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GS Paper III – Major crops cropping patterns in various parts of the country, different types of irrigation and irrigation systems storage, transport and marketing of agricultural produce and issues and related constraints.

Farmers seek policy changes to resolve agrarian crisis

What’s Happening-
Thousands of farmers gathered here to take part in a massive rally organised under the banner of the All India Kisan Sabha (AIKS) to highlight the Bharatiya Janata Party government’s policies which they said had led to an agrarian crisis.
Farmers, peasants and agricultural labourers were mobilised in different parts of the Rajasthan State during the last two months for the rally.

Key Points discussed were:

No tangible relief’

  • Though the farmers’ struggle had forced the State government to withdraw the increase in electricity rates, they should not expect any tangible relief unless the ruling party changes its neo-liberal economic policies in agricultural and the power sectors.

Policy reforms:

  • The farmers to strengthen their unity and put pressure on the governments at the Centre and in the States to go for policy reforms.
  • They believe real change would come only through a political transformation.
  • The issue of the public sector discoms not releasing agricultural power connections and increasing the load at their whim in Sikar district.

Other Demands:

  1. Remunerative prices for agricultural produce,
  2. Changing the crop insurance rules in favour of farmers and
  3. Waiving agricultural loans.

Background-
Power tariff hike:
The call for joining the march to Jaipur was initially given to protest against the increase in agricultural power tariff by 5.5% in September last year.Despite the rollback of the tariff hike last month, the farmers’ body, backed by CPI(M), decided to go ahead with the agitation, saying a number of other issues were yet to be resolved.

GS Paper III – Indian Economy and issues relating to planning, mobilization of resources.

GST levy may go up to 40%, 4-slab structure to remain

What’s Happening-
The GST levy may go up to 40% after the GST Council proposed raising the peak rate in the Bill to 20%, from the current 14%, to obviate the need for approaching Parliament for any change in rates in future.
The union government is looking at GST rollout from July 1.

Key Points discussed were:

  • The model Goods and Services Tax Bill will replace the clause which states the tax rate “not exceeding 14%, with “not exceeding 20%” when it comes up for debate in Parliament during the second phase of Budget session beginning next week.

Four-slab structure:

  • The change in the peak rate will not alter the 4-slab rate structure of 5, 12, 18 and 28% agreed upon last year for the moment.
  • The revised draft of model GST law, which was made public in November 2016, provides for a maximum rate of tax under the new regime at 14% (14% central GST and an equal state GST, taking the total to 28 %).
  • There shall be levied a tax called the central/state goods and services tax (CGST/SGST) on all intra-state supplies of goods and/or services… at such rates as may be notified by the central/state government… but not exceeding 14 % on the recommendation of the Council and collected in such manner as may be prescribed,” the draft law states.

GST Council:

  • The GST Council, headed by Finance Minister Arun Jaitley and comprising representatives of all states, has agreed to keep the upper band of the rate in the law at 20%.
  • Mirroring the model GST law, the CGST, the SGST and the UTGST law will be firmed up by the Centre, states and Union Territories, respectively.
  • The Centre plans to introduce in Parliament the Central GST (CGST) Bill in the forthcoming session beginning March 9.
  • After it is ratified, the states will introduce the State GST (SGST) Bill in their respective legislative Assemblies.

Background-
Goods and Services Tax (GST) is an   and will be applicable throughout India.Which will replace multiple cascading taxes levied by the  and  governments.
It was introduced as , following the passage of Constitution 122nd Amendment Bill.
The GST is governed by a GST Council and its Chairman is the .
There is a special rate of 0.25% on rough precious and semi-precious stones and 3% on gold.
In addition a  of 15% or other rates on top of 28% GST applies on few items like aerated drinks, luxury cars and tobacco products.
GST was initially proposed to replace a slew of indirect taxes with a unified tax.
GST is going to set dramatically reshape the country’s 2 trillion-dollar Indian economy.

GS Paper II -Public Distribution System- objectives, functioning, limitations, revamping; issues of buffer stocks and food security

Public procurement needs to be opened up

What’s Happening-
Public procurement in India should gradually be opened up in a fair manner to ensure greater competition, while privatisation of public assets has to be done keeping in mind the country’s socio-economic needs and objectives, Commerce Minister Nirmala Sitharaman said.

Key Points discussed were: According to Ms. Sitharaman

  • Public procurement (procurement by government/its agencies for their own consumption and not for commercial resale) in India is estimated to be about 30% of the country’s GDP, with sectors such as defence, railways and telecom — having state-owned enterprises — accounting for a major portion of it, Ms. Sitharaman said at the National Conference on ‘Economics of Competition Law’ organised by the fair-trade watchdog Competition Commission of India (CCI).

Fair manner’

  • India has to open it (public procurement) up, but layer by layer in a fair manner even in this transition stage, for greater competition,
  • Collusive bidding and cartelisation (in public procurement) are very serious. The CCI has an important role to play to prevent them and to ensure that there is fair trade and ultimately the consumer benefits,”

Russia, China:

  • Chief economic adviser Arvind Subramanian said privatisation per se will not lead to greater competition and referred to the case of Russia and China saying privatisation there has led to oligarchy.
  • Mr. Subramanian said regulatory institutions in India are still a “work-in-progress,” adding that they need to learn that instead of using blunt instruments such as bans. What will work better is to have a nuanced approach and intervention.
  • India is becoming a highly litigious society, in turn leading to a situation promoting decision-making by the judiciary, and the judiciary at times becoming more powerful than the executive and legislature.

Background-
Targeted Public Distribution System (TPDS) is operated under the joint responsibility of the Central and the State/Union Territory (UT) Governments.
Central Government is responsible for procurement, allocation and transportation of food grains upto the designated depots of the Food Corporation of India.
The operational responsibilities for allocation and distribution of food grains within the States/UTs, identification of eligible beneficiaries, issuance of ration cards to them and supervision over and monitoring of functioning of Fair Price Shops (FPSs) rest with the concerned State/UT Governments.