Posted in UPSC

GS 1 Prelim 2019/2 (Solved)

updated on June 6th, 2019

GS 1 Prelim 2019/2 (Solved)

2. What was the purpose of Inter-Creditor Agreement signed by Indian banks and financial institutions recently?

(a) To lessen the Government of India’s perennial burden of fiscal deficit and current account deficit

(b) To support the infrastructure projects of Central and State Governments

(c) To act as an independent regulator in case of applications for loans of Rs. 50 crore or more which are under consortium lending

(d) To aim at faster resolution of stressed assets of ₹ 50 crore or more which are under consortium lending

Answer is ‘D’

Direct Question from the news papers , the state below is Right .

  • To aim at faster resolution of stressed assets of ₹ 50 crores or more which are under consortium lending
  • By this, the bad loan is either sold or bought by a single bank and hence, they can resolve it fast.
  • For further read NPAs And Stressed Assets

Related questions from the past

 With reference to the governance of public sector banking in India, consider the following statements :

1. Capital infusion into public sector banks by the Government of India has steadily increased in the last decade.

2. To put the public sector banks in order, the merger of associate banks with the parent State Bank of India has been affected.

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

Answer is ‘B’

for analysis of this question see GS 1 prelim 2018/96

The NPAs and their resolution might find its place in future UPSC questions .So follow them sincerely in News .

PS : How to prepare Indian Economy for UPSC ?

Advertisements
Posted in Geography, Indian Economy

Agriculture in India

updated on March 29th, 2019

You know that India has diversified topography. You have already learned about it in the lesson on the physiography of India. The country has Himalayan mountain ranges extending from Jammu and Kashmir in the west to Arunachal Pradesh in the North-East. They have hill ranges in the form of the Eastern Ghats and the Western Ghats. Do you know India has one of the largest plain areas of the world in the form of Indo-Ganga plain? The central part of India is dominated by the plateau area. Apart from variation in landform, the country has varieties of climatic conditions and soil types. These physical variations along with other factors like availability of irrigation, use of machinery, modern agricultural inputs like High Yielding Varieties (HYV) of seeds, insecticides and pesticides have played their respective roles in the evolution of different farming practices in India. Some of the major types of farming are discussed below.

SUBSISTENCE AND COMMERCIAL FARMING

Subsistence and commercial farming: Majority of farmers in India practices subsistence farming. This means farming for own consumption. In other words, the entire production is largely consumed by the farmers and their family and they do not have any surplus to sell in the market. In this type of farming, landholdings are small and fragmented. Cultivation techniques are primitive and simple. In other words, there is a total absence of modern equipment like tractors and farm inputs like chemical fertilizers, insecticides, and pesticides. In this farming, farmers mostly cultivate cereals along with oilseeds, pulses, vegetables, and sugarcane. Commercial farming is just the opposite of subsistence farming. In this case, most of the produce is sold in the market for earning money. In this system, farmers use inputs like irrigation, chemical fertilizers, insecticides, pesticides and High Yielding Varieties of seeds etc. Some of the major commercial crops grown in different parts of India are cotton, jute, sugarcane, groundnut etc. Rice farming in Haryana is mainly for commercial purpose as people of this area are predominantly wheat eaters. However, in East and North-Eastern states of India, rice cultivation would be large of subsistence type.

INTENSIVE AND EXTENSIVE FARMING

Intensive and Extensive Farming: The basic difference between these two types of farming is the amount of production per unit of land. In comparison with temperate areas of the USA, Canada, and former USSR, India does not practice extensive cultivation. When we use a large patch of land for cultivation then we call it extensive farming. Here, total production may be high due to the larger area but per unit are production is low. Intensive Farming records high production per unit of land. The best example of intensive cultivation is in Japan where the availability of land for cultivation is very limited. Similar kind of situation can be observed in the state of Kerala in India.

PLANTATION FARMING

Plantation Farming: It is an estate where a single cash crop is grown for sale. This type of agriculture involves growing and processing of a single cash crop purely meant for sale. Tea, coffee, rubber, banana, and spices are all examples of plantation crops. Most of these crops were introduced in India by the Britishers in the 19th Century.

MIXED FARMING

Mixed Farming: It is a situation in which both raising crops and rearing animals are carried on simultaneously. Here farmers engaged in mixed farming are economically better of than others.

All classifications are based on the nature and purpose of farming. It may overlap. For example, Banana is a plantation type of farming. It can also be classified as commercial farming.

FEATURES OF INDIAN AGRICULTURE

(a) Subsistence Agriculture: As mentioned earlier, most parts of India have subsistence agriculture. This type of agriculture has been practised in India for several hundreds of years and still prevails in a larger part of India in spite of the large scale change in agricultural practices after independence.

(b) Pressure of population on Agriculture: Despite increase in urbanization and industrialization, about 70% of population is still directly or indirectly dependent on agriculture.

(c) Mechanization of farming: Green Revolution took place in India in the late sixties and early seventies. After more than forty years of Green Revolution and revolution in agricultural machinery and equipments, complete mechanization is still a distant dream

(d) Dependence upon monsoon: Since independence, there has been a rapid expansion of irrigation infrastructure. Despite the large scale expansion, only about one third of total cropped area is irrigated today. As a consequence, two third of cropped areas is still dependent upon monsoon. As you know, monsoon in India is uncertain and unreliable. This has become even more unreliable due to change in climate.

(e) Variety of crops: Can you guess why India has a variety of crops? As mentioned in the beginning of the lesson, India has diversity of topography, climate and soil. Since India has both tropical and temperate climate, crops of both the climate are found in India. There are very few countries in the world that have variety comparable to that of India. You would realize that when we would discuss the different type of crops in detail. Look at the table No.1 to get an idea.

(f) Predominance of food crops: Since Indian agriculture has to feed a large population, production of food crops is the first priority of the farmers almost everywhere in the country. However, in recent years, there has been a decline in the share of land used for food crops due to various other commercially most advantageous uses of these land.

(g) Seasonal patterns: India has three distinct agricultural/cropping seasons. You might have heard about kharif, rabi and zaid. In India, there are specific crops grown in these three seasons. For example, rice is a Kharif crop whereas wheat is a rabi crop.

MAJOR CROPS IN INDIA

India grows almost each and every crop. Can you think why? If we consider the varieties of crop grown from Kashmir to Kanyakumari and western coast of Gujarat to extreme north eastern states of Arunachal Pradesh, there would be hundreds of crops. We group all these crops into four broad types. Let us discuss the main crops under each type in detail:

Table 12.1

Sl. NoTypes of CropsMeaningMajor Crops
1.



Food grains



Crops that are
used for human
consumption

Rice, Wheat, 
Maize, Millets, 
Pulses and Oil 
seeds
2.




Commercial Crops




Crops which are 
grown for sale 
either in raw form
or in semi-process-ed form
Cotton, Jute,
Sugarcane, 
Tobacco and 
Oil-seeds 

3.




Plantation Crops




Crops which are 
grown on 
Plantations 
covering large 
estates
Tea, Coffee,
Coconut and
Rubber


4.




Horticulture




Sections of 
agriculture in
which Fruits and
Vegetables are 
grown
Fruits and
Vegetables



Agriculture remains the most important sector of the Indian economy, whether it be the pre-independence or the post-independence periods. This fact is emphatically proved by a large number of people who depend on it for their livelihood. Before starting any discussion on Indian agriculture, we must look into its special features:

(i) From the monetary point of view, the share of the agriculture sector in the
economy remains at 17.4 percent of the GDP.1 In the fiscal 1950–51 agriculture accounted for 55.4 percent of the GDP.

(ii) The share of agriculture has been falling in the country’s gross income, while the industrial and services sectors’ shares have been on a rise constantly. But from the livelihood point of view still, 49 percent of the people of India depends on the agriculture2 sector. This makes it a more important sector than the industry and the services (for Nepal and Tanzania the dependency for livelihood on agriculture is still higher at 93 percent and 81 percent, respectively). It means that 49 percent of the population lives with only 17.4 percent of the total income of the Indian economy—this fact clearly substantiates the reason why the people who depend on agriculture are poor. In the developed economies such as the USA, France, Norway, the UK, and Japan, agriculture contributes only 2 percent of their GDP with only 2 percent of the people dependent on this sector for their livelihood.

(iii) Agriculture is not only the biggest sector of the economy but also the biggest private sector too. It is the only profession which still carries no burden of individual income tax.

(iv) This is the biggest unorganised sector of the economy accounting for more than 90 per cent share in the total unorganised labour-force (93.4 per cent of the total labour force of the economy, i.e., 39.8 crores is employed in the unorganised sector).3

(v) India has emerged as a significant agriexporter in a few crops, namely—cotton, rice, meat, oil meals, spice, guar gum meal, and sugar. As per4 the WTO’s Trade Statistics, the share of India’s agricultural exports and imports in the world trade in 2016 were 2.40 percent and 1.40 percent, respectively. Agricultural exports as a percentage of agricultural GDP increased from 7.95 percent in 2009–10 to 12.5 percent in 2016–17. During the same period, agricultural imports as a percentage of agricultural GDP also increased from 4.90 percent to 6.1 percent.

(vi) According to the export figures, agriculture is deeply related to industrial growth and the national income in India—1 percent increase in the agricultural growth leads to 0.5 percent increase in industrial output (growth) and 0.7 percent increase in the national income of India.

(vii) The industrial sector was selected as the ‘prime moving force’ of the economy in the late 1940s. But due to market failure the sector failed to lead the economy after independence. Without increasing the income of the people who depend on agriculture for their livelihood, the market was not going to support the industries. As a result, the Government of India announced agriculture as the prime moving force of the economy only in 2002.

(viii) With 1 percent increase in the share of agriculture in India’s total exports, the money which flows into agriculture is calculated to be Rs. 8,500 crores.

(ix) In 2017-18 foodgrains production is estimated to be a record 277.49 million tonnes of which is around percent higher than the total production of 2015-16 (252.23 MT).

(x) The productivity of major crops is lower in the case of India in comparison to the world’s best practice. Though it has been improving at a slow pace, the productivity of rice, wheat and pulses improved from 2,202 kg, 2,900 kg and 625 kg per hectare of 2007–08 to 2,390 kg, 2,872 kg (falling from 3,026 kg of 2011-13) and 744 kg per hectare in 2016-17.

(xi) A total of 66.1 per cent of the cropped area in the economy still depends on the uncertainties of monsoon for their irrigational requirements

Kharif & Rabi

There are certain special terms used to understand the cropping seasons of India. The agricultural crop year in India is from July to June. The Indian cropping season is classified into two main seasons- (i) Kharif and (ii) rabi based on the monsoon. The Kharif cropping season is from July to October during the South-West/Summer Monsoon and the rabi cropping season is from October to March (North-East/Returning/Winter Monsoon). The crops grown between March and June are summer crops, known as jays.

Pakistan and Bangladesh are two other countries that are using the term ‘kharif’ and ‘rabi’ to describe their cropping patterns. The terms ‘kharif’ and ‘rabi’ originate from the Arabic language where Kharif means autumn and rabi means spring.

The Kharif crops include rice, maize, sorghum, pearl millet/bajra, finger millet/ragi (cereals), arhar (pulses), soyabean, groundnut (oilseeds), cotton, etc. The rabi crops include wheat, barley, oats (cereals), chickpea/gram (pulses), linseed, mustard (oilseeds) etc.

Food Philosophy Of India

Indian food philosophy11 is generally seen divided into three phases with their own objectives and challenges:

The First Phase

This phase continued for the first three decades after Independence. The main aim and the struggle of this phase were producing as many foodgrains as required by the Indian population, i.e., achieving physical access to food.

The idea of the Green Revolution at the end of this phase at least gave India the confidence of realizing the objective. At the end of the 1980s, India was a self-sufficient country with regard to food.

The Second Phase

Meanwhile, India was celebrating its success in the first phase, a new challenge confronted the country—achieving economic access to food. The situation went on worsening and by early 2000 there was a paradoxical situation in the country when it was having more than three times buffer stocks of foodgrains in the central pool, but in several states people were dying due to lack of food—a complete mockery of the logic behind maintaining buffer stock, success of green revolution and the concept of India being a welfare state.12 The Supreme Court intervened after a PIL was filed by the People’s Union for Civil Liberties (PUCL) and a national level Food for Work Programme came up (to be merged with the National Rural Employment Guarantee Scheme). The courts took the governments on task if foodgrains rot either in godowns or destroyed in oceans to manage market price for the foodgrains, or if the Centre had to go for exporting wheat at the very low price. In this process India emerges, das he seventh largest exporter of wheat (2002). Basically, we were exporting the share of wheat which was not consumed by many Indians due to lack of economic reach to food.

As the inputs of the Green Revolution were costlier, its output naturally was to be costlier. To fight the situation there should have been a time-bound and target-oriented macro-economic policy support, which could deliver comparatively increase in the purchasing capacity of the masses to make food affordable for them. India badly failed in it. The crisis was managed by throwing higher and higher subsidies ultimately affecting government expenditure on the infrastructural shortcomings in the agriculture sector. Even after providing higher food subsidies, some people failed to purchase food and they were left with no option but to die of hunger.

India is still in this phase and trying to solve the crisis through twin approach, firstly, by creating the maximum number of gainful employment, and secondly, by cutting the cost of foodgrains (via the second green revolution based on biotechnology).

It must be kept in mind that the food self-sufficiency happiness was a temporary thing for India. By the mid-1990s, India realized that its foodgrain production was lagging behind its population increase. It means India is still fighting to achieve physical reach to the required level of food.

The Third Phase

By the end of the 1980s, world experts started questioning the very way the world was carrying on with different modes of production. Agricultural activity was one among them which had become hugely based on industries (chemical fertilizers, pesticides, tractors, etc.). All developed economies had declared their agriculture to be an industry.

It was time to look back and introspect. By the early 1990s, several countries started going for ecologically friendly methods and techniques of industrial, agricultural and services sectors development. The much-hyped Green Revolution was declared ecologically untenable and the world headed for organic farming, green farming, etc.

It meant that achieving physical and economic reach to food was not the only challenge India was facing, but such aims should not be realised at the cost of the precious ecology and biodiversity—a new challenge. India needed a new kind of green revolution which could deliver it the physical, economic as well as ecological access to food—the Second Green Revolution—an all-in-one approach towards the agriculture sector.

Cropping Patterns

The set and combination of crops which farmers opt for in a particular region, in their farm practices, is cropping pattern of the region. The multiplicity of cropping systems has been one of the main features of Indian agriculture and it is attributed to rainfed agriculture and prevailing socio-economic situations of the farming community.

The cropping pattern in India has undergone significant changes over time. As the cultivated the area remains more or less constant, the increased demand for food, because of increase in population and urbanization, puts agricultural land under stress, resulting in crop intensification and crop substitution of food crops with commercial crops.

Cropping systems of a region are decided, by and large, by a number of soil and climatic parameters, which determine the overall the agro-ecological setting for nourishment and appropriateness of a crop or set of crops for cultivation. Nevertheless, at the farmers’ level, potential productivity and monetary benefits act as guiding principles, while opting for a particular crop or a cropping system. These decisions with respect to the choice of crops and cropping systems are further narrowed down under the influence of several other forces related to infrastructure facilities, socio-economic and technological factors, all operating interactively at the micro-level. These factors are:

(i) Geographical factors: Soil, landforms, precipitation, moisture, altitude, etc.
(ii) Socio-cultural factors: Food habits, festivals, tradition, etc.
(iii) Infrastructure factors: Irrigation, transport, storage, trade and marketing, post-harvest handling and processing, etc.
(iv) Economic factors: Financial resource base, land ownership, size and type of land holding, household needs of food, fodder, fuel, fiber and finance, labor availability, etc.
(v) Technological factors: Improved varieties of seeds and plants, mechanisation, plant protection, access to information, etc.

Prevalent Cropping Systems

Multiplicity of cropping systems has been one of the main features of Indian agriculture. This may be attributed to the following two major factors:

(i) Rainfed agriculture still accounts for over 92.8 million hectares or 65 percent of the cropped area. A large diversity of cropping systems exist under rainfed and dryland areas with an over-riding practice of intercropping, due to greater risks involved in cultivating larger area under a particular crop.
(ii) Due to prevailing socio-economic situations, such as dependency of a large population on agriculture, small landholding size, very high population pressure on the land resource, etc.

Improving household food security has been an issue of supreme importance to many million farmers of India, with the following farm holdings—

(a) 56.15 million marginal (<1.0 ha),
(b) 17.92 million small (1.0–2.0 ha), and
(c) 13.25 million semi-medium (2.0–4.0 ha).

They together are 90 per cent of the 97.15 million operational holdings. An important consequence of this has been that crop production in India remained to be considered, by and large, a subsistence rather than commercial activity. One of the typical characteristics of subsistence farming is that most of the farmers resort to grow a number of crops on their farm holdings, primarily to fulfil their household needs and follow the practice of rotating a particular crop combination over a period of 3–4 year, interchangeably on different farm fields.

Under the influence of all the above factors, te cropping systems remain dynamic in time and space, making it difficult to precisely determine their spread using conventional methods, over a large territory. However, it has been estimated that more than 250 double cropping systems are followed throughout the country. Based on the rationale of spread of crops in each district in the country, 30 important cropping systems have been identified— rice-wheat, rice-rice, rice-gram, rice-mustard, rice groundnut, rice-sorghum, pearl millet-gram, pearl millet-mustard, pearl millet-sorghum, cotton-wheat, cotton-gram, cotton-sorghum, cotton safflower, cotton-groundnut, maize-wheat, maize-gram, sugarcane-wheat, soybean-wheat, sorghum-sorghum, groundnut-wheat, sorghum groundnut, groundnut-rice, sorghum-wheat, sorghum-gram, pigeon pea-sorghum, groundnut, sorghum-rice, groundnut-sorghum and soybean gram.

Changes In The Cropping Patterns

Due to various reasons, the cropping pattern of Indian farmers have undergone changes over time—we can see them in the following three phases.

Pre-Green Revolution Period: In this phase we see Indian farmers going in for a cropping system (generally), which was primarily decided by the socio-cultural and economic factors—more or less they were closer to being sustainable as they had developed through the long process of trial and error the of their forefathers. A combination of crops we see being grown by farmers across the country with a judicious mixture of crops till the Green Revolution. This was a period of subsistence farming with a high dependency of the population for livelihood on it. The nature of the cropping pattern was too stubborn to change by incentives.

Green Revolution Period: Under the spell of the New Agricultural Strategy (NAS), more popularly as the Green Revolution, since 1965 onwards, we see a major shift in the cropping pattern of Indian farmers. The main forces of change were economic, infrastructural and technological. Initiation of high yielding varieties of seeds, financial supports of chemical and other inputs together with the provisions of minimum support price (MSP) gave a major shift to the farmers’ choices of crops. In the GR regions, we see a highly repetitive kind of cropping pattern with the ‘wheat-rice’ having predominance. In coming times, the Government of India started announcing MSPs for many other crops, which had its own impact on the farmers’ choices of crops in their cropping systems.

This period was primarily guided by the singular objective of attaining self-sufficiency in food, which may lead the nation to attain food security. By the late 1980s, India was able to manage self-sufficiency in foodgrains. We see the emergence of big farmers in the GR regions for whom at least farming did not remain subsistence —commercial dimension enters the Indian farm practices, for the first time.

This is the period when the traditional cropping pattern of India got exposed to new inputs of farming and geographical dimensions of crop selection were undermined. Soon (by 1996–97), the government came to know that the GR farm practices were ecologically damaging and unsustainable. The Government of India officially adopts the idea of sustainable agriculture by 1997.

Reform Period: Another wave of change in the cropping pattern comes with the process of economic reforms commencing in 1991, which brings in new opportunities together with the challenges in the area of farm sector:

  • The issue of food security continued to give pressure on policymakers as foodgrains production was not able to keep pace with the population growth rate. The situation becomes even more serious with Food Rights (NFSA) given to a large population of the country recently.
  • Globalization brought in new opportunities of farm exports together with the challenge of cheap production (need of farm mechanization and commercial farming so that Indian farm products can compete in the global market) in wake of the agricultural provisions of the World Trade Organisation. It made India think of mobilizing huge investments in the sector. India accepts agriculture as an industry (2000) giving a green signal to corporate and contract farmings.
  • Ecologically sustainable farming becomes the need of the hour due to ensuing danger of climate change and environment related constraints.
  • The Government of India proposes for
  • the Second Green Revolution in 2002
  • with inclusion of the genetically modified
  • foods (GMFs).

In the wake of the above-cited factors, experts and the governments expect a major change coming in the cropping patterns of the country. Now, the issue is, how to face up the emerging challenges together with making farm practices and cropping patterns sustainable. Experts suggested the following steps (by late 1990s), which were discussed and almost accepted by the Planning Commission together with the Ministry of Agriculture:

(i) Putting in place the right kind of agricultural policy with the provisions of prize and punishment, inclining farmers to go for the right kind of cropping pattern.
(ii) Evolving the right trade policy, which can protect Indian farm products from the negative affects of global competition and enable Indian agriculture to expand exports.
(iii) Bringing in proper labour laws, and land leasing and acquisition policies to encourage the entry of Indian and foreign private sector in agriculture.
(iv) Keep pressurising the WTO so that a neutral and judicious regime of agricultural provisions are evolved by it accepting the realities of India’s subsistence farming and issues related with the high agriculture subsidies, which developed countries forward to their farm sector.
(v) Evolving the right environmental policy framework for the initiation of GMFs in the farm sector and promotion to the non-GMF related research and development in the country, through corporate participation.
(vi) Factoring in the issue of environment and climate change in the domain of agricultural policy framework.
(vii) Emphasising the need of farmers’ awareness and education for the changing times. For this the PRIs involvement will be crucial.
(viii) Attending to issues like plant protection, checking farm wastage, pest management, commercial production and commercial availability of green inputs.
(ix) Evolving the right kind of credit and insurance policies for the farm sector at the macro and micro levels.
(x) Immediate inclusion of other factor in the farm sector like, a national market for agricultural products, upstream and downstream requirements, proper supply chain management, logistics, agroprocessing industries, storage, etc.

PS : How to prepare Indian Economy for UPSC ?

Help us by contributing and making this site better by commenting below or mailing us at discussanswer@gmail.com . You can send us articles and suggestions .

Posted in General Studies 3, Indian Economy

Indian Economy – How to Prepare Indian Economy for UPSC?

updated on May 23rd, 2019

Syllabus of UPSC covered under Indian Economy

UPSC Prelims Syllabus

Economic and Social Development – Sustainable Development, Poverty, Inclusion, Demographics, Social Sector initiatives, etc

UPSC Mains Syllabus

Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.

Inclusive growth and issues arising from it.

Government Budgeting.

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; e-technology in the aid of farmers

Issues related to direct and indirect farm subsidies and minimum support prices; Public Distribution System objectives, functioning, limitations, revamping; issues of buffer stocks and food security; Technology missions; economics of animal-rearing.

Food processing and related industries in India- scope and significance, location, upstream and downstream requirements, supply chain management.

Land reforms in India.

Effects of liberalization on the economy, changes in industrial policy and their effects on industrial growth.

Infrastructure: Energy, Ports, Roads, Airports, Railways etc.

Investment models.

Books and Material Source

Indian Economics by Ramesh Singh is good for concept building. It covers static as well as current portion of syllabus.


Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment

Inflation

Monetary Institutions

Market Regulators and Related Organization

Government Schemes

Types of Economies


Inclusive growth and issues arising from it.

Climate Change and Indian Economy


Sustainable Development


Government Budgeting

Budget in India

Taxes in India


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; e-technology in the aid of farmers


Issues related to direct and indirect farm subsidies and minimum support prices; Public Distribution System objectives, functioning, limitations, revamping; issues of buffer stocks and food security; Technology missions; economics of animal-rearing.


Food processing and related industries in India- scope and significance, location, upstream and downstream requirements, supply chain management.


Land reforms in India.


Effects of liberalization on the economy, changes in industrial policy and their effects on industrial growth.

Industries in India

Minerals and ores

International Organisations for economic Development

Development Indices

Infrastructure: Energy, Ports, Roads, Airports, Railways etc.

Investment models.

Advertisements