Agriculture sector: Challenges & Reforms Required

The Economic Survey 2013-14 released in New Delhi today has highlighted several challenges and reforms required in the agriculture sector. The Economic Survey states that as a concomitant of growth, the share of agriculture and allied sector in gross domestic product (GDP) declined to 15.2% during the Eleventh Plan and further to 13.9% in 2013-14 (provisional estimates—PE). While it still accounts for about 54.6% of total employment (Census 2011), there has been a decline in the absolute number of cultivators, which is unprecedented, from 127.3 million (Census 2001) to 118.7 million (Census 2011).

According to the Economic Survey, growth rates of productivity in agriculture sector are far below global standards; productivity levels of rice and wheat have declined after the green revolution of the 1980s. Another issue is soil degradation due to declining fertilizer-use efficiency.

Also, the food subsidy has increased substantially in the past few years. Food subsidy was Rs. 92,000 crore in 2013-14.

With 60 per cent of the total foodgrains and oilseeds produced being grown in the kharif season, and with just about 35 per cent of arable area being irrigated, Indian agriculture is still dependent on rainfall. The second long-range forcast for the current year by the IMD for monsoon season indicates that the monsoon rainfall is likely to be 93 per cent of the LPA (model error ± 4 per cent), with 71 per cent probability of subnormal/deficit rainfall and 70 per cent occurrence of EL Nino. The government has put in place contingency measures in about 500 districts.

Currently, India is in an anomalous situation of being largely self-sufficient with large stocks of foodgrains on the one hand and registering high food inflation.

On domestic and international marketing, the plethora of government interventions that were used to build a marketing set up have actually served as barriers to trade. Removing market distortions will create greater competition in markets, promote efficiency and growth and facilitate the creation of a national agricultural market.

For establishing a national common market, the Economic Survey has recommended the following reforms:

I. Examine the APMC Act, EC Act, Land Tenancy Act, and any such legally created structures whose provisions are restrictive and create barriers to free trade.

II. Rigorously pursue alternate marketing initiatives, like direct marketing and contract farming.

III. Examine inclusion of agriculture related taxes under the General Goods and Services Tax (GST)

IV. Establish stable trade policy based on tariff interventions instead of non-tariff trade barriers.

V. Develop and initiate competition in the agro-processing sector. Incentivize the private sector to scale up investments.

VI. In this scenario of bumper production and stocks, a paradigm shift in the role of the government in all aspects of foodgrain production and distribution is necessary.

Civil Nuclear Co-Operation

India has signed civil nuclear cooperation agreements with France, United States (US), Russia, Namibia, Canada, Argentina, Kazakhstan, the Czech Republic and Republic of Korea; Memorandum of Understanding on civil nuclear cooperation has been signed with Mongolia. A joint declaration has also been signed with United Kingdom.

These agreements are in different stages of implementation. Recently the commercial contract for construction of two additional reactors at Kudankulam was finalized pursuant to the civil nuclear cooperation agreement with Russia. An Early Works Agreement has been concluded between Nuclear Power Corporation of India Ltd and Westinghouse Electric Company (WEC) of the US with regard to the construction of two nuclear power reactors at Mithi Virdi in Gujarat. Supply of uranium for fuelling India’s indigenous nuclear power reactors has also taken place from France, Russia and Kazakhstan pursuant to the signing of the above mentioned Agreements.

There is no proposal to review the 123 nuclear Agreements with the US.

Efficiency in Weather Forecasts

Earth System Science Organization-(ESSO-IMD) has formulated plan of Himalayan Meteorology Program to augment observing systems by deploying Doppler Weather Radars, rain radars, Automatic Weather Stations (AWSs), Automatic Rain Gauges (ARGs) etc. This plan has been shared with NDMA. The above observations will lead to improved understanding of the Himalayan weather in general and severe weather in particular. The assimilation of the above observational data will facilitate improvement in now-casting and forecasting.

The weather forecasts are given at three levels, national level from Delhi, North-West Region from Delhi and Local level, in this case from Dehradun. The National Weather Bulletin, based on the global model forecasts produced at 22Km grid scale, is issued four times a day, morning, mid-day, evening and night. It gives weather forecast for next three days, and outlook for subsequent four days. Apart from this, for severe weather, forecast is also provided under heading `Weather Warning for next Three Days.` Regional Weather Forecast Centre provide forecast (based on WRF model, 9 km, ensemble prediction system and unified model) for the NW region for next 48 hours as well as outlook for next 48 hours as an input for forecasting by state level meteorological centers in the region. The local level forecasts are provided twice a day based on above mentioned model forecasts as well as evolving synoptic situation (pressure, winds, rainfall from network of AWSs and ARGs, satellite and radar data). Twice weekly district level Agro-Meteorological Advisory Service (AAS) bulletins for next 120h are issued for use by the farming community.

The national level forecasts are provided to NDMA control room, NDRF as well as print and electronic media and is available on IMD website. The local forecasts are provided to all state and district level functionaries. A short-term forecast of low level winds (300-2100m) is also being provided for helicopter operations.

Based on scientific assessment of the need for further augmentation of observing system network expansion has been formulated. The upgradation of the observing system, high performance computing, communication, forecast/warning systems, product dissemination systems etc. are part of a continuous process by which state-of-the-art science and technology tools can be made accessible to the scientists engaged in weather research and forecasting towards enhancing the service quality.

Tsunami Warning System in Indian Ocean

The Indian Tsunami Early Warning Centre (ITEWC) was established and made fully functional since 2007 and is now rendering operational services as a Regional Tsunami Watch Provider (RTWP) for whole of the Indian Ocean Region by the Earth System Science Organization – Indian National Centre for Ocean Information Sciences (ESSO-INCOIS) located in Hyderabad. ITEWC comprises real-time seismic monitoring network broadband seismic stations apart from national and international seismic stations to detect under- sea tsunamigenic earthquakes from the two known subduction zones of the Andaman-Sumatra and the Markran coast in the Indian Ocean which can potentially affect the Indian coastal states and Island regions, a network of 6 real-time sea-level sensors with Bottom Pressure Recorders(BPR) in the open ocean, HF Radars for coastal currents and 25 coastal tide gauge stations to capture tsunami wave amplitude on 24 x 7 basis. The data is analysed on a continuous basis. All types of data collected from the ITEWC are fully archived and is fully accessible to the Decision Support System (DSS). A host of communication systems are being employed for timely dissemination of advisories.

The centre is capable of detecting tsunamigenic earthquakes occurring in the Indian Ocean region as well as in the Global Oceans within 10 minutes of their occurrence and disseminated the advisories to the concerned authorities within 20 minutes through various modes of communication like email, fax, SMS, GTS and website.

Performance of Manufacturing Sector

The performance of the manufacturing sector, in terms of its annual growth, has been fluctuating during the last 10 years. After experiencing double digit growth during 2005-06 to 2007-08 and in 2009-10, the growth of the manufacturing sector slowed down considerably during 2012-13 and 2013-14. The reasons for the decline in growth of manufacturing sector in recent years inter-alia are moderation in domestic demand, inflationary pressures, increase in input costs and slowdown in economies of other parts of the world etc.

Employment and unemployment estimates are disseminated in the specific rounds of Survey by the National Sample Survey Office (NSSO). Planning Commission, inter alia using the available NSSO Survey results at that time etc. estimated in the Twelfth Plan document that employment in manufacturing which had increased from 44.05 million in 1999-2000 to 55.77 million in 2004-05, had thereafter declined by 5 million to 50.74 million in 2009-10. 

NSSO provides only sector wise ‘Work participation rates’ (WPR), not sector wise number of people employed. As per 61^st and 68^th rounds on ‘Employment and Unemployment’ by NSSO, the per thousand distributions of usually employed persons in the manufacturing sector is as given in the table below:

Per Thousand distribution of usually employed persons in manufacturing sector.

NSS Round (Survey Period)	Rural Male	Rural Female	Urban Male	Urban Female
61st (2004-05)	79	84	235	282
68th (2011-12)	81	85	224	231

Source: NSSO

In response to persisting high level of Current Account Deficit (CAD) at 4.7% of Gross Domestic Product (GDP) in 2012-13, the Government has taken a number of measures to control CAD and improve the Balance of Payments situation. These include measures for boosting exports, curtailing non-essential imports, measures for reducing gold imports, improving capital inflows and reducing volatility in the foreign exchange market. As noted in Reserve Bank of India’s Fiscal Stability Report June 2014, with modest recovery in key partner economies and policy measures that had been taken, the trade balance improved during 2013-14. Thus, the current account which had been under stress since 2011-12 was brought to a sustainable level during 2013-14 and CAD fell from 4.7 per cent during 2012-13 to 1.7 per cent during 2013-14.

First Airport Operations Control Centre Inaugurated at Chennai

Shri Ashok Lavasa, Secretary, Ministry of Civil Aviation has inaugurated the Airport Operations Control Centre (AOCC) at Chennai Airport. The AOCC has been set up by Airports Authority of India (AAI) bringing together other stakeholders including airlines, ground handlers and security agencies under one platform.  The Centre aims to get optimum utilisation of the airport resources to provide a hassle-free and seamless experience to the passengers.  This involves the implementation of a Common Airport Operations Database (AODB) which provides all the information related to airport operations to all the stakeholders at ten major airports under AAI. Chennai airport has pioneered the AOCC implementation at AAI airports

Performance of Special Purpose Vehicles for Implementation of 39 Projects

The overall performance and achievement of the Special Purpose Vehicles (SPVs) for implementation of 39 projects sanctioned during the Tenth and Eleventh Five Year Plan Periods are quite satisfactory.  Out of 39 projects sanctioned in the 10^th and 11^th Five Year Plan periods under Industrial Infrastructure Upgradation Scheme (IIUS), 21 projects have been completed and the remaining are at various stages of implementation.  Sanction has been withdrawn in respect of two projects as these projects could not start implementation activities in more than two years despite efforts made by this department.

Most of the projects have been delayed on account of land related issues and environment clearance. Some projects have also been delayed on account of shortfall in contributions from Industrial stakeholders and State Governments.

The latest independent evaluation of the Scheme was carried out in December 2011 by National Productivity Council (NPC). The findings of the Evaluation Study of NPC indicate that the Scheme has provided a robust platform for development of common facilities like R&D labs, Skill Upgradation Centre, Common Tool Rooms, Prototyping Centres, Effluent Treatment Plants and basic infrastructure (road, water, supply, power, etc.) which are essential for the clusters. Majority of these clusters belong to Small and Medium Enterprises who have taken up green initiatives and components to curb pollution. 

The project-wise complete list of projects sanctioned and fund generated of 37 projects is at Appendix-I.

The IIUS has been revised as ‘Modified Industrial Infrastructure Upgradation Scheme (MIIUS)’ for taking up new projects in the 12^th Five Year Plan Period and under this scheme only State Implementing Agency (SIA) such as State Industrial Development Corporation, is authorised to implement the project.  Due to modification in the scheme, projects in the 12^th Plan Period cannot be undertaken by SPV or Special Purpose Entity (SPE), however new projects have been undertaken through SIA.