. This subvention will be available for a maximum period of
seven years.
 The fund will be managed and monitored through an online
Management Information System (MIS) platform. It will enable all the
qualified entities to apply for loan under the Fund.
 It was It is a part of the over Rs. 20 lakh crore stimulus package
announced in response to the Covid-19 crisis.
Agricultural  It is a centrally sponsored scheme that is being implemented since

Technology 2005.
Management  It is also known as Support to State Extension Programs for Extension
Agency (ATMA) Reforms
 It aims at making extension system farmer driven and farmer
accountable by disseminating technology to farmers through new
institutional arrangements viz. Agricultural Technology Management
Agency (ATMA) at district level to operationalize the extension reforms
on a participatory mode
 The scheme looks to set up a decentralized agriculture extension
system. It provides grants in aid to state governments to enable the
availability of latest technologies, training in good practices, etc. for the
farmers.
AGMARKNET  Agmarknet portal is a govt. of India portal on agricultural marketing

connecting agricultural markets, State Marketing boards/Directorates
and also providing linkages to the websites of the important National
and International Organisations
 AGMARKNET is a NICNET (National Informatics Centre Network) for
transmission of market price to State Agricultural Marketing
Board/Directorate for analysis.
 Price information available on the AGMARKNET portal is shared with
IFFCO Kisan Sanchar Limited (IKSL).
 IKSL is providing the price information to the farmers through Voice
Mail and SMS through Mobile Phones free of cost
Mission for  Horticulture is the branch of plant agriculture dealing with garden
Integrated crops, generally fruits, vegetables, and ornamental plants.
Development of  M.H. Marigowda is considered the Father of Indian Horticulture.
Horticulture (MIDH)  The Ministry of Agriculture and Farmers Welfare is implementing
MIDH with effect from 2014-15.
 MIDH is implemented under Green Revolution - Krishonnati Yojana.
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 Under MIDH, Government of India (GoI) contributes 60% of total outlay
for developmental programmes in all the states except states in North
East and Himalayas, 40% share is contributed by State Governments.
 In the case of North Eastern States and Himalayan States, GoI
contributes 90%.
 MIDH has played a significant role in increasing the area under
horticulture crops. During the year 2019-20, the country recorded its
highest ever horticulture production of 320.77 million tonnes.
SOME OF THE RECENT GOVERNMENT manufacturing champions commensurate

INITIATIVES IN AGRICULTURE SECTOR ARE AS with India's natural resource endowment and
FOLLOWS: to support Indian food brands in international
 Ministry of Civil Aviation launched the Krishi markets.
UDAN 2.0 scheme in October 2021. The  As per Union Budget 2021-22, Rs. 4,000 crore
scheme proposes assistance and incentive for (US$ 551.08 million) was allocated towards
movement of agri-produce by air transport. implementing Pradhan Mantri Krishi
o The Krishi UDAN 2.0 will be Sinchayee Yojana (PMKSY).
implemented at 53 airports across o Out of about 141 m.Ha of net area
the country, largely focusing on sown in the country, about 65
Northeast and tribal regions, and is million hectare (or 45%) is
expected to benefit farmers, freight presently covered under irrigation.
forwarders and airlines. Substantial dependency on rainfall
 In October 2021, the Union Ministry of makes cultivation in unirrigated
Agriculture and Farmers Welfare announced areas a high risk, less productive
that 820,600 seed mini-kits will be distributed profession.
free of cost in 343 identified districts across 15 o Launched in 2015, the overreaching
major producing states under a special vision of PMKSY is to ensure access
programme. to some means of protective
 In September 2021, Prime Minister Mr. irrigation to all agricultural farms in
Narendra Modi launched 35 crop varieties the country, to produce ‘per drop
with special traits such as climate resilience more crop’, thus bringing much
and higher nutrient content. desired rural prosperity.
 The Indian government has initiated Digital  Under Pradhan Mantri Formalisation of Micro
Agriculture Mission for 2021-25 for Food Processing Enterprises (PM FME), an
agriculture projects based on new outlay of Rs. 10,000 crore (US$ 1.34 billion)
technologies such as artificial intelligence, over a period of five years from FY21 to FY25
block chain, remote sensing and GIS has been sanctioned.
technology, drones, robots and others.  The Agriculture Export Policy, 2018 was
 With a budget of US$ 1.46 billion, the approved by the Government of India in
‘Production-Linked Incentive Scheme for December 2018. The new policy aimed to
Food Processing Industry (PLISFPI)’ has been
approved to develop global food
www.iasbaba.com 17

increase India’s agricultural export to US$ 60
billion by 2022 and US$ 100 billion in the
next few years with a stable trade policy
regime.
 Government plans to triple the capacity of
food processing sector in India from the
current 10% of agriculture produce and has
also committed Rs. 6,000 crore ( US$ 793
million) as investments for mega food parks
in the country, as a part of the Scheme for
Agro-Marine Processing and Development
of Agro-Processing Clusters (SAMPADA).
 The Government of India has allowed 100%
FDI in marketing of food products and in
food product E-commerce under the
automatic route.
20th Livestock Census

o Ministry of Fisheries, Animal Husbandry
and Dairying released the 20th Livestock
Census report in 2019.
o The Livestock Census has been contrary, the population of total
conducted in the country periodically exotic/crossbred cattle has
since 1919-20. Since then it has been increased by 26.9 per cent in 2019
conducted once every 5 years. as compared to previous census.
o It covers all domesticated animals and  It also shows that the cow belt of the
their headcounts. country has shifted eastwards with West
o The household-level data through online Bengal emerging as a state with the
transmission from the field has been used largest cattle population, leaving behind
for the first time in 20th Livestock Census. Uttar Pradesh.
 A spectacular 16.8 per cent increase in the
 The total Livestock population is 535.78 poultry population in the country to
million in the country showing an increase 851.81 million, mainly on account of a 46
of 4.6% over Livestock Census-2012. per cent rise in backyard poultry birds,
 As compared to the previous census, the whose numbers have gone up to 317
percentage of sheep and goats has million.
increased whereas the percentage of  The number of female cattle is 145.12
cattle, buffaloes and pigs has marginally million, which is 18 per cent over the
declined. 122.98 million in 2012. The number of
 The census shows a further decline in the male cattle, on the other hand, dropped
indigenous cattle population. to 47.4 million as against 67.92 million in
 There is a 6 per cent decline in the 2012.
total number of indigenous cattle  Significantly the male to female
over the previous census. On the cattle ratio in the 2019 survey
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dropped to 1:3 from 1:1.8 in the is the only source of nutrition required for
2012 livestock survey. survival. Livestock has an important
contribution for food supply of rural and
STATE REPORT urban areas and contributes to the family
nutrition, supplying animal protein.
 Uttar Pradesh has the highest number of
livestock of 67.8 million (68.7 million in However, there are problems like –
2012)  Poor Quality breeds
 Rajasthan: 56.8 million (57.7 million)  Shrinking pasteur land
 Madhya Pradesh: 40.6 million (36.3  Low productivity of dairy- which could be
million) improved by using scientific method
 West Bengal: 37.4 million (30.3 million)  There is a huge deficit of good quality
fodder
Significance of livestock rearing  Spread of disease among the cattle
 Labour: A distress farmer cannot afford
 There is an excessive number of
mechanised farming. For him cattle unproductive animals which compete with
provide the service of labour. They help in productive dairy animals in the utilisation
very crude form of mechanised farming of available feeds and fodder.
for small and marginal farmers.  Late maturity, in most of the Indian cattle
 Reliable source of income: Unlike farm
breeds, is a common problem. The calving
crops, livestock do not easily suffer from interval is on the increase resulting in a
monsoon failure or such other natural reduction in efficiency of animal
calamity. They continue to provide milk, performance.
eggs, etc. in almost all weather conditions.  Veterinary health care centres are located
Every part of livestock carries economic in far off places. The ratio between cattle
importance such as leather, wool, meat, population and veterinary institution is
etc. wider, resulting in inadequate health
 Diversification of sources of income for
services to animals. (Foot and Mouth
farmers is one of the few suggested disease)
solutions for increasing agricultural  Many cattle owners do not provide proper
distress in India. Here, livestock plays an shelter to their cattles leaving them
important role for a distress farmer. exposed to extreme climatic conditions.
 Reduces input cost: Dung and other
 Unsanitary conditions of cattle shed and
remnants of livestock act as green milking yards, leads to mastitis conditions
manure, a substitute to fertilisers. They  Lack of proper farmer-industry
also help in weed control without using connectivity
chemicals or others costly and hazardous  A low number of APEDA-
methods. approved abattoir
 An asset: Livestock are important asset
 High export duty on raw salted hides
for a distress farmer which can be  Lack of R&D in the sector
encashed at any moment and may help
him to come out of debt trap.
 Nutritional security: For a distressed
farmer’s family, food provided by livestock
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EDIBLE OIL SECTOR IN INDIA NATIONAL MISSION ON EDIBLE OILS – OIL PALM
(NMEO-OP)
What is the State of Edible Oil Sector in India?
 Place in Country’s Economy: Context: PM flags high import bill of edible oils
o India is one of the largest and fertilisers.
producers of oilseeds in the world.  It is a new Centrally Sponsored Scheme
o Oil sector occupies an important with a special focus on the Northeast
position in the agricultural region and the Andaman and Nicobar
economy. Islands.
o It accounts for the estimated  A financial outlay of Rs.11,040 crore has
production of 36.56 mt of nine been made for the scheme, out of which
cultivated oilseeds during the year Rs.8,844 crore is the Government of India
2020-21 as per the data released share and Rs.2,196 crore is State share
by the Ministry of Agriculture. and this includes the viability gap funding
o India is the world's second-largest also.
consumer and number one  The Mission hopes to increase oil palm
importer of vegetable oil. acreage by an additional 6.5 lakh hectares
 The present rate of edible by 2025-26 and grow production of crude
oil consumption in India palm oil to 11.2 lakh tonnes by 2025-26
surpasses the domestic and up to 28 lakh tonnes by 2029-30.
production rate. Hence,  This is the first time the Centre will give oil
the country has to rely on palm farmers a price assurance, with the
imports to meet the gap industry mandated to pay the viability gap
between demand and funding of 14.3% of crude palm oil prices.
supply.  The proposed scheme will subsume the
 At present, India meets current National Food Security Mission-Oil
nearly 55% to 60% of its Palm programme.
edible oil demand through About Palm Oil
imports. Therefore, India  It’s an edible vegetable oil that comes
needs to be independent in from the fruit of oil palm trees, having the
oil production to meet the scientific name Elaeis guineensis.
domestic consumption  Palm oil is an incredibly efficient crop,
demand. producing more oil per land area than any
 Palm oil (Crude + Refined) other equivalent vegetable oil crop
constitutes roughly around fulfilling 35% of the world’s vegetable oil
62% of the total edible oils demand on just 10% of the land.
imported and are imported  Two types of oil can be produced, crude
mainly from Indonesia and palm oil comes and palm kernel oil, of
Malaysia, while Soyabean which crude has more demand.
oil (22%) is imported from  Palm oil is an extremely versatile oil that
Argentina and Brazil and has many different properties and is
Sunflower oil (15%) is present in nearly 50 per cent packaged.
imported mainly from  Palm oil is a major driver of deforestation
Ukraine and Russia. of some of the world’s most biodiverse
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forests, destroying the habitat of already vegetable oil and to change the
endangered species like the Orangutan, negative image of palm oil.
pygmy elephant and Sumatran rhino.  Membership of APOA would be further
expanded to include companies or
Asian Palm Oil Alliance industry bodies associated with
production or refining of palm oil
The apex edible oil industry associations from across the continent.
five major palm oil importing countries of Asia
-- India, Pakistan, Sri Lanka, Bangladesh and
Nepal -- have come together to form the INVESTMENT
Asian Palm Oil Alliance (APOA).
 GDP = C + I + G + NX
 APOA held its first general body  Thus investment, ‘I’ is everything that remains
meeting on the sidelines of the Globoil of total expenditure after consumption,
Summit being held at Agra, India and government spending, and net exports are
the next meeting is expected to be held subtracted (i.e. I = GDP − C − G − NX). [I
in Indonesia early next year 2023. corresponds to gross investment.]
 Globoil Summit is one of the World’s  Investment is a function of Income and Rate
Leading Edible Oils and Agri Trade of Interest [I=f(Y,r)]. Higher the income, the
Conference, Exhibitions & Awards. more will be the investment; higher the rate of
o 2022 also marks the 25th year interest the lesser will be the investment.
celebration of Globoil India.  More Income->More Savings->More
Investment->More Income.
About APOA  No investment->No Growth->Poverty,
Malnutrition, Unemployment etc.
 The APOA aims is safeguarding the
economic and business interests of the
palm oil consuming countries and will
work towards increasing the
consumption of palm oil in member
countries.
 The alliance would work towards
ensuring that palm oil is recognised as
a high-quality, economical, and healthy
INVESTMENT MODELS
TYPE FEATURES
Public  In this model Government requires revenue for investment that mainly comes
Investment through taxes.
Model  As the world is facing the prospect of an extended period of weak economic
growth, by enhancing public-sector investment large pools of savings can be
channelized into productivity.
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 Properly targeted public investment can do much to boost economic
performance, generating aggregate demand quickly, fuelling productivity growth
by improving human capital, encouraging technological innovation, and
crowding in private-sector investment.
 Though public investment cannot fix a large demand shortfall overnight, it can
accelerate the recovery and establish more sustainable growth patterns.
Private  Presently tax revenue of India is not adequate so government requires private
Investment investment.
Model  Private investment can be source from domestic or international market.
 From abroad private investment comes in the form of FDI or FPI.
 Private investment can generate more efficiency by creating more competition,
realization of economies of scale and greater flexibility than is available to the
public sector.
Public-Private  PPP is an arrangement between government and private sector for the provision
Partnership of public assets and/or public services.
Model  PPP allow large-scale government projects, such as roads, bridges, or hospitals,
to be completed with private funding.
 In this type of partnership, investments are undertaken by the private sector
entity, for a specified period of time.
 These partnerships work well when private sector technology and innovation
combine with public sector incentives to complete work on time and within
budget.
 As PPP involves full retention of responsibility by the government for providing
the services, it doesn’t amount to privatization.
 There is a well-defined allocation of risk between the private sector and the
public entity.
 Private entity is chosen on the basis of open competitive bidding and receives
performance linked payments.
 PPP route can be alternative in developing countries where governments face
various constraints on borrowing money
 It can also give required expertise in planning or executing large projects.
 Types of PPP are –
1. BOT (Build-Operate-Transfer)
 It is conventional PPP model in which private partner is responsible to
design, build, operate (during the contracted period) and transfer back
the facility to the public sector.
 Private sector partner has to bring the finance for the project and take
the responsibility to construct as well as maintain it.
 Public sector will allow private sector partner to collect revenue from
the users.
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 The national highway projects contracted out by NHAI under PPP mode
is a major example for the BOT model.
2. BOO (Build-Own-Operate)
 In this model ownership of the newly built facility will rest with the
private party.
 On mutually agreed terms and conditions public sector partner agrees
to ‘purchase’ the goods and services produced by the project.
3. BOOT (Build–own–operate–transfer)
 In this variant of BOT, after the negotiated period of time, project is
transferred to the government or to the private operator.
 It is used for the development of highways and ports.
4. BOLT (Build-Operate-Lease-Transfer)
 In this approach, the government gives a concession to a private entity
to build a facility (and possibly design it as well), own the facility, lease
the facility to the public sector and then at the end of the lease period
transfer the ownership of the facility to the government.
5. DBFO (Design-Build-Operate-Transfer)
 In this model, entire responsibility for the design, construction, finance,
and operation of the project for the period of concession lies with the
private party.
6. LDO (Lease-Develop-Operate)
 Either the government or the public sector entity retains ownership of
the newly created infrastructure facility and receives payments in terms
of a lease agreement with the private promoter.
7. Hybrid Annuity Model (HAM)
 HAM combines 40% EPC and 60% BOT-Annuity.
 It was introduced in January 2016 to recover investments in road
infrastructure projects
 The government will contribute to 40% of the project cost in the first
five years through annual payments (annuity). The balance 60 per cent
is arranged by the developer, and is recovered as variable annuity
amount after the completion of the projec
 Risk Sharing: The private partner continues to bear the O&M risks, but
the financing risk is now shared with government as the government
pays 40% during the construction stage. The government also shoulders
the responsibility of revenue collection. Hence not one entity takes
burden of all risk and hence all are comfortable with this model.
Factors affecting Investment Sentiments  Inflation.

 Savings Rate.  Rate of Interest in Banks.
 Tax Rate in the country. (Net income available  Possible Rate of Return on Capital.
after tax).
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 Availability of other factors of production –  Market size and stability.
cheap land, labour etc and supporting  Investment friendly environment in the
infrastructure – transport, energy and country (policies of the government).
communication.
INFRASTRUCTURE SCHEMES
URBAN DEVELOPMENT
SCHEME FEATURES
Pradhan Mantri  By Ministry of Housing and Urban Poverty Alleviation (MoHUPA).
Awas Yojana –  It envisions provision of Housing for All by 2022, when the Nation completes 75
Urban years of its Independence.
 Beneficiaries include Economically weaker section (EWS), low-income
groups (LIGs) and Middle Income Groups (MIGs).
 “Housing for All” Mission for urban area is being implemented during 2015-
2022 and this Mission will provide central assistance to implementing agencies
through States and UTs for providing houses to all eligible families/beneficiaries
by 2022.
 Mission will be implemented as Centrally Sponsored Scheme (CSS) except for
the component of credit linked subsidy which will be implemented as a Central
Sector Scheme.
 The Mission seeks to address the housing requirement of urban poor including
slum dwellers through following programme:
o Slum rehabilitation of Slum Dwellers with participation of private
developers using land as a resource
o Promotion of Affordable Housing for weaker section through credit
linked subsidy
o Affordable Housing in Partnership with Public & Private sectors
o Subsidy for beneficiary-led individual house construction
/enhancement.
Smart Cities  Smart Cities Mission, is an urban renewal and retrofitting program by the
Mission Government of India with the mission to develop 100 cities across the
country making them citizen friendly and sustainable.
 The Union Ministry of Urban Development is responsible for implementing the
mission in collaboration with the state governments of the respective cities.
 Its focus is on sustainable and inclusive development and to set examples that
can be replicated both within and outside the
 Smart City, thus catalysing the creation of similar Smart Cities in various regions
and parts of the country.
AMRUT  Atal Mission for Rejuvenation and Urban Transformation

 AMRUT along with Smart Cities Mission was jointly planned to transform urban
living conditions through infrastructure upgradation.
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 AMRUT provides for basic civic amenities like water supply, sewerage, urban
transport, parks as to improve the quality of life for all, especially the poor and
the disadvantaged.
 AMRUT is aimed at transforming 500 cities and towns into efficient urban living
spaces over a period of five years.
 AMRUT is a centrally sponsored scheme with 80% budgetary support from the
Centre.
HRIDAY  By Ministry of Housing and Urban Affairs

 It aims to bring urban planning, economic growth and heritage conservation
together for heritage cities.
 It seeks beautification in an inclusive and integrated manner with focus on
National Heritage cleanliness, livelihoods, skills, safety, security, accessibility and faster service
City Development delivery of heritage cities.
and  Scheme will be completely funded by the Central Government to create
Augmentation infrastructure and provide facilities around the heritage sites to attract more
Scheme tourists.
 Development initiatives covered includes improvement of water supply,
sanitation, drainage, waste management, footpaths, approach roads, street
lights, electricity wiring, tourist conveniences, landscaping and such citizen
services.
 After the discontinuation of the HRIDAY scheme in March 2019,
the development of Heritage destinations was included in the PRASHAD
Scheme.
PRASHAD  National Mission on Pilgrimage Rejuvenation and Spiritual, Heritage

Augmentation Drive (PRASHAD)
 It was launched by Union Ministry of Tourism.
 It aims at integrated development of pilgrimage destinations in planned,
prioritised and sustainable manner to provide complete religious tourism
experience.
 The scheme shall be 100% centrally funded for the project components
undertaken for public funding.
 Objectives of scheme: Harness pilgrimage Tourism for its multiplier effect on
employment, world class infrastructure in religious destinations and Promoting
local art, culture, cuisine etc.
SURFACE TRANSPORT
Bharatmala  It is an umbrella project under the Ministry of Road Transport and Highways.
Pariyojana  It also includes first phase of new umbrella programme BharatMala Pariyojana
I that involves construction of 34,800 km highways by 2022
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 It focuses on the new initiatives like development of Border and International
connectivity roads, Coastal & port connectivity roads, improving efficiency of
National Corridors, Economic corridors and others.
 Implemented by -Ministry of road transport and highways, NHAI and National
Highways and Infrastructure Development Corporation Ltd (NHIDCL) and
respective state public works departments (PWDs) Connectivity Programmes
 Recently NHAI launched two mobile apps MyFASTag and FASTag Partner to
facilitate Electronic Toll Collection so to reduce human interventions and
increase the seamless passage of vehicles
 FASTag is a device which uses RFID technology for making a prepaid payment
directly from the prepaid account.
 NHAI in consultation with RBI and NPCI has launched online facility as well as
two Mobile App to purchase FASTag for easy purchase, recharge and grievances
redressal.
Setu Bharatam  Setu Bharatam aimed to make all the national highways free from railway
crossing by the year 2019.
 Construction of bridges in the national highways across the country.
 Construction of around 280 under and over railway tracks bridges by the
Government with an expense of around Rs. 100 Crore.
 Use of scientific techniques such as measurement of distance, longitude,
latitude, material, designs etc. during the construction of bridges.
INAM Pro+ Web portal for buyers and sellers of construction materials
PORTS
Sagarmala  To promote port-led development in India.

 The project aims to harness the 7500 km long coastline of the country to
unleash its economic potential.
 The project also seeks to boost infrastructure for transporting goods to and
from ports quickly, efficiently and cost-effectively.
 Sagarmala Project Components
1. Port Modernization & New Port Development – extending the capacity of
existing ports and developing new ports
2. Port Connectivity Enhancement – improving port-hinterland connectivity,
optimizing cost and time of cargo movement through multi-modal logistics
solutions including domestic waterways
3. Port-linked Industrialization – Developing industrial clusters close to ports
and developing Coastal Economic Zones
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4. Coastal Community Development – Promoting sustainable development of
coastal communities through skill development & livelihood generation
activities, fisheries development, coastal tourism, etc.
Jal marg vikas  The project envisages development of National Waterway-1 (for commercial
project navigation) between Allahabad & Haldia on Ganga River that will cover a
distance of 1620 km.
 Implemented by the Inland Waterways Authority of India under the Ministry of
Shipping, Government of India.
 The project is being implemented with the technical assistance & investment
support of World Bank.
 The project covers Uttar Pradesh, Bihar, Jharkhand and West Bengal.
 4 Multi-Modal Terminals are planned on NW1: Varanasi, Sahibganj, Haldia and
Gazipur.
 The project adopted the first time in India a River Information System, IT based
system to optimize the resource management of waterborne transport.
CIVIL AVIATION
UDAN  Ude Desh Ka Aam Naagrik (UDAN) was launched as a regional connectivity
scheme under the Ministry of Civil Aviation in 2016.
 The objective of scheme is to create affordable yet economically viable and
profitable flights on regional routes so that flying becomes affordable to the
common man even in small towns.
 The scheme envisages providing connectivity to un-served and underserved
airports of the country through the revival of existing air-strips and airports.
The scheme is operational for a period of 10 years.
UDAN 1.0
 Under this phase, 5 airlines companies were awarded 128 flight routes to 70
airports (including 36 newly made operational airports)
UDAN 2.0
 In 2018, the Ministry of Civil Aviation announced 73 underserved and unserved

airports.
 For the first time, helipads were also connected under phase 2 of UDAN
scheme.
UDAN 3.0
www.iasbaba.com 27

 Inclusion of Tourism Routes under UDAN 3 in coordination with the Ministry of
Tourism.
 Inclusion of Seaplanes for connecting Water Aerodromes.
 Bringing in a number of routes in the North-East Region under the ambit of
UDAN.
NABH (Nextgen  Announced in Budget 2018-19, it seeks expansion of airport capacity more than
Airports For 5 times to handle a billion trips a year.
Bharat) Nirman  It aims to establish about 100 airports in 15 years at an estimated investment
Initiative of Rs 4 lakh crore, a large part of the investment to be leveraged from private
sector.
 The key aspects of NABH Nirman include (i) Fair and equitable land acquisition
(ii) Long term master plan for airport and regional development (iii) Balanced
economics for all stakeholders
 It will help to connect smaller towns and cities and increase tourism and
economic activity.
INFRASTRUCTURE FINANCING
Real Estate  They are like mutual funds in the stock market in the field of real estate sector.
Investment Trusts  REITS sells units to investors.
(REITs)  This money is invested in real estate projects to earn rental income.
 This income is then distributed to unit holders and the units are listed and
traded on stock markets like any other equity share.
Infrastructure  It is a modified REITS type structure for infrastructure projects.

Investment Trusts  It will attract long term finance from foreign and domestic sources including
(InvITs) the NRIs
 An InvIT would be a trust with parties such as sponsor, investment manager,
trustee and project manager.
National  NIIF has been set up as a fund of funds and is registered with Securities and
Investment and Exchange Board of India (“SEBI”) as a Category II Alternate Investment Fund
Infrastructure (“AIF”) under the SEBI (Alternative Investments Funds) Regulations, 2012
Fund (NIIF) (“AIF Regulations”).
 NIIF shall have various sector specific or investor specific close ended Schemes
(“Sub-funds”). Each Sub-fund may issue various classes of units. Sub-funds
may be bilateral or multilateral.
 Investors and Ministry of Finance to subscribe to the units of various Sub-
funds. Units of each Sub-fund shall be distinct from and independent of other
Sub-fund.
28
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 The Trustee will have discretion of floating multiple Sub-funds. The Trustee
shall keep and maintain distinct and separate accounts in respect of each Sub-
fund and maintain assets of one Sub-fund distinct from and independent of
another.
 The proposed corpus of NIIF will be Rs.40,000 crore, which may be raised from
time to time, as decided by the Ministry of Finance.
 The Government’s share/contribution in the corpus will be 49 percent. For
the balance 51% NIIF will solicit equity participation from strategic anchor
partners viz., Multilateral/bilateral institutions, Sovereign wealth funds,
Pension funds and domestic Public sector enterprises.
India  The IIPDF Scheme was set up in 2007.

Infrastructure  It is a Central Sector Scheme with total outlay of Rs 150 crore for a period of
Project three years from 2022-23 to 2024-25.
Development Fund  It is available to the Sponsoring Authorities for PPP projects for meeting the
Scheme (IIPDF project development costs.
Scheme)  It would be necessary for the Sponsoring Authority to create and empower a
PPP Cell to undertake PPP project development activities and also address
larger policy and regulatory issues.
 Objective: It is aimed to provide financial support for quality project
development activities.
Significance:
 The Sponsoring Authority will, be able to source funding to cover a portion

of the PPP transaction costs, thereby reducing the impact of costs related to
procurement on their budgets.
Financial Outlay:
 The IIPDF will contribute upto 75% of the project development expenses to
the Sponsoring Authority as an interest free loan. The balance 25% will be co-
funded by the Sponsoring Authority.
 On successful completion of the bidding process, the project development
expenditure would be recovered from the successful bidder.
 However, in the case of failure of the bid, the loan would be converted into
grant.
 In case the Sponsoring Authority does not conclude the bidding process for
some reason, the entire amount contributed would be refunded to the IIPDF.
www.iasbaba.com 29
NATIONAL LOGISTICS POLICY Key Building Blocks:

o Digital Integration System: It will lead to
Context: Recently, the Government has launched seamless and faster work-flow, making
a National Logistics Policy (NLP) 2022, aiming to logistics significantly more efficient.
achieve ‘quick last-mile delivery’, end transport- o Unified Logistics Interface Platform: It
related challenges. aims to collapse all logistics and transport
sector digital services into a single portal,
The policy focuses on key areas such as process re- thereby freeing manufacturers and
engineering, digitisation, and multi-modal exporters from the present tyranny of long
transport. and cumbersome processes.
o It is a crucial move as high logistics cost o Ease of Logistics Services: E-Logs, a new
impacts the competitiveness of domestic digital platform, will allow industry to
goods in the international market. directly take up operational issues with
o The need for a national logistics policy was government agencies for speedy
felt since the logistics cost in India is high resolution.
as compared to other developed o Comprehensive Logistics Action Plan: The
economies. Comprehensive Logistics Action Plan
comprising integrated digital logistics
Goals: systems, standardisation of physical
o Logistics costs have to be cut by half to be assets, benchmarking service standards,
near global benchmarks by 2030 by human resource development, capacity
reducing the cost of logistics from 14-18% building, development of logistics parks,
of GDP to global best practices of 8%. etc.
 Countries like the US, South Korea,
Singapore, and certain European MISCELLENOUS
nations have such a low logistics
cost-to-GDP ratio. INDEX-LINKED INSURANCE POLICIES (ILIPS)
 The current cost is 16% of GDP. Context: A committee set up by the Insurance
o Being the 5th largest economy in the world, Regulatory and Development Authority of India
India aims to be among the top 10 in the (IRDAI) has recommended the introduction of
LPI (Logistics Performance Index) by 2030. index-linked insurance policies (ILIPs).
It has to match the pace of South Korea. About Index-linked Insurance Policies
 In 2018, India was ranked 44th in • The returns from ILIPs will be linked to
the LPI. benchmark indices.
o Creating data-driven Decision Support • ILIPs are the Insurance products linked
Systems (DSS) to enable an efficient with the benchmark indices. It includes
logistics ecosystem. 10-year Sovereign Bond Index, Sensex or
o The policy’s target is to ensure that Nifty etc.
logistical issues are minimised, exports  The ILIPs linked with the
grow manifold, and small industries and government bonds are less risky
the people working in them benefit while those linked with the equity-
significantly. based indices will go through the
fluctuation in returns in
30
www.iasbaba.com

accordance with the stock market • Protect the rights of insurance policy
performance. holders.
 ILIPs can be an alternative or • Provide registration certification to life
complementary option to the insurance companies.
current conventional guaranteed • Adjudication of disputes between
products (including annuities and insurers and intermediaries or
savings products) and unit-linked insurance intermediaries.
insurance plans (ULIPs).
 ILIP could be seen as a suite of SOCIAL IMPACT BOND (SIB)
products wherein greater
Context: In Dec 2020, Pimpri Chinchwad Municipal
transparency can be facilitated to
Corporation (PCMC) signed an MoU with UNDP
the customers with respect to
India to co-create India’s first Social Impact Bond
product structure and benefits and
(SIB).
where risks are in line with the
About Social Impact Bond (SIB)
choice made by the customers.
• sector or governing authority, whereby it
 The ILIPs can be regarded as a life
pays for better social outcomes in certain
insurance policy under Section
areas and passes on the part of the savings
10(10D) and taxability of the
achieved to investors.
Insurance Policy Act.
• It lays down outcome-based targets to be
achieved at the start of the contract.
• It allows for tracking the progress of the
Insurance Regulatory and Development outcomes, thus ensuring transparency for
Authority of India (IRDAI) investors.
• It is an autonomous, statutory body • This SIB will support the PCMC in improving
which is given the task to regulate and healthcare services for its citizens,
promote the insurance and re-insurance especially with respect to the pandemic
industries & insurance agency in India. while incurring minimum investment risks
• An Act of Parliament passed by the • The introduction of the SIB will attract
Government of India in 1999 known as more investors from public and private
Insurance Regulatory and Development sectors to fund public welfare projects and
Authority Act, 1999 which led to its thus help to meet the investment deficit.
creation. • This is the first time that a government
• Headquarters: Hyderabad, Telangana.
body will act as the ‘outcome funder’ in a
• It is a 10-member body which includes: bond, whereas traditionally most
Chairman, Five full time & Four part government-funded public projects require
time members appointed by the large and early investments by the
government of India. government with a substantial gestation
Functions period of outcomes and involve various
• Promote and regulate professional
kinds of risks.
organisations connected with insurance
and reinsurance business; regulate Key Features of Social Impact Bonds
investment of funds by insurance • They period of time.
companies • They do not provide fixed rate of return.
www.iasbaba.com 31

• The outcome is completely dependent on  Pepsico cited the FAQ document to justify
success of social outcome. dragging more than nine farmers to court
• They are not affected by market risk. in 2018 for growing and selling its
• They are subjected to inflation risk. registered variety without its consent.
 The company faced product boycotts and
INDIA REVOKES PEPSICO’S POTATO PATENT major protests across the political
spectrum for slapping a ₹4.2 crore lawsuit
In News: Two years ago PepsiCo India had sued
against four farmers, and ultimately
nine Gujarati farmers for allegedly infringing
withdrew all cases after government
patent rights by growing its registered potato
intervention just before Lok Sabha
variety.
elections in May 2019.
 However, now the company’s registration
of the variety has been revoked by the
The Protection of Plant Varieties and Farmers’
Protection of Plant Varieties and Farmers
Rights (PPV&FR) Act, 2001:
Rights’ Authority (PPV&FRA).
 Enacted by India in 2001 adopting sui
 The PPV&FRA questioned the
generis system.
documentation produced by PepsiCo
 It is in conformity with International
claiming it was the owner of the variety,
Union for the Protection of New Varieties
and thus could be considered the
of Plants (UPOV), 1978.
Registered Breeder under the law.
 The legislation recognizes the
contributions of both commercial plant
Brief Background of the issue
breeders and farmers in plant breeding
 The FL-2027 variety of potatoes, used in
activity and also provides to implement
Lays potato chips, was grown by about
TRIPs in a way that supports the specific
12,000 farmers with whom the company
socio-economic interests of all the
had an exclusive contract to sell seeds
stakeholders including private, public
and buy back their produce.
sectors and research institutions, as well
 In 2016, the company registered the
as resource-constrained farmers.
variety under the PPV&FR Act, 2001.
 Alleging that farmers who were not part
Objectives of the PPV & FR Act, 2001:
of its “collaborative farming programme”
 To establish an effective system for the
were also growing and selling this variety
protection of plant varieties, the rights of
in Gujarat, PepsiCo had filed rights
farmers and plant breeders and to
infringement cases against nine farmers.
encourage the development of new
 The Frequently Asked Questions or FAQ
varieties of plants.
document had claimed that “only small
 To recognize and protect the rights of
and marginal farmers involved in
farmers in respect of their contributions
subsistence farming” are eligible to claim
made at any time in conserving, improving
rights under the Protection of Plant
and making available plant genetic
Varieties and Farmers Rights (PPV&FR)
resources for the development of new
Act, 2001. The FAQ also said these rights
plant varieties.
are not for “commercial farmers” and are
 To accelerate agricultural development in
only meant for “small scale” use.
the country, protect plant breeders’
32
www.iasbaba.com

rights; stimulate investment for research o Farmers are eligible for recognition
and development both in public & private and rewards for the conservation
sector for the development new of plant of Plant Genetic Resources of land
varieties. races and wild relatives of
 Facilitate the growth of seed industry in economic plants;
the country which will ensure the o There is also a provision for
availability of high-quality seeds and compensation to the farmers for
planting material to the farmers. non-performance of variety under
Section 39 (2) of the Act, 2001 and
Rights under the Act: o Farmer shall not be liable to pay
 Breeders’ Rights: Breeders will have any fee in any proceeding before
exclusive rights to produce, sell, market, the Authority or Registrar or the
distribute, import or export the protected Tribunal or the High Court under
variety. Breeder can appoint agent/ the Act.
licensee and may exercise for civil remedy
in case of infringement of rights. MOONLIGHTING
 Researchers’ Rights: Researcher can use
In News: Food delivery start-up Swiggy recently
any of the registered variety under the Act
announced an “industry-first” policy of allowing
for conducting experiment or research.
its employees to take up gigs or projects outside
This includes the use of a variety as an
of their regular employment at the company,
initial source of variety for the purpose of
during the hours away from work.
developing another variety but repeated
use needs prior permission of the  Swiggy calls these new norms the
registered breeder. “moonlighting” policy.
 Farmers’ Rights: What is moonlighting?

 Moonlighting is the act of working at an
o A farmer who has evolved or
developed a new variety is entitled extra job beyond regular working hours,
for registration and protection in usually without the knowledge of the
like manner as a breeder of a employer.
 Since the side job was mostly at
variety;
o Farmers variety can also be
nighttime or on weekends, it was
registered as an extant variety; referred to as moonlighting.
 The term gained popularity when workers
o A farmer can save, use, sow, re-
sow, exchange, share or sell his in the US started seeking a second job
farm produce including seed of a beyond their regular 9-to-5 work for
variety protected under the additional income.
PPV&FR Act, 2001 provided farmer
Why do people moonlight, and is it legal?
shall not be entitled to sell
branded seed of a variety  The main reason for going above and
protected under the PPV&FR Act, beyond an existing job is earning more
2001; money.
www.iasbaba.com 33

 Also, working in a different role can allow
a person to develop new skills, explore
related domains and connect with more
people.
Concerns
 Employers are suspicious of this practice

because it can mean that a worker may
not give their organisation the time it
needs, and not give any extra time to
either organisation.
 Holidays and time-off are also meant to
rest a worker and improve their efficiency,
but taking on another job could make this
difficult.
In India, private companies usually do not allow

holding multiple jobs. Shops and Establishment
Acts of various states restrict double employment.
Has moonlighting increased recently?
 In the last two years, coronavirus-induced

lockdowns increased the tendency to
moonlight among workers in certain
industries.
 This was because apart from financial
insecurity at the time, working from
home allowed a few categories of
workers to get more work done, freeing
up time for a second job.
 Also the gig economy concept has gained
greater legitimacy in recent years, too.
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IASBABA’S PEP 2024 – ECONOMY HANDOUT 10

IASBABA’S PEP 2024 – ECONOMY HANDOUT 10

a) Cabinet Committee on Economic Affairs

Q.2) In India, markets in agricultural products are regulated under the

a) Essential Commodities Act, 1955

a) transportation cost only

IASBABA’S PEP 2024 – ECONOMY HANDOUT 10

ROLE OF AGRICULTURE IN INDIAN structure or system, both functional and

IASBABA’S PEP 2024 – ECONOMY HANDOUT 10

IASBABA’S PEP 2024 – ECONOMY HANDOUT 10

IASBABA’S PEP 2024 – ECONOMY HANDOUT 10

IASBABA’S PEP 2024 – ECONOMY HANDOUT 10

IASBABA’S PEP 2024 – ECONOMY HANDOUT 10

Antyodaya Anna Yojana (AAY):  The method of licensing FPSs and

IASBABA’S PEP 2024 – ECONOMY HANDOUT 10

IASBABA’S PEP 2024 – ECONOMY HANDOUT 10

IASBABA’S PEP 2024 – ECONOMY HANDOUT 10

 High Level Committee (HCL) on

IASBABA’S PEP 2024 – ECONOMY HANDOUT 10

IASBABA’S PEP 2024 – ECONOMY HANDOUT 10

What is the basis of MSP then?

IASBABA’S PEP 2024 – ECONOMY HANDOUT 10

Paramparagat Krishi  It is an initiative to promote organic farming in the country, was

IASBABA’S PEP 2024 – ECONOMY HANDOUT 10

In order to ensure more efficient and effective implementation of the

 Enrolment 100% voluntary for all farmers from 2020 Kharif.

Gramin Bhandaran  It is an Indian government initiative to offer subsidies to individuals or

IASBABA’S PEP 2024 – ECONOMY HANDOUT 10

Agricultural  It is a centrally sponsored scheme that is being implemented since

AGMARKNET  Agmarknet portal is a govt. of India portal on agricultural marketing

IASBABA’S PEP 2024 – ECONOMY HANDOUT 10

SOME OF THE RECENT GOVERNMENT manufacturing champions commensurate

IASBABA’S PEP 2024 – ECONOMY HANDOUT 10

20th Livestock Census

IASBABA’S PEP 2024 – ECONOMY HANDOUT 10

IASBABA’S PEP 2024 – ECONOMY HANDOUT 10

IASBABA’S PEP 2024 – ECONOMY HANDOUT 10

IASBABA’S PEP 2024 – ECONOMY HANDOUT 10

IASBABA’S PEP 2024 – ECONOMY HANDOUT 10

Factors affecting Investment Sentiments  Inflation.

IASBABA’S PEP 2024 – ECONOMY HANDOUT 10

AMRUT  Atal Mission for Rejuvenation and Urban Transformation

IASBABA’S PEP 2024 – ECONOMY HANDOUT 10

HRIDAY  By Ministry of Housing and Urban Affairs

PRASHAD  National Mission on Pilgrimage Rejuvenation and Spiritual, Heritage

IASBABA’S PEP 2024 – ECONOMY HANDOUT 10

Sagarmala  To promote port-led development in India.

IASBABA’S PEP 2024 – ECONOMY HANDOUT 10

 In 2018, the Ministry of Civil Aviation announced 73 underserved and unserved

IASBABA’S PEP 2024 – ECONOMY HANDOUT 10

Infrastructure  It is a modified REITS type structure for infrastructure projects.

IASBABA’S PEP 2024 – ECONOMY HANDOUT 10

India  The IIPDF Scheme was set up in 2007.

 The Sponsoring Authority will, be able to source funding to cover a portion

IASBABA’S PEP 2024 – ECONOMY HANDOUT 10

NATIONAL LOGISTICS POLICY Key Building Blocks:

IASBABA’S PEP 2024 – ECONOMY HANDOUT 10

IASBABA’S PEP 2024 – ECONOMY HANDOUT 10

IASBABA’S PEP 2024 – ECONOMY HANDOUT 10

 Farmers’ Rights: What is moonlighting?

IASBABA’S PEP 2024 – ECONOMY HANDOUT 10

 Employers are suspicious of this practice

In India, private companies usually do not allow

7 Agriculture & Infrastructure

7 Agriculture & Infrastructure