More like a flood than a leak

It is akin to an organised industry. The systematic “pilfering” from the Petroleum Ministry’s office in the heart of New Delhi of documents which were then handed over to “consultants” and interested corporate entities for a price, has revealed a frightening nexus. One account says that a night guard would “steal” the documents while a peon would switch off CCTV cameras to facilitate the alleged acts of corporate espionage, some details of which are now in the public domain. In addition to some low-ranking staff members of the Ministry, two “consultants” and representatives of five top business houses have been arrested by the Delhi Police in the case. Budget inputs, minutes of a Cabinet meeting on disinvestment and detailed documents on the petroleum sector, were among the documents that were allegedly stolen by the ring. The brazen manner in which these were pilfered from Shastri Bhavan in Lutyen’s’ Delhi goes to show that government departments can easily be subverted by vested interests for corporate gains.

This rot might well extend to other ministries and departments. While the facts of the present case will have to be established in a court of law, it is unlikely that company representatives were acting in their personal capacity. If it is proved, the top corporate groups who are alleged to have benefited from the documents that they procured through this organised system of espionage will have much to answer for. It is likely that the Delhi Police crackdown on the ring was triggered by the concern expressed by National Security Adviser Ajit Doval in October 2014 at how “secret” information made its way to the media. Mr. Doval’s letter spoke of the need for firm action to prevent the media from publishing secret documents that impinged on the country’s national security. The NSA pointed out in his letter, which was published in the media, that leaks often emanated from government departments. While a distinction must be made between this kind of pilferage and documents being leaked to the media in the public interest by whistleblowers, corporate espionage must be dealt with in a strong manner. Public interest journalism and corporate theft of government information cannot be weighed on the same scale. In a statement, the Aam Aadmi Party pointed out that the actual beneficiaries were still to be identified by the police. The party hoped that the culprits “who subverted the system to get undue benefits will be booked and interrogated in custody”. The Modi government must be commended for the actions taken by the Delhi Police. But it will be closely watched, on whether or not this investigation is taken to its logical conclusion. For far too long, the big fish have escaped criminal justice

Education for Differently Abled

Education for Differently Abled

The Scheme of Inclusive Education for Disabled at Secondary Stage (IEDSS) is being implemented by Ministry of Human Resource Development, Department of School Eduction & Literacy. This Scheme provides assistance for the inclusive education of the disabled children in classes IX-XII. This scheme is now subsumed under Rashtriya Madhyamik Shiksha Abhiyan (RMSA) from 2013.1)   Inclusive Education for Disabled at Secondary Stage (IEDSS) The Scheme of Inclusive Education for Disabled at Secondary Stage (IEDSS) is being implemented by Ministry of Human Resource Development, Department of School Eduction & Literacy. This Scheme provides assistance for the inclusive education of the disabled children in classes IX-XII. This scheme is now subsumed under Rashtriya Madhyamik Shiksha Abhiyan (RMSA) from 2013. Aims To enable all students with disabilities, to pursue further four years of secondary schooling after completing eight years of elementary schooling in an inclusive and enabling environment. Objectives The scheme covers all children studying at the secondary stage in Government, local body and Government-aided schools, with one or more disabilities as defined under the Persons with Disabilities Act (1995) and the National Trust Act (1999) in the class IX to XII, namely blindness, low vision, leprosy cured, hearing impairment, locomotory disabilities, mental retardation, mental illness, autism, and cerebral palsy and may eventually cover speech impairment, learning disabilities, etc. Girls with the disabilities receive special focus to help them gain access to secondary schools, as also to information and guidance for developing their potential. Setting up of Model inclusive schools in every State is envisaged under the scheme. Components ·         Student-oriented components, such as medical and educational assessment, books and stationery, uniforms, transport allowance, reader allowance, stipend for girls, support services, assistive devices, boarding the lodging facility, therapeutic services, teaching learning materials, etc. ·         Other components include appointment of special education teachers, allowances for general teachers for teaching such children, teacher training, orientation of school administrators, establishment of resource room, providing barrier free environment, etc. Implementing Agency The School Education Department of the State Governments/Union Territory (UT) Administrations are the implementing agencies. They may involve NGOs having experience in the field of education of the disabled in the implementation of the scheme. Financial Assistance Central assistance for all items covered in the scheme is on 100 percent basis. The State governments are only required to make provisions for scholarship of Rs. 600/- per disabled child per annum. (2) Scholarship Scheme being implemented by Department of Empowerment of Persons with Disabilities Pre-Matric Scholarship and Post-Matric Scholarship for Students with Disabilities This scheme has been launched in October, 2014. The objectives of the schemes are to provide financial assistance to the parents of students with disabilities for studying in the pre-matric level (class IX and X) and post-matric level (Class XI, XII onwards). The financial assistance includes scholarship, book grant, escort/reader allowance, etc. Number of scholarships to be granted every year is 46,000 for pre-matric level and 16,650 for post-matric level. 50% of the scholarships are reserved for girls. Parental income ceiling is Rs.2.00 lakh per annum for pre-matric and Rs.2.50 lakh per annum for post-matric scholarship. Selection of the beneficiaries under these two scholarship schemes is on the basis of merit after the recommendation of the Governments of State or Union Territories.  These schemes will be implemented on-line basis through a web-portal National e-Scholarship Portal which will be ready in the year 2015-16. The web portal is being prepared by Deptt. of Electronics & Information Technology. Since there is no web-portal during the current year (2014-15), the scheme is being operated off-line through the respective State Governments. From the next year onwards the scheme will be operated through National e-scholarship portal being developed by DEITY. (3) Deendayal Disabled Rehabilitation Scheme (DDRS) Department of Empowerment of Persons with Disabilities is implementing a Scheme, namely, Deendayal Disabled Rehabilitation Scheme (DDRS) under which   grant-in-aid is provided toNon-Governmental Organizations (NGOs)   for their projects relating to rehabilitation of persons with disabilities aimed at enabling persons with disabilities.  There are 18 model projects under the Scheme including programmes for pre-school and early intervention and special education. Up to 90% of the project cost is provided under the DDRS scheme.

Power that pollutes

In the midst of triumphalism from the government aboutauctions of coal mines, an assessment of the performance of India's coal-based power sector by the Centre for Science and Environment comes as a sobering reality check. The plants studied, which account for around half of the country'sthermal power capacity in 2011-12, have scored an abysmal average of 23 per cent on a scale that rates plants following global best practices at 80 per cent. No Indian plant does so, the best scoring around 50 per cent in terms of their energyand environmental performance. As much as 40 per cent of the plants studied score a very low rating of less than 20 per cent. As the quality of Indian coal is poor, the need is to make up the deficit through better technology and performance. But the opposite is the case. The worst offenders appear to get away with their way of working as it is difficult for a power-starved country to close down a plant for polluting too much or being inefficient.

In the fallout of the coal auctions, many senior officials have insisted India plans to massively raise its coal-based power-generating capacity even as the poor quality of its coal, with low calorific and high ash content, is going to go down further with increasing exploitation of known reserves. Coal demand for power is set to nearly double in the 2012-22 period. Right now, a billion tonnes of fly ash already generated remain unutilised. It is difficult to imagine what will happen when there are plans to generate more, but none to reduce the backlog of what is already there on the ground. The increase in generation will also lead to greater water consumption, which, too, is set to double in the same period.

It is imperative to devise a range of integrated policies that will reduce the pressure created on natural resources and minimise the amount of pollution caused, as it results in considerable health costs. For example, the power regulator that sets tariffs and the environment regulator that sets permissible emission levels must work in concert - so that a power producer that spends more on doing a cleaner job not just gets these costs recognised in the tariffs allowed to it, but is also rewarded. The mandated use of large super-critical capacity must be raised, and coal-based power must be used more and more to meet the base load demand (excluding peak demand). The additional power demand for peak periods must increasingly be met by renewable sources like solar and wind power, or by gas-based units that can be started and shut down quickly and are less polluting than coal-based power plants. Most of the additional thermal power-generating capacity will come up in eastern and central India, which are not as economically secure. As the communities around projects do not typically benefit the most from the economic activity, it is at least necessary to reduce the environmental costs that they bear above all.

Waiting for the PM's word on #GM

Agricultural scientists are being driven to frustration, thanks to the government's lingering indecision on the #geneticallymodified (GM) crops technology. They now intend to apprise Prime Minister Narendra Modi of the scientifically validated facts about the GM technology and its potential benefits to let him take a call on the issue. But the requests to this effect conveyed to him through a series of letters sent by groups of scientists from India and abroad, as well as by the prestigious science academies and the Indian Science Congress, have gone unheeded so far.

The latest communication to the PM is signed by the country's 50 topmost farm scientists, most of whom are recipients of coveted national and international awards. Among them are four former and current director-generals of the Indian Council of Agricultural Research (ICAR), M S Swaminathan, R S Paroda, V L Chopra and S Ayyappan, and winners of the World Food Prize (equivalent to the Nobel Prize in agriculture) -Gurdev Khush, S Rajaram and S K Vasal. There are also some 12 Padma Vibhushan, Padma Bhushan and Padma Shri awardees.

They have argued that the country has already lost considerable time in bringing this useful technology to the farmers' fields and further delay would be detrimental to agriculture. Apart from private biotechnology companies, public sector research bodies, too, have made significant advances in the development of GM products that can improve farm production and productivity. Unless these are field-tested and put to gainful use, the creative work of the scientists would remain confined to laboratories. They have also emphasised that the state governments' prior approval for conducting confined field trials of GM seeds is unwarranted and should be dispensed with. Such permission is needed, under the national seeds Act, only for allowing commercial cultivation of new seeds, not for their field testing.

This letter, dated February 12, 2015, was preceded by a communication on January 5 from the organisers of a symposium on GM crops at the Indian Science Congress held in Mumbai last month. It had endorsed the advantages of the GM technology. Written by Asis Datta, a well-known biotechnologist and former vice-chancellor of Jawaharlal Nehru University, and Paroda, chairman of the Trust for Advancement of Agricultural Sciences, this communication also outlined the other recommendations of the symposium regarding the GM technology.

Prior to that, as many as 750 scientists from different countries had sent a joint message to the PM in August 2014 in which they vouched for the biosafety and utility of GM crops. This initiative was led by C S Prakash, professor of crop biotechnology at the Tuskegee University in the US.

To follow it up, Manju Sharma, head of the Allahabad-based National Academy of Sciences, India, and Ayyappan, chief of the National Academy of Agricultural Sciences, jointly wrote to the PM on this issue. They also sent him a detailed and thoroughly debated status paper on all aspects of the GM technology, brought out by the country's science academies.

The common refrain of these communications is that there is no evidence of any adverse impact of the GM products either on human health or on environment since their inception in the US 35 years ago. They have also pointed out that certain objectives of breeding superior crop strains can be achieved only through GM technology.

Regrettably, the sane and well-founded counsel of the scientific community is being largely disregarded. The government's policies, on the other hand, are being guided - or misguided - by the relatively more vociferous but unsubstantiated propaganda against the GM technology. The scientists are, therefore, hoping that at least the PM, who often talks about putting science, technology and innovation on the top of the national agenda, would one day respond positively to their prudent pleas. Otherwise, the future of the GM technology in India would be in peril.

---

Telling good #subsidies from bad The challenge, never easy for any country, is to identify the good ones while avoiding the addictive bad ones

Time was when changes in taxes, especially those on consumer goods, dominated the general speculation about annual Budgets in India. Over the last decade, that concern has given way to one about the fiscal deficit and the contribution of #subsidies to it. This has come about as much because of the realisation that taxes would affect the consumer prices at the margin, as by the realisation that increasing deficits caused by mounting subsidies could potentially destabilise the entire economy. Notwithstanding the recently changed macroeconomic numbers, this is in effect what happened between 2011 and 2013. The central deficit rose to 5.2 per cent of gross domestic product (GDP) on the back of higher subsidies for petroleum products. Subsidies by themselves rose sharply to over two per cent of GDP. In broad terms, these factors together were largely responsible for the lacklustre performance of the Indian economy.

The new government has moved towards market-determined diesel prices and raised passenger rail fares, long overdue. These steps were thought of as precursors of a larger restructuring of subsidies. Yet it would be premature to expect that the forthcoming Budget will contain bold proposals in this direction, for two reasons. First, subsidies and entitlements are easy to dole out, but infinitely more difficult to reduce and nearly impossible to remove in any society. Second, the recent electoral trauma in Delhi the Bharatiya Janata Party suffered at the hands of an unabashedly populist Aam Aadmi Party despite committing to match the freebies promised by the latter would make the government extremely wary of any steps that would attract the criticism of being anti-poor.

The classic libertarian economic philosophy of Friedrich von Hayek may have gained converts and acclaim in the last four decades, but even the most capitalistic economies of the United States and Germany have deeply entrenched subsidies as major parts of key economic activities. Both the United States and the European Economic Community have elaborate farm support programmes that subsidise farm incomes. These are major bones of contention at all international trade negotiations. In addition, every major economy offers some form of protection to favoured industries and protects its export turf zealously. All Western countries have in place substantial social-welfare programmes to protect the retirees and the not-so well off without seemingly compromising their commitment to free economies. An entirely market-determined price structure for goods and services is to be found only in the fiction of Ayn Rand.

India has had a long history of subsidising virtually everything, dating back to the planned economy days of early independence. Subsidies were provided indiscriminately. For example, irrigation water has almost always been charged nominally for all users. Power tariffs, rail fares, postal charges, public health facilities and education have all been priced well below what they cost. In the early 1960s, the newly established elite Indian Institutes of Technology charged Rs 200 a year for tuition and Rs 100 a year for rooms, ridiculously low even in those days. The benefit went mostly to upper-middle-class families who could pay many multiples of those figures for quality education.

The Economic Survey 2013-14 observes, "Subsidy programmes are particularly problematic when they hamper changes in prices and the consequent shifts in resource allocation which must take place." The Prime Minister's Economic Advisory Council had said in April 2013, "The open-ended nature of petroleum subsidies resulted in an explosive increase in subsidy burden." Considerable evidence exists that continuing high subsidy for urea has caused imbalance in fertiliser application, with possible adverse consequences for yields. Similarly, free irrigation water and negligible charges for electricity for pump sets in most states have resulted in large, avoidable usage of this increasingly scarce resource. The ever present problems of misdirection of subsidies, away from those who need it most, and the enormous possibilities of leakage are too well-known for elaboration.

But not all subsidies are wasteful or uneconomic. Toward the latter part of the last decade, this writer was involved in a programme to combat malaria in Tanzania, the single largest cause of death and morbidity in most of Africa. One recommendation that met with approval of all concerned - the government, the US president's initiative, and international charities such as the Global Foundation and the Bill and Melinda Gates Foundation - was the supply of insecticide-soaked bed nets at highly subsidised prices of under $1 each. The logic that this made the bed nets affordable for even the poorest and resulted in far lower deaths and morbidity, as also improved productivity, was readily evident and accepted. Five years later, it was reported that similar programmes had been started in other African countries as well with most encouraging results.

At home, free or subsidised supply of solar panels and batteries for lighting homes would reduce the need for kerosene for this purpose and reduce the burden on the already overloaded power utilities. Solar-powered fractional horse-power pumps could lift water in areas of high water table, which covers almost the entire Gangetic plain and many parts of coastal India. That would reduce the recurring cost of energy and capital cost of drawing long, low-tension power lines.

On a larger scale, cheap and efficient urban commuter transport made possible by subsidising its capital cost reduces the much larger recurring cost of work-related travel for their users and saves fuel. It also cuts urban congestion and pollution. We may complain about the Delhi air quality and the Mumbai congestion. But they would be infinitely worse without the Delhi Metro or the Mumbai locals.

Operation Flood, among the greatest Indian development successes, followed an imaginative approach. The European Economic Community, as it then was, was planning to gift India $1 billion worth of dairy commodities in the mid-1960s. Their free or subsidised distribution in India would have depressed the local market and killed all incentive. Instead, these commodities were recombined and sold as milk at market prices. The money was then used to set up large dairy-processing plants in districts, 70 per cent as loan and 30 per cent as grant. Farmers received free extension and price benefits of modern processing marketing, but no operating subsidies. That has propelled India to be the leading milk producer in the world.

Subsidies are like cholesterol, bad for the most part, but some good ones can be greatly helpful. They are mostly for one-time expenses, rather than recurring ones. The issue, never easy for any country, is to identify the good ones while avoiding the addictive bad ones.

#14thFinanceCommission (FFC) Report Tabled in Parliament;,samveg ias

14th #FinanceCommission (FFC) Report Tabled in Parliament; FFC Recommends by Majority Decision that the States’ Share in the Net Proceeds of the Union Tax Revenues be Raised to 42% Which is a Huge Jump from the 32% Recommended by the 13th Finance Commission

Article 280 of the Constitution of India requires the Constitution of a Finance Commission every five years, or earlier.  For the period from 1st April, 2015 to 31st March, 2020,  the 14th Finance Commission (FFC) was constituted by the orders of President on 2nd January, 2013 and submitted its report on 15th December, 2014.  The Finance Commission is required to recommend the distribution of the net proceeds of taxes of the Union between the Union and the States (commonly referred to as vertical devolution); and the allocation between the States of the respective shares of such proceeds (commonly known as horizontal devolution).  With regard to vertical distribution, FFC has recommended by majority decision that the the States’ share in the net proceeds of the Union tax revenues be 42%. The recommendation of tax devolution at 42% is a huge jump from the 32% recommended by the 13th Finance Commission.  The transfers to the States will see a quantum jump. This is the largest ever change in the percentage of devolution. In the past, when Finance Commissions have recommended an increase, it has been in the range of 1-2% increase. As compared to the total devolutions in 2014-15 the total devolution of the States in 2015-16 will increase by over 45%.  The consequence of this much greater devolution to the States is that the fiscal space for the Centre will reduce in the same proportion. As recorded in Chapter-8 of FFC’s Report, amongst other demands of the States, the States had demanded both an increase in share of tax devolution, and a reduced role of CSS.  In Paras 8.6 & 8.7 of its Report, the FFC has noted that “8.6:Another dominant view has been that a majority of the resources should flow in the form of tax devolution­­--- ” “8.7: An overwhelming majority of States have suggested reducing the number of CSS as well as outlays on them---.”  FFC has taken the view that tax devolution should be primary route of transfer of resources to States. It may be noted that in reckoning the requirements of the States, the FFC has ignored the Plan and Non-Plan distinction; it sees the enhanced devolution of the divisible pool of taxes as a “compositional shift in transfers from grants to tax devolution” (Para 8.13 of  FFC Report).  Thus, basically the FFC Report expects the CSS, in fact Central assistance to State Plans as a whole, to reduce and be replaced by greater devolution of taxes.  Keeping in mind the spirit of cooperative federalism that has underpinned the creation of  National Institution for Transforming India (NITI), the Government has accepted the recommendation of the FFC to keep the States’ share of Union Tax proceeds (net) at 42%.  In recommending horizontal distribution, the FFC has used broad parameters of population (1971) and changes of population since, income distance, forest cover and area.  The details of this criteria and the weight assigned to them are given in Annexure-1.  The State-wise share of the divisible pool of Central taxes, in percentage terms, is given in Annexure-2.  As service tax is not levied in J&K, the share of the States, in percentage terms has been calculated separately by FFC.  These are given inAnnexure-3.  The Finance Commission is also required to recommend on ‘the measures needed to augment the Consolidated Fund of a State to supplement the resources of the Panchayats and Municipalities in the State on the basis of the recommendations made by the Finance Commission of the State’. FFC  has recommended distribution of grants to States for local bodies using 2011 population data with weight of 90% and area with weight of 10%. The grants to States will be divided into two, a grant to duly constituted Gram Panchayats and a grant to duly constituted Municipal bodies, on the basis of rural and urban population.  FFC has recommended grants in two parts; a basic grant, and a performance grant, for duly constituted Gram Panchayats and municipalities. The ratio of basic to performance grant is 90:10 with respect to Panchayats and 80:20 with respect to Municipalities.  FFC has recommended out a total grant of Rs 2,87,436 crore for five year period from 1.4.2015 to 31.3.2020. Of this the grant recommended to Panchayatas is Rs 2,00,292.20 crores and that to municipalities is Rs 87,143.80 crores. The transfers in the year 2015-16 will be Rs 29,988 crores.  Inter-se share of each state in respect of local bodies grant is at Annexures-4 and 5.  The Government has accepted the recommendations of the Finance Commission with regard to grants to local bodies. The Finance Commission is also required to ‘review the present arrangements as regards financing of Disaster Management with reference to the National Calamity Contingency Fund and the Calamity Relief Fund and the funds envisaged in the Disaster Management Act, 2005 (Act 53 of 2005), and make appropriate recommendations thereon’.  FFC has recommended that up to 10 percent of the funds available under the SDRF can be used by a State for occurrences which State considers to be ‘disasters’ within its local context and which are not in the notified list of disasters of the Ministry of Home Affairs.  The FFC has noted in Para 10.26 as follows:  “The financing of NDRF has so far been almost wholly through the levy of cess on select items, but if the cess are discontinued or when they are subsumed under the Goods and Services Tax (GST) in future, we recommend that the Union Government consider ensuring an assured source of funding for NDRF”.  In view of the above, with regard to disaster relief, the Government has decided that the percentage share of the States will continue to be as before, and that the flows will also be of the same order, as in the existing system; and that, once GST is in place, the recommendation of FFC on disaster relief would be implemented in the manner recommended by the Finance Commission.    The Finance Commission is also required to make recommendation regarding the principles governing grants-in-aid of the States’ revenues, by the Centre. As noted by the FFC in Para 11.28, while calculating grants to the States they “have departed significantly from previous Finance Commissions, by taking into consideration a States’ entire revenue expenditure needs without making a distinction between Plan and Non-Plan”.  Taking thus into account the expenditure requirements of the States, the tax devolution to them, and the revenue mobilization capacity of the States, the FFC have recommended “Post-Devolution Revenue Deficit Grants” of a total of Rs. 1,94,821 crores, for the five year period.  The States of Andhra Pradesh, Assam, J&K, Himachal Pradesh, Kerala, Manipur, Meghalaya, Mizoram, Nagaland, Tripura and West Bengal (a total of 11 States) have been identified for receiving these revenue deficit grants.  The details are given in Annexure-6. The Government has accepted the recommendation in principle.  To summarize, the Grants-in-Aid to the States total to Rs. 5.37 lac crores is given in the Table given below:    Grants-in-Aid to States (Rs. crore) 1 Local Government(all States) 287436 2 Disaster Management(all States) 55097 3 Post-devolution Revenue Deficit     (11 States) 194821 Total 537354  As stated above, the compositional shift recommended by the FFC would substantially impact Central Assistance. In this regard, para 7.43 of the FFC Report states as follows : “Plan revenue expenditure of States is financed by States’ own resources, borrowing and Plan grants from the Union. The Plan grants include normal Central assistance, which is untied,additional Central assistance for specific-purpose schemes and transfers,special Plan assistance,special Central assistance,Central Plan schemes and CSS.For the purpose of our assessment of Plan revenue expenditure of States, we have included expenditure incurred on State Plans and States’ contribution to CSS. This excludes Union expenditure on CSS, central Plan schemes and North Eastern Council Plan schemes and externally aided projects financed through grants from the Union.  We have estimated the 2014-15 base year Plan revenue expenditure (as defined above) for each State, applying an annual growth rate of 13.5 per cent over 2012-13 and 2013-14.  For the purpose of our projection period, we have assumed an annual growth rate of 13.5 per cent over base year estimates for all the States, implying that the Plan revenue expenditure will increase at the same rate as the GDP growth rate.”  Based on the above, over 30 Centrally Sponsored Schemes have been identified which ought to have been transferred to the States because expenditure on them has already been taken into account as State expenditure, in arriving at the greater devolution of 42% to the States.    However, keeping in mind that many of these schemes are national priorities, and some are legal obligations (such as MGNREGA) and in order to underline the Central Government’s continued support to national priorities, especially with regard to schemes meant for the poor, most of these are proposed to be continued.  The Government has decided that only 8 Centrally Sponsored Schemes be delinked from support from the Centre.           Certain programmes of the Government will have to continue unaltered as they are either legal/Constitutional obligations, or are privileges available to the elected representatives for welfare of their constituents. Further, and more importantly it is proposed that the Union Government may continue to support   certain programmes which are for the benefit of the socially disadvantaged in an unaltered manner from its own resources.  In respect of various Centrally sponsored schemes, the sharing pattern will have to undergo a change with States sharing a higher fiscal responsibility for scheme implementation.  Details of changes in sharing pattern will have to be worked out by the administrative Ministry/Department on the basis of available resources from Union Finances. Other recommendations of the FFC         In addition to the recommendations regarding Vertical, and Horizontal devolution and grants, the FFC has made certain other recommendations. These relate to cooperative federalism, Goods & Services Tax, Fiscal Consolidation Roadmap, Pricing of Public Utilities and Public Sector Enterprises. The recommendations of the Finance Commission will be examined by the Government in due course in consultation with the concerned stakeholders.

Minimum Support Price

Major recommendations contained in the Report of National Commission for Farmers (NCF) are: i) Asset Reforms covering land, water, livestock, fisheries and bio-resources. (ii) Farmer-friendly Support Services including setting up of Bio-Technology Regulatory Authority and National Agricultural Bio-security System, thrust on extension services including agro-metrology, training and knowledge connectivity, credit and insurance, and remunerative marketing opportunities, inputs and services. iii) Curriculum reforms in the Agriculture Universities in order to promote entrepreneurship amongst the students. iv) Approach towards Special Categories of Farming, increase in farmers’ income through cooperative farming, contract farming, promoting small holders’ estates in order to improve viability of small and marginal farmers and entrusting the Panchayat Raj Institutions with responsibility for agriculture. v) National Loan Use Advisory Service to provide timely advice to farmers about optimum use of land, taking into account the climatic and market conditions. vi) Setting up of market Price Stabilization Fund and Agriculture Risk Fund and coverage of farmers under a comprehensive National Society Security Scheme. vii) Creation of a National Food Security and Sovereignty Board and a well defined Food Security Policy. viii) Rural non-farm livelihood initiatives to create non-farm employment opportunities in rural areas. ix) MSP should be at least 50% more than the weighted average cost of production. Based on the draft prepared by the NCF and after consultations with State Governments and the Central Ministries concerned, Government of India approved the National Policy for Farmers (NPF), 2007. Government monitors the status of implementation of the plan of action prepared for operalisation of NPF 2007. Action on major recommendations has been completed. NCF’s recommendation that the Minimum Support Price (MSP) should be at least 50% more than the weighted average cost of production was not accepted by the Government as MSP is recommended by Commission of Agricultural Costs and Prices (CACP) on objective criteria, considering a variety of relevant factors and prescribing an increase of at least 50% of cost may distort the market.