- CURRENT AFFAIRS – 09/02/2024
CURRENT AFFAIRS – 09/02/2024
Rs 4,797 cr PRITHVI to boost atmosphere, polar and ocean research
(General Studies- Paper III)
Source : The Indian Express
The Union Cabinet has given its approval for aRs 4,797 crore research scheme called PRITHviVIgyan (PRITHVI) to boost and sustain research efforts in ocean, atmospheric, and polar sciences.
- The umbrella scheme will be implemented by the Ministry of Earth Sciences (MoES) with an aim to support ongoing research projects till 2026 in areas such as atmosphere, hydrosphere, cryosphere, geosphere, and biosphere.
- PRITHVI consolidates research efforts in various key areas under a single umbrella scheme.
- It covers atmosphere, hydrosphere, cryosphere, geosphere, and biosphere, streamlining research previously conducted under separate sub-heads.
- The scheme responds to the global challenges posed by climate change, addressing issues like extreme weather events, rising sea levels, depleting glaciers, cyclones, and prolonged dry spells.
- Improved understanding of the roles of atmosphere, ocean, and polar regions is deemed necessary.
- Some of the existing research projects now incorporated into PRITHVI include:
- Atmosphere and Climate Research-Modelling Observing Systems and Services (ACROSS),
- Ocean Services, Modelling Application, Resources and Technology (O-SMART),
- Polar Science and Cryosphere Research (PACER),
- Seismology and Geosciences (SAGE), and
- Research, Education, Training, and Outreach (REACHOUT).
- The scheme allows flexibility in fund utilization, enabling resources allocated for one research area to be redirected to support another if funds remain underutilized in a particular sub-head.
- PRITHVI marks a significant development by opening doors for Indian scientists to collaborate with international experts.
- The scheme will consider proposals for international collaboration, facilitating joint research efforts.
The new process for picking Election Commissioners
(General Studies- Paper II)
Source : The Indian Express
Anup Chandra Pandey, the Election Commissioner, is scheduled to retire on February 14, ushering in a new era of selection processes for the position.
- Historically, the appointment of members to the Election Commission was solely at the discretion of the government, lacking transparency and raising concerns about impartiality.
- The current Commission consists of Chief Election Commissioner Rajiv Kumar and ArunGoel.
- Supreme Court Intervention:
- The impetus for change came from the Supreme Court, where four petitions spanning from 2015 to 2022 were filed, advocating for a fair and transparent mechanism in appointing Election Commissioners.
- These petitions prompted a legal examination of Article 324 of the Constitution, which delineates the Election Commission’s role.
- The Supreme Court, recognizing the need for clarification, referred the matter to a Constitution bench in October 2018.
- Constitutional Interpretation:
- In September 2022, a five-judge Constitution bench, led by Justice KM Joseph, commenced hearings on the petitions.
- The crux of the issue revolved around Article 324(2), which assigns the President the responsibility of appointing Election Commissioners, contingent upon any parliamentary legislation.
- The absence of such laws led to criticism of the opaque appointment system, casting doubt on the Commission’s independence.
- The petitioners argued for a shift towards a consultative process, advocating for the establishment of a collegium or a similar body to oversee the selection of Election Commissioners.
- They highlighted the need for transparency and independence within the appointment process to uphold the integrity of the Election Commission.
- Previous Appointment Process of Election Commissioners
- The appointment of Election Commissioners was exclusively within the purview of the Executive, specifically the Union government.
- The process involved the government maintaining a database of serving and retired officers, primarily Secretaries to the Government of India and Chief Secretaries.
- The Law Ministry would then create a shortlist from this database.
- The ultimate decision rested with the Prime Minister, who would propose a candidate for formal appointment by the President.
- Notably, past Election Commissioners were predominantly retired officers of the Indian Administrative Services (IAS), with few exceptions.
- Centre’s Opposition to Supreme Court Intervention:
- The central government staunchly opposed any Supreme Court intervention in the appointment process.
- Arguing that Article 324(2) only required parliamentary legislation if enacted, the government asserted that the President possessed constitutional authority to make appointments in the absence of such laws.
- The existing procedure, which lacked a legislative framework, had been consistently relied upon by different governments.
- The government dismissed the idea of implementing a “utopian model” as the basis for changes, emphasizing that the established procedure had functioned adequately.
- This stance reflected a reluctance to alter the traditional method of appointment in favor of untested alternatives.
- In response to the petitioners’ call for change, the government’s legal representatives contended that there was no demonstrated threat to the independence of the Election Commission.
- They argued that without a clear and immediate risk, judicial interference was unnecessary, advocating for judicial restraint.
- Supreme Court’s Landmark Ruling on Election Commissioner Appointments
- On March 2, 2023, a significant ruling by a five-judge bench of the Supreme Court reshaped the process of appointing Election Commissioners in India.
- The court delved into the legislative history of Article 324, highlighting the Constituent Assembly discussions.
- It concluded that the founding fathers intended to curtail the exclusive authority of the Executive in appointing Election Commission members.
- The inclusion of “subject to any law to be made by Parliament” in Article 324(2) indicated the necessity for parliamentary legislation on this matter.
- In response to the absence of such legislation, the court addressed the vacuum in the appointment process.
- Recognizing the potential detrimental effects of leaving appointments solely in the hands of the Executive, the Supreme Court mandated a consultative process.
- It ruled that the President would appoint the Chief Election Commissioner and Election Commissioners based on the advice of a Committee comprising the Prime Minister, the Leader of the Opposition in the Lok Sabha, and, in the absence of a recognized Leader of the Opposition, the leader of the largest opposition party in the Lok Sabha.
- The Chief Justice of India also played a crucial role in this committee.
- Parliamentary Authority and Future Legislation:
- The Supreme Court, however, emphasized that these norms were “subject to any law to be made by Parliament,” allowing for the potential enactment of a specific law on the appointment process in the future.
- This left room for legislative intervention and refinement of the process as deemed necessary by the Parliament.
- Historical Precedents:
- Contrary to the perception that this consultative process was unprecedented, the Supreme Court’s decision echoed proposals from previous committees.
- In 1990, the Dinesh Goswami committee recommended a consultative approach involving the President, Chief Justice of India, and the Leader of the Opposition or the leader of the largest Opposition group.
- Similarly, the 20th Law Commission’s 255th report in 2015 also advocated for a consultative process, suggesting a three-member collegium or selection committee comprising the Prime Minister, the Leader of the Opposition or the leader of the largest Opposition party in the Lok Sabha, and the Chief Justice of India.
- Introduction of Parliamentary Bill:
- Following the Supreme Court’s landmark judgment in March 2023, the Central government took action by introducing a Bill in Parliament in August of the same year.
- The Bill aimed to delineate a formal procedure for appointing Election Commissioners.
- Given the Supreme Court’s specification that its appointment norms were “subject to any law to be made by Parliament,” the government’s introduction of the Bill was a legitimate step.
- Concerns Raised by Proposed Bill:
- While Parliament passed the Bill in December 2023, concerns arose about the potential implications of the proposed appointment process.
- The worry centered on whether the Bill had the potential to undermine the reforms envisioned by the Supreme Court.
- The appointed committee, as outlined in the Bill, comprised the Prime Minister, the Leader of the Opposition in the Lok Sabha, and a Cabinet Minister nominated by the Prime Minister.
- The selection process involved choosing from five names shortlisted by a screening panel led by the Law Minister and including two Union secretaries.
- Criticism of Committee Composition:
- Critics, particularly from the Opposition, raised objections to the composition of the committee.
- They argued that the framers of the Constitution intended the Election Commission to be an independent body.
- However, the proposed committee’s composition seemingly marginalized the Leader of the Opposition, creating a scenario where the Prime Minister and the Union minister could consistently outvote the Leader of the Opposition.
- Parliamentary Approval and Presidential Assent:
- Despite the criticism, the Bill successfully passed through Parliament in December 2023.
- Within a week of its passage, the President granted her assent, formalizing the new procedure for appointing Election Commissioners.
- The enactment of this Bill marked a significant development in the ongoing process of reforming the appointment mechanism for Election Commissioners, with its implications and practical outcomes yet to be fully realized and evaluated.
About the Election Commission
- The Election Commission of India is a permanent and independent body established by Article 324 of the Indian Constitution.
- Its primary purpose is to ensure free and fair elections for parliament, state legislatures, the office of the president, and the office of the vice-president.
- The Election Commission is an all-India body, common to both the Central and state governments.
- It does not oversee elections to panchayats and municipalities, which fall under the jurisdiction of separate State Election Commissions.
- The Election Commission consists of the Chief Election Commissioner and other election commissioners appointed by the president.
- The Chief Election Commissioner acts as the chairman when other election commissioners are appointed.
- The president may appoint regional commissioners in consultation with the Election Commission to assist in specific regions.
- The conditions of service and tenure of office for election commissioners and regional commissioners are determined by the president.
- Historical Changes in Composition:
- From 1950 to October 15, 1989, the Election Commission functioned with a single Chief Election Commissioner.
- In October 1989, two more election commissioners were appointed, creating a three-member body.
- The two posts of election commissioners were abolished in January 1990, returning the Election Commission to its earlier single-member structure.
- In October 1993, two more election commissioners were appointed again, establishing the current three-member structure.
- Powers and Tenure:
- Chief Election Commissioner and other election commissioners have equal powers, salary, allowances, and perquisites similar to Supreme Court judges.
- Differences of opinion are decided by majority vote within the Commission.
- They hold office for six years or until the age of 65, whichever is earlier, and can resign or be removed before their term expires.
Charting a path for the population committee
(General Studies- Paper II)
Source : TH
The recently announced interim budget introduces a significant initiative – the establishment of a “high-powered committee” with a comprehensive mandate.
- This committee is tasked with addressing the challenges arising from rapid population growth and demographic changes in line with the overarching goal of ‘Viksit Bharat’ (Developed India).
- Elements of the Committee’s Mandate:
- The committee is expected to adopt an interdisciplinary approach, drawing expertise from fields such as demography, public health, economics, sociology, and governance.
- Through extensive research and data analysis, the committee aims to identify emerging issues and evaluate the effectiveness of existing interventions.
- Monitoring demographic trends is crucial for informed decision-making.
- Collaboration with diverse stakeholders, including government agencies, non-governmental organizations, civil society groups, academia, and the private sector, is emphasized.
- This collaborative effort is crucial for fostering partnerships and implementing population-related policies and programs at both national and grassroots levels.
- Apart from policy formulation and implementation, the committee aims to prioritize public awareness and education campaigns.
- The committee is also expected to facilitate international collaboration and the exchange of best practices in population management.
- Evolution and Prospects: India’s Demographic Landscape
- India’s demographic landscape has undergone transformative changes, marked by declining fertility rates, a growing working-age population, and an increasing elderly demographic.
- This shift has resulted in a reduced dependency ratio, contributing to economic growth.
- Until the 1970s, India experienced rapid population growth, but fertility levels have since steadily declined, shaping the nation’s demographic trajectory.
- As of the latest projections by the United Nations, India is on track to reach a population of 1.46 billion by 2030, constituting 17% of the world’s projected population.
- The Total Fertility Rate (TFR) is expected to decrease to 1.73 in 2031-35 from 2.5 in 2009-11, marking a demographic transition with a declining proportion of the child population and an increasing concentration in the working-age group.
- India stands at the brink of a demographic dividend, with the potential for accelerated economic growth per capita.
- To realize this potential, strategic investments in health, education, and skill development are imperative.
- Positive trends in life expectancy, particularly for females and males, offer an opportunity to capitalize on a growing working-age population.
- Maximizing the benefits requires addressing gender disparities, creating new jobs, integrating the informal sector, and empowering the female labor force.
- Key Imperatives for India’s Future:
- Human Capital Development:
- To capitalize on the demographic dividend, India must invest in developing its human capital through initiatives focused on education, health, and skill development.
- Job Creation and Formal Sector Integration:
- Efforts should be directed towards creating new jobs and integrating the informal sector with the formal sector to enhance economic productivity.
- Female Empowerment:
- Increasing the participation rate of the female labor force is crucial for inclusive development.
- This involves addressing gender disparities and promoting opportunities for women in various sectors.
- Inclusive and Sustainable Development:
- Policies must aim at inclusive and sustainable development by improving access to education and healthcare and promoting family planning practices.
- Health Challenges:
- India faces significant challenges in providing access to quality healthcare across its diverse population segments.
- Public spending on health, at approximately 1% of GDP, underscores the need for policies prioritizing health promotion and increased financial allocation to health infrastructure.
- While initiatives to strengthen primary healthcare, especially in rural areas, have shown positive results, persistent challenges include nutritional deprivation among children, contributing to hunger insecurity and hindering physical and cognitive development.
- Addressing these issues necessitates comprehensive efforts, including ensuring access to essential commodities, implementing targeted nutrition programs, and interventions to improve water availability and sanitation.
- Education Challenges:
- Investments in education and skill development are crucial to unlock India’s demographic dividend.
- UNICEF estimates that nearly 47% of Indian youth may lack the necessary education and skills for employment by 2030.
- The disruptions caused by the COVID-19 pandemic have exacerbated these challenges, with over 250 million children facing interruptions in their education.
- To counter these issues, increased investment in nutrition and early childhood education is essential.
- Suggestions include incorporating pre-primary education into the Right to Education Act, designing play-based flexible curricula, and engaging parents, communities, and stakeholders to generate demand for early childhood education.
- Furthermore, efforts to align skill development initiatives with industry requirements are vital to reduce unemployment and enhance productivity.
- Strengthening Evidence-Based Decision Making
- A critical impediment to evidence-based policymaking in India is the lack of accurate and timely population data.
- The absence of current and reliable data hampers effective decision-making, necessitating improvements in data collection methodologies, technology adoption, capacity building, and stakeholder collaboration.
- Key Focus Areas for Data Modernization:
- The population committee must prioritize investments in modernizing India’s data infrastructure.
- This includes establishing robust systems for data collection, management, and analysis.
- Upgrading data collection methods, incorporating digital technologies for processing, and ensuring data security and privacy are crucial components of this effort.
- National Censuses and Surveys:
- Regular and comprehensive national censuses and surveys are essential for collecting demographic data.
- India should emphasize the timely and accurate execution of these initiatives, ensuring coverage of all population segments, particularly marginalized and hard-to-reach populations.
- Validation and Quality Assurance:
- Implementing rigorous validation and quality assurance mechanisms is essential to ensure the reliability and accuracy of population data.
- Independent audits, validation exercises, and peer review processes can identify and rectify data errors, with exploration into integrating these quality assurance methods within the statistical system.
- Open Data Initiatives and Transparency:
- Promoting open data initiatives and transparency in data sharing is a promising avenue.
- Making population data freely available in standardized formats facilitates access for researchers, policymakers, and the public, promoting data reuse, transparency, and accountability.
- International Collaboration:
- Collaboration with international organizations such as the United Nations Population Division, World Bank, and academic institutions can provide access to global best practices, technical expertise, and funding opportunities for population data collection and analysis.
- Holistic Approach to Population Management:
- In navigating India’s demographic landscape, a holistic approach is crucial.
- Prioritizing investments in health, education, employment, and statistical systems, alongside promoting gender equality and social inclusion, will unlock the country’s demographic potential and drive inclusive and sustainable development.
- Strategic Planning and Global Leadership:
- With strategic planning, effective implementation, and international collaboration, India has the opportunity to emerge as a global leader in inclusive and sustainable development.
- Navigating its demographic transition requires concerted efforts to harness the demographic dividend and achieve socio-economic progress.
- Human Capital Development:
R&D spend — golden intervention or smoke and mirrors
(General Studies- Paper III)
Source : TH
Union Finance Minister Nirmala Sitharaman’s announcement in the interim Budget reveals the establishment of a ₹1 lakh crore corpus with fifty-year interest-free loans.
- The objective is to provide long-term financing or refinancing with low or nil interest rates to encourage significant research and innovation scaling in sunrise domains within the private sector.
- Current State of Private Sector Contribution to R&D:
- In 2020-21, the private sector’s contribution to India’s overall Research and Development (R&D) expenditure, as a fraction of GDP, stood at 36.4%.
- This amounted to ₹46,366.66 crore, while the rest was contributed by the Centre (43.7%), State governments (6.7%), higher education (8.8%), and public sector industry (4.4%).
- Comparatively, science ‘superpowers’ such as Germany, South Korea, and the United States witness private sector contributions at 67%, 79%, and 75% of their national Gross Expenditure on R&D (GERD), respectively.
- Critical Questions and Benchmarks:
- The announcement raises questions about the necessity for private sector contribution to outpace the public sector and whether the GERD distribution from government, private entities, and higher education in economically developed countries serves as a benchmark.
- It is noteworthy that while India’s absolute expenditure on R&D has increased from ₹1.1 lakh crore in 2009-10 to ₹1.27 lakh crore in 2020-21, the fraction of GDP allocated to R&D has steadily declined, from 0.82% to approximately 0.64%.
- In contrast, more technologically advanced countries maintain GERD-to-GDP ratios of at least 1%.
- Even nations like Brazil (1.16%) and South Africa (0.83%) surpass India in this metric.
- Implications and Challenges:
- The move to incentivize private sector research and innovation acknowledges the need for a substantial boost.
- However, the questions raised regarding the balance between private and public sector contributions and the declining R&D-to-GDP ratio underscore the challenges and considerations in effectively leveraging financial resources for research and development in India.
- The discourse on the virtue of enhancing the public sector’s Research and Development (R&D) contribution in India is deeply rooted in the nation’s development model and the purpose of technological innovation within it.
- The U.S. post-war model, emphasizing the “free play of free intellects,” contrasts with the “techno-nationalist” approach adopted by countries like Japan and South Korea.
- The latter focuses on building interconnectedness among universities, research institutes, companies, and governments to drive technological growth.
- Call for Increased Public Sector R&D Expenses:
- The purpose of innovation has evolved beyond economic growth, now encompassing environmental justice and sustainability.
- Against a backdrop of widening income gaps, diminishing protections for environmental rights, increasing privatization of public goods, and education and healthcare, the conventional virtue of private-sector dominance in R&D contributions is questioned.
- The absence of policy and regulatory frameworks ensuring equitable growth raises concerns, given that innovation is a prolonged and risk-laden process, where the state is seen as a better steward.
- Thus, it is advocated for increased public sector R&D emphasizing the need for expanded expenditure, particularly at the State level.
- This allocation aims to enhance research facilities at State universities, fostering freedom for researchers to address locally relevant problems.
- Increased public sector investment is viewed as essential to overcoming persistent bottlenecks hindering the transition of research from the laboratory bench to the factory floor.
- The argument contends that innovation’s true value lies in its ability to translate into practical advancements, and this flow is critical for preventing low-quality developments.
- The ₹1 Lakh Crore Corpus Dilemma:
- While recognizing the importance of increasing private sector contributions to Research and Development (R&D), the availability of a ₹1 lakh crore corpus with long-term low-interest loans is an enticing prospect, especially given India’s focus on technological prowess in recent years.
- A crucial catch arises concerning the allocation and purpose of the funds.
- Private sector investment in R&D spans diverse domains such as telecommunications, healthcare, finance, transport, and space flight.
- The challenge is to determine which sectors and entities within them will receive the funds.
- With a focus on “sunrise sectors,” which themselves are resource-intensive, questions emerge about the financial and environmental costs associated with meaningful innovation.
- Insufficient Funding for Ambitious Goals:
- The allocated ₹1 lakh crore, while substantial, may fall short of the ambitious goals set for innovation in sunrise domains, especially when considering the diverse and resource-intensive nature of these sectors.
- For instance, the Indian BioEconomy Report 2023 suggests that helping startups transition from bioeconomy research to biomanufacturing would require an infusion of $2 billion, indicating that the allocated amount may be insufficient.
- Government’s Need for Clear Objectives and Allocation Strategy:
- With numerous demands on the corpus, there is a need for the government to define clear objectives, domain-wise allocations, targets, and timeframes.
- Questions around beneficiary selection and the potential replenishment of the corpus further underscore the necessity for a well-defined strategy.
- The success of this initiative hinges on transparent planning and execution, differentiating between a golden intervention and mere smoke and mirrors.
The Paytm Payments Bank debacle
(General Studies- Paper III)
Source : TH
The Reserve Bank of India (RBI) has dealt a major blow to fintech giant Paytm by prohibiting its payments bank subsidiary, Paytm Payments Bank Ltd (PPBL), from accepting further deposits, top-ups, or credit transactions into its wallets or accounts starting February 29.
- This follows an audit report revealing “persistent non-compliances and continued material supervisory concerns” in the bank.
- Specific Instructions by RBI:
- PPBL is disallowed from onboarding new customers since March 2022.
- Existing customers can use their current balances for services, but no new transactions are permitted after February 29.
- The payments bank is barred from conducting banking services (e.g., AEPS, IMPS), bill payments, and UPI transactions.
- The termination of nodal accounts of the parent company, One97 Communication (OCL), and Paytm Payments Services is mandated before February 29.
- Settlement of all pipeline and nodal account transactions must occur by March 29.
- Potential Impact on Paytm:
- Analysts anticipate revenue and profitability implications for Paytm in the medium to long term.
- The severe restrictions may hinder Paytm’s ability to retain customers and sell payment and loan products.
- There is concern that the RBI’s actions may be indirectly revoking Paytm’s prepaid instrument license.
- Paytm’s parent company estimates a “worst-case impact” of ₹300 to ₹500 crore on its annual EBITDA (earnings before interest, taxes, depreciation, and amortization).
- Paytm’s Transition Strategy:
- In response to RBI’s restrictions on Paytm Payments Bank Ltd (PPBL), Paytm plans to transition by working with other banks and expanding third-party bank partnerships for merchant acquiring services.
- The migration will occur in three stages, involving finding a partner bank, assessing commercial viability, and facilitating account-to-account migration.
- Concerns and Impact:
- Nodal Account Transition Impact:
- Analysts note concerns about the nodal account transition impacting margins as Paytm settles nearly all of its merchant gross merchandise value through PPBL’s nodal account.
- This could lead to higher costs for Paytm for these services.
- Licensing and Governance Issues:
- RBI guidelines for payments banks prohibit direct lending activities.
- PPBL does not lend directly but provides credit-dispensing products from third parties.
- Concerns exist regarding governance structure and related party transactions, with Paytm owning 49% of PPBL, and founder Vijay Shekhar Sharma holding the remainder.
- One97 Communication (OCL) asserts that PPBL is run independently, adhering to banking regulations.
- Regulatory Actions and Compliance:
- RBI Governor Shaktikanta Das emphasizes that regulated entities are initially nudged to take corrective action, and effective action is taken if compliance is not achieved.
- PPBL was penalized ₹5.39 crore by RBI for flouting KYC norms previously.
- Over 1,000 accounts linked with the same PAN raised concerns about potential money laundering.
- Nodal Account Transition Impact:
What is a Payments Bank?
- Genesis and Regulatory Framework:
- On 23 September 2013, the RBI formed the Committee on Comprehensive Financial Services for Small Businesses and Low-Income Households, led by Nachiket Mor.
- The NachiketMor committee was established to explore comprehensive financial services.
- The committee submitted its final report on 7 January 2014, proposing the creation of a new bank category called payments bank.
- Payments banks are a new model of banks introduced in India, conceptualized by the Reserve Bank of India (RBI).
- They are designed to operate on a smaller scale with minimal credit risk and are aimed at advancing financial inclusion by offering banking and financial services to underserved populations such as migrant laborers, low-income households, and small entrepreneurs
- Some key features:
- They cannot issue credit or loans, including credit cards
- Payments banks can accept a restricted deposit, currently limited to ₹200,000 per customer, which may be increased further
- They can provide services such as remittance transfer, selling financial products of other banks, and offering ATM/debit cards
- Payments banks are not allowed to accept time deposits, NRI deposits, or set up subsidiaries for non-banking financial activities
- The objective of payments banks is to increase financial inclusion in remote areas where physical bank branches are not readily available.
- They predominantly operate digitally, with a limited number of physical branches.
Note: Bharti Airtel established India’s first payments bank, Airtel Payments Bank, showcasing the practical implementation of this innovative banking model.
What are the regulations with respect to rice prices?
(General Studies- Paper III)
Source : TH
The Indian government has implemented mandatory stock declarations for rice traders, wholesalers, retailers, and millers.
- Additionally, the introduction of “Bharat rice” aims to alleviate rice prices. However, traders and millers express skepticism about the effectiveness of these measures in price control.
- Paddy Production Disparities:
- In the 2022-2023 period, India’s rice production reached 135 million tonnes, marking a significant increase of 62.84 lakh tonnes from the previous year.
- Estimates for 2023-2024 suggest a mixed scenario.
- Southern States, major rice consumers, reportedly face reduced paddy production due to inadequate rainfall.
- Tamil Nadu anticipates a nearly 30% drop, while Karnataka expects a 25% decline.
- Conversely, northern regions, particularly in basmati and non-basmati varieties, report a 15% increase in rice production.
- Rice Prices and Inflation:
- Retail rice prices have surged by 14.51% in the past year.
- Basmati rice prices experienced a 15% decrease in the last month, contrasting with rising paddy prices in southern States.
- Prices of certain rice varieties have risen by over ₹10 per kg between November 2022 and November 2023.
- Despite ample Food Corporation of India stocks and a promising Kharif crop, concerns linger about the potential impact on prices due to regional production variations.
- Farmers in states like Tamil Nadu, possessing the capacity to store and sell stocks to private traders, anticipate better prices this year.
- The inflation is notably high in varieties preferred by consumers among the approximately 430 rice varieties produced in the country.
- Government Actions:
- The Indian government has mandated online reporting of rice stocks by traders, wholesalers, retailers, chain retailers, and millers in various categories like broken rice, non-basmati white rice, par-boiled rice, basmati rice, and paddy.
- The retail sale of ‘Bharat Rice’ has been introduced at ₹29 per kg for general consumers.
- Export bans and duties have been imposed to regulate the market, including the prohibition of broken rice exports in September 2022 and a 20% duty on par-boiled rice.
- Non-basmati white rice exports were also categorized as prohibited from July 2023.
- The government has procured 600 lakh tonnes of paddy during the current Kharif marketing season, resulting in a central pool with 525 lakh tonnes of rice against an annual requirement of almost 400 lakh tonnes for welfare schemes.
- From October 1, 2023, to the end of January, the government sold 1.66 lakh tonnes of rice in the open market.
- Factors Contributing to Price Increases:
- The Minimum Support Price for rice has risen over the last five years.
- Increasing costs of transport and storage contribute to higher retail rice prices.
- Production drops in rice-consuming states, particularly for widely consumed varieties, have impacted prices.
- Despite government measures, non-basmati rice exports have surged in recent years, reaching 16.1 million tonnes in 2022-2023.
- Traders mention that the export duty imposed by the government is offset by high international prices.
- Rice available in the retail market is from the previous season’s stock, and with a shortfall in arrivals, prices may continue to rise.
- Recommended Government Actions:
- Millers in northern states suggest prioritizing rice sale for consumption, ethanol production, and cattle feed.
- The government should analyze stock data, particularly for the most consumed varieties, to make informed decisions about future actions.
About Bharat Rice
- Bharat rice is a type of rice introduced by the Indian government at a subsidized rate of Rs. 29 per kg to provide relief to consumers.
- It is a variety of non-basmati rice, which is the most commonly grown type of rice in India.
- The government’s initiative aims to alleviate the impact of a 15% increase in food prices.
- Bharat rice is produced by various rice mills and is available for purchase at government-approved outlets.
- It is not a specific brand of rice, but rather a type of rice that is being sold at a discounted rate to provide relief to consumers.
Rice Cultivation in India
- Rice cultivation in India is intricately linked with the monsoon cycle.
- The process begins with the onset of the southwest monsoon in June and extends until the end of July.
- Monsoon plays a vital role in providing the necessary soil moisture for early germination and rapid growth of rice crops.
- Farmers engage in field preparation and transplant new rice seedlings into waterlogged paddy fields during the sowing phase, typically occurring from July to August.
- Seasonal Progression:
- Sowing (July to August): Farmers prepare fields and transplant rice seedlings during the monsoon, capitalizing on wet conditions.
- Maturation (Post-Monsoon): As the monsoon season concludes, rice paddies mature, and grains develop.
- Harvesting (October to November): Harvesting occurs, influenced by rice variety and regional factors.
- Production Growth Over the Years:
- In the fiscal year 1980, India’s rice production was 53.6 million tonnes, witnessing a significant increase over the years.
- By the fiscal year 2020-21, rice production reached an impressive 120 million tonnes.
- The projected rice production for 2022-23 is estimated at 1308.37 lakh tonnes.
- Dominant Rice-Producing States:
- Key states shaping India’s rice landscape include West Bengal, Uttar Pradesh, Odisha, Tamil Nadu, Andhra Pradesh, and Punjab.
- Together, these states contribute to 72% of India’s total rice output.