Q.1) Farm loan waiver is only an element of immediate relief. Discuss the possibilities of Income Support Scheme as alternative to Loan Waiver scheme?
Drawbacks of farm loan waivers:
- As per RBI, the gross fiscal deficit (GFD) of States rose to 3.1% of GDP in 2017-18, breaching the threshold of 3% GSDP recommended by Finance Commission. Farm debt waivers announced by five large States could widen the fiscal deficit by ₹1,07,700 crore.
- A report by Merrill Lynch says that farm loan waivers could rise up to Rs 2.7 lakh crore by the next year.
- ‘Waive-off’ of farm loans frees the borrower completely from liability to pay and becomes a direct burden on State finances.
- Farm-loan waivers do not resolve the agriculture crisis.
- Waivers clear bank debt but fail to address the private debt holdings of farmers, which make up most part of farmer debt.
Rythu Bandhu scheme of Telangana shows the alternative plan to support farmers, through income support. The investment support programme provides financial assistance of ₹4,000 per acre per season to all land-owning farmers in Telangana.
Benefits of income support scheme:
- States have failed to deliver on their promises of loan waivers due to paucity of funds which led to delayed execution and excluded many deserving farmers. For instance, Punjab could disburse only 35% of the committed farm loan waiver.
- Income transfers are more equitable and do not impact either the banking ecosystem (leading to defaults by farmers and banks advancing lower volumes of fresh credit) or crop choices.
- When farmers are bearing the burden of low food inflation, there is no better solution than to put money directly in their hands.
- Income transfers are inclusive, easy to administer and less prone to leakage.
Q.2) “Aviral Ganga” is essential predecessor for “Nirmal Ganga”. In this context discuss importance of minimum ecological flow and river basin-based management plan?
Importance of Aviral Dhara:
- Ensures that the river doesn’t dry in the peak season.
- Manages the needs of different needs of water thus limiting the impact of hydro electric needs on river flow.
- Many recent reports point out that the Ganga is drying out in its upper reaches, where it is meant to have voluminous flow.
River Basin Management Plan:
It can be grasped in terms of four defining concepts: “Aviral Dhara” (Continuous Flow”), “Nirmal Dhara”(“Unpolluted Flow”), Geologic Entity, and Ecological Entity.
- Puts in place comprehensive measures for restoration of the wholesomeness of the Ganga ecosystem and improvement of its ecological health.
- Efficiently manages the competing water uses in river basin.
- To ensure conservation of the area for food and water security.
Q.3) Give an account of India Post Payment Bank (IPPB). Elaborate on the potential of IPPB in bringing financial inclusion in India.
IPPB – features:
- It will carry out most banking operations like accepting deposits but won’t advance loans or issue credit cards.
- The payments bank will accept deposits of up to Rs 1 lakh, offer remittance services, mobile payments/transfers/purchases and other banking services like ATM/debit cards, net banking and third-party fund transfers.
- Deposits in any account that exceed ₹ 1 lakh would be automatically converted into post office savings account.
- The government owns 100% stake.
Potential in financial inclusion:
- It aims to promote digital payments mainly in the rural and remote areas of the country.
- It will be helpful to rural masses and urban migrants.
- It is estimated that about 18% of the Indian population is not being served by the banking system. IPPB can be seen as filling an important gap in the scheme of inclusion.
- IT will carry out most banking operations, essential under various welfare schemes run by the governments.
Q.4) Skill India Programme has capacity to reap rich demographic dividend, however programme faces numerous lacunae. In the light of the statement critically analyse the skill development programme.
Skill India programme – features:
The Skill India Mission was launched in 2015. Skill India Mission has revised the target upwards and now aims to train 400 million people by 2022.
- Short Term Training – The Short Term Training imparted at PMKVY Training Centres (TCs) is expected to benefit candidates of Indian nationality who are either school/ college dropouts or unemployed.
- Short Term Training – The Short Term Training imparted at PMKVY Training Centres (TCs) is expected to benefit candidates of Indian nationality who are either school/college dropouts or unemployed.
- Special Projects – The Special Projects component of PMKVY envisages the creation of a platform that will facilitate trainings in special areas and/or premises of Government bodies, Corporates or Industry bodies, and trainings in special job roles not defined under the available Qualification Packs (QPs)/National Occupational Standards (NOSs).
Challenges faced by the scheme:
- Future growth could turn out to be jobless due to de-industrialization, de-globalization, and the fourth industrial revolution and technological progress.
- Heterogeneity among the states in their demographic profile – while the peninsular states are exhibiting a pattern similar to the developed economies, hinterland states are relatively young and dynamic, characterized by a rising working age population.
- Limited and unequal distribution of training capacities vis-a-vis youth demographics.
- Availability of good quality trainers due to lack of focus on development of trainers’ training programmes and careers progression pathways for them.
- Multiplicity in assessment and certification systems leading to inconsistent outcomes and confusion to the employers.
- Sharda Prasad Committee on Skill Development – many of the existing skill councils have overlapping roles.