India can learn agri-policy lessons from China Editorial 25th Oct’19 FinancialExpress

Headline : India can learn agri-policy lessons from China Editorial 25th Oct’19 FinancialExpress

Details :

India and China have similar challenges in agriculture:
  • India and China are the most populous countries in the world, having a population size of 1.35 billion and 1.39 billion, respectively, in 2018.
  • With limited arable land [about 120 million hectare (m ha) in China, and 156 m ha in India], both face the challenge of producing enough food, fodder, and fibre for their population.
Followed many similar methods to increase output:
  • Both have adopted similiar methods to get more food from limited land, including:
    • Modern technologies in agriculture, starting with High Yielding Variety (HYV) seeds in the mid-1960s
    • Use of more chemical fertilisers
    • Increased irrigation cover
      • China’s irrigation cover is 41% of cultivated area, and India’s is 48%.
      • As a result of this irrigation, China’s total sown area is 166 m ha compared to India’s gross cropped area of 198 m ha.
But China produces more output than India:
  • Even with much lesser land under cultivation, China produces agricultural output valued at $1,367 billion—more than three times that of India’s $407 billion.
Lessons for India from China in agriculture:
  • There are three important lessons for India, if it is to catch up to the levels achieved in China.
 
I) Increased spending on Agriculture Knowledge and Innovation Systems
  • Agriculture studies have revealed that the highest impact is from investments in agriculture Research and Education (R&E).
  • China spends more:
    • China spends a lot more on agriculture knowledge and innovation system (AKIS), which includes agri R&D, and extension.
    • China invested $7.8 billion on AKIS in 2018-19, amounting to 5.6 times the amount spent by India ($1.4 billion).
    • Presently, India invests just about 0.35% of its agri-Gross Value Added (GVA) whereas China spends 0.8%.
  • India needs to spend more:
    • For increasing total factor productivity, India needs to increase expenditure on agri-R&Dwhile making the Indian Council for Agricultural Research (ICAR) accountable for targeted deliveries.
  • Note: Better seeds that result from higher R&D expenditures generally demand more fertiliser. China’s fertiliser consumption in 2016 was 503 kg/ha of arable area compared to just 166 kg/ha for India, as per World Bank estimates. Consequently, China’s productivity in most crops is 50 to 100% higher than India’s.
II) Better incentive structure to farmers through agri-marketing reforms
  • The incentive structure, as measured by Producer Support Estimates (PSEs), is much better for Chinese farmers than Indian ones.
  • The PSE concept measures the output prices that farmers get in relation to free trade scenario, as well as input subsidies received by them.
    • The PSE concept is adopted by 52 countries that produce more than three-fourths of global agri-output.
  • China’s PSE much higher to India:
    • For Chinese farmers, PSE was 15.3% of gross farm receipts during the triennium average ending (TE) 2018-19.
    • For the same period, Indian farmers had a PSE of -5.7%.
    • In a way, this reflects that Indian farmers had been net taxed, not subsidised, despite high amounts of input subsidies.
  • Due to restrictive trade and marketing practices in India:
    • This negative PSE (support) comes due to restrictive marketing, and trade policies that do not allow Indian farmers to get free trade prices for their outputs.
    • This negative market price support is so strong that it exceeds even the positive input subsidy support the government gives to farmers through low prices of fertilisers, power, irrigation, agri-credit, crop insurance, etc.
  • China’s experience that high MSPs do not work:
    • India can take a leaf out of Chinese bad experience from high MSPs.
    • China, in fact, used to give procurement prices to farmers that were much higher than even international prices.
    • The result was massive accumulation of stocks of wheat, rice, and corn that touched almost 300 million metric tonnes (MMT) in 2016-17 (see graphic).
    • As a result, they had to incur large expenditure for withholding these stocks without much purpose.
    • Having learnt lesson, China dropped the price support scheme for corn, and in fact, have been gradually reducing support prices of wheat, and rice.
  • India should learn from China and move away from high MSPs:
    • Indian government has been trying to jack up minimum support prices (MSPs) for 23 crops.
    • As a result, India’s stock situation in July 2019 was 81 MMT as against a buffer stock norm of 41 MMT.
    • India needs to reduce the gamut of commodities under the MSP system, and keep MSPs below international prices.
    • Else, India will also suffer from the same problems of overflowing granaries as China did.
  • Marketing reforms are necessary in India:
    • To improve this situation, large-scale agri-marketing reforms (APMC and Essential Commodities Act) need to be carried out.
III) Implementation of single direct income support scheme:
Single input subsidy scheme in China:
  • China has combined its major input subsidies in a single scheme that allows direct payment to farmers on a per hectare basis, and has spent $20.7 billion in 2018-19.
  • This gives farmers freedom to produce anything, rather than incentivising them to produce specific crops.
  • Inputs are priced at market prices, encouraging farmers to use resources optimally.
India offers heavy input subsidies apart from direct benefits:
  • India spent only $3 billion under its direct income scheme, PM-KISAN, in 2018-19.
  • On the other hand, it spent $27 billion on heavily subsidising fertilisers, power, irrigation, insurance, and credit.
  • This leads to large inefficiencies in their use, and has also created environmental problems.
India needs to consolidate subsidies into a single scheme:
  • It may be better for India to also consolidate all its input subsidies and give them directly to farmers on a per hectare basis, and free up their prices from all controls.
  • This would go a long way to spur efficiency, and productivity in Indian agriculture.
Conclusion:
  • If India needs to learn these three lessons from China, i.e., to invest more in agri-R&D and innovations, improve incentives for farmers by carrying out agri-marketing reforms, and collapse input subsidies into direct income support on a per hectare basis.
  • Through this, India can benefit its farmers and put agriculture on a high growth trajectory.
Importance:
GS Paper III: Indian Economy
Section : Editorial Analysis

An independent fiscal watchdog for Parliament Editorial 21st Sep’19 TheHindu

Headline : An independent fiscal watchdog for Parliament Editorial 21st Sep’19 TheHindu

Details :

Access to all of good quality analysis on economic, fiscal or financial matters is important for democracy:

  • For an effective democracy, it is important for our electorate and the representatives to have an independent, non-partisan source for these hard facts and evidence.
  • This is particularly important for our Parliament, which controls where and how money flows into our government and our country.
  • But besides the few Ministers privy to expertise from the civil service, most parliamentarians do not benefit from timely access to good quality analysis on economic, fiscal or financial matters.

Need a non-partisan body like Parliamentary Budget Office (PBO) in India:

  • A non-partisan body needs to be appointed with expertise in budgetary, fiscal and economic matters.
  • Regardless of a majority or minority government, this body serves parliamentarians equally and without prejudice.
  • This body exists in many countries around the world, usually called as Parliamentary Budget Offices (PBOs).

 

Work of PBOs:

  • These bodies help shape the debate and discourse around the state of the nation’s finances and the fiscal implications of significant proposals.
  • The work done by PBOs helps drive smarter, more focused debate in the media and with our electorate.
  • Besides costing policies and programmes, PBOs provide significant and sometimes the sole source of information on fiscal and economic projections.
  • Another data point, different from the government’s, generated by an independent, non-partisan office, helps the parliamentarians to ensure that these projections and estimates continue to be reliable enough for them to make decisions on.

Example of how this body will be useful:

  • In the recent time, the Rafale deal controversy in India resulted from uncertainty regarding the true lifecycle costs of the aircraft bought.
  • If parliamentarians could access analysis, information and research about defence costing from a PBO (like they do in Canada), they could hold the government to account in case of any discrepancies.

 

Will there be conflict with the office of CAG?

  • A question that arises is the necessity of such an office when we already have an auditor general (CAG).
  • However, an Auditor General’s role is to provide retrospective audits and analysis of the financial accounts and performance of government operations. These audits are often focused on the day-to-day goings on of government, and often hone in on the performance of the civil service.
  • On the other hand, the PBO provides prospective, forward-looking economic and fiscal projections, as well as policy costings.
  • This distinguishes PBO it from an auditor general, which provides useful information, but only after the fact.

 

Examples of PBO like institutions internationally:

  • Internationally, offices like PBO have been established across the world.
  • The most prominent such office is the Congressional Budget Office in the United Stateswhich provides impartial advice to both the houses of the legislature.
  • Offices in the Netherlands, Korea, Australia and the United Kingdom have also been established for varying lengths of time.
  • PBOs are also making an appearance in emerging economies in Sub-Saharan Africa and Southeast Asia.
  • Wider role in some countries:
    • In some countries, including Australia, the Netherlands, and most recently, Canada, PBOs have also been playing the role of costing electoral platforms during an election campaign.
    • In this period, PBOs provide independent cost estimates of electoral platform measures to political parties.

 

Way forward – India should consider having a PBO:

  • Legislatures across the world have witnessed an increasingly stronger executive try to wrest away its rightful power of the purse.
  • The amount of information parliamentarians need to scrutinise in Budget documents has exponentially increased and a PBO would assist parliamentarians in this process of scrutiny.
  • As the process toward the Union Budget 2020 has already kicked off, it would be relevant for parliamentarians to examine the case for a PBO more deeply.

 

Importance:

GS Paper II: International Relations

Section : Editorial Analysis

A road map to transforming India’s energy Editorial 30th Aug’19 HindustanTimes

Headline : A road map to transforming India’s energy Editorial 30th Aug’19 HindustanTimes

Details :

India progressing:

  • Forty years ago, India barely had a car manufacturer, was way behind in the space race, and had an insignificant IT sector.
  • Today, India is the world’s fourth largest car manufacturer, and is set to become only the fourth country to land on the moon.
  • These achievements should be applauded, but India is just getting started.

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India should play a significant role the energy sector:

  • India today has a golden opportunity to play a prominent role in global energy as well.

Energy and economic development:

  • Energy and economic development have been deeply intertwined.
  • Access to affordable and reliable energy is fundamental to reducing poverty, improving health, increasing productivity, enhancing competitiveness and achieving social justice.
  • In the last 30 years, India’s GDP has increased nearly tenfold, while the energy consumption over that period grew nearly 400% (with around 8% last year).

India to overtake China in energy consumption:

  • By some estimates, global energy demand seems set to increase by a third.
  • By some estimates, India will overtake China as the largest growth market for energy by the mid-2020s.
  • This is significant, given that around 30% of the Indian population does not have access to modern sources of energy.

Concerns over emissions:

  • More energy consumption tends to lead to more emissions.
  • By 2040, India’s share of global emissions seems set to rise from around 7% to 13%, despite the great ambition shown from the government to address climate change.

Dual challenge of increasing energy needs and reducing emissions:

  • More energy to improve lives, but with fewer emissions to help address climate change — is what we call the dual challenge.

India can play a leading role in addressing the dual challenge:

  • India has the entrepreneurialism, ingenuity and a can-do attitude as well as the tools to reset its energy mix with the low-carbon fuel and power, and reimagine energy.

Ways to achieve this:

  • Developing India’s domestic gas production:
    • Good for economy:
      • There exists huge opportunity with natural gas, in which India has a domestic resource potential of more than 100 trillion cubic feet (Tcf), which includes conventional, unconventional, and yet-to-find gas.
      • This resource base has the potential to meet up to 50% of anticipated demand for gas through to 2050.
      • So, developing India’s domestic gas production will help reduce energy imports, enable more investment and create jobs.
    • Good for environment:
      • Natural gas also has a lower carbon intensity per unit of energy than coal in power generation, and offers significant benefits for air quality.
      • Longer term, natural gas can be used to produce hydrogen, and decarbonised using carbon capture, use and storage (CCUS).
  • Ramping up renewables:
    • There is also a big opportunity in renewables, where there are large untapped solar and wind resources.
    • Cost of renewables is becoming increasingly competitive with fossil fuels.
    • As such, these renewable resources could be further maximised to meet the three to four-fold power demand growth expected in India by 2050.
    • They would progressively displace coal in electricity generation, which is important as coal emits about twice as much carbon emissions than gas.
  • Decarbonising mobility:
    • There is a third opportunity with vehicle electrification and the substitution of liquid fuels with CNG or LNG.
    • Costs of light-duty electric car (on a total cost of ownership basis) could converge with conventional vehicles from 2035, and EVs (two and three-wheeler) are close to cost parity today.
    • CNG is already competitive in medium and heavy-duty vehicles and LNG is attractive for long-distance trucking.
  • Driving digital innovation:
    • India also has opportunity in digital innovation, which could help to optimise the energy system and reduce energy demand by as much as 18% by 2050.
    • There are opportunities in the field of transport, through autonomous vehicles, ride-sharing and intelligent traffic management systems.
    • There are opportunities in buildings (through smart homes), in industry (through connected devices and advanced analytics), in transmission and distribution (though smart grid technologies) etc.

Conclusion:

  • With these initiatives, India could position itself as a leader in the energy transition.
  • India could help address the dual challenge of increasing energy needs and reducing emissions:

Importance:

GS Paper III: EconomySection : Editorial Analysis

Economy – MSME Sector :Problems,Demands, Significance, Schemes, Committees

Headline : MSME loans: Delay in disbursal of loans to MSMEs

Details :

In  News:

  • The union finance minister held a meeting with MSME representatives to devise plans for this critical sector.
  • The MSMEs representatives highlighted problems faced by the sector, and made certain demands for the revival of the sector.
  • She also asked industry representatives to send their response to the U K Sinha committee over the next three-four days,indicating that the recommendations would be implemented quickly.

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News Summary

Problems afflicting the MSME sector:

  • Limited loan disbursal by banks even after sanctioning under 59 minutes scheme: As against loans sanctioned in just 59 minutes by PSBs through an online lending marketplace called psbloanin59minutes, only 10 per cent is being disbursed by banks.
  • Long delays in settlement of dues by the government departments and PSUs
  • Access to credit: Despite 70 per cent guarantee from the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE), the firms have not been able to secure loans from banks in many cases.
  • The issue of VAT refunds not being transferred to GST regime by states.

Impact:

  • It has undermined the MSMEs’ ability to sustain their business cycles, liquidity-starved micro, small and medium enterprises (MSMEs).

Key Demands of the MSMEs representatives:

  • Revise the turnover/investment-related definition of MSMEs upwards. The definitions, where a firm with Rs 5 crore investment is classified as ‘small’ while investment over Rs 5 crore are ‘medium’, were brought in 2006 and have since become dated due to inflation.
  • Exemption from capital gains tax for the sector if gains are reinvested in business.
  • Rationalization of penalty for late filing on Ministry of Corporate Affairs as it is same for large and small companies.

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Significance of the MSME sector:

  • MSMEs are the backbone of the Indian economy, contributing nearly 45% in the manufacturing sector, 30 per cent of the GDP and 49 per cent of country’s exports. They are key engines of job creation and economic growth in developing countries.
  • MSME sector is also the second largest employer, next only to agriculture. Over 6 crore MSME units provided employment to about 11 crore people (NSSO, 2016).

 

12 Historic decisions by government for the MSME sector

 

About: PSBLoansIn59Minutes Scheme

  • Under the scheme, MSMEs registered under the Goods and Services Tax are eligible for loan up to Rs 1 crore in just 59 minutes from public sector banks (PSBs) through an online lending marketplace called ‘psbloanin59minutes’.
  • This objective of the scheme is to reduce the time and effort required to secure credit from PSBs, thus easing the life of an entrepreneur.

Need for the Scheme:

  • The difficulties in getting a loan from PSBs stem from unwillingness of the ground-level staff to even accept the loan application.
  • Even after a loan is approved, the high turnaround around time for the disbursal remains a challenge.

Scheme saw huge response:

  • The demand for such a portal is validated by both the large number of applications (around 1.31 lakh) received within two months of its launch.

Issues:

  • As against loan sanctioned in 59 minutes scheme, only 10 per cent loans have disbursed by banks.

Way Forward for the 59 minutes scheme:

  • There is a need of deeper integration of the portal with banks’ processes.
  • The credit approval process should capture the existing liabilities of the borrower so that there are no disputes on quantum of credit to be sanctioned.
  • The availability of other resources such as land/technology with the borrower should also be assessed before sanctioning term loan for a new asset.
  • On the policy front, the norms for takeover of loans among lenders should be relaxed.

 

About: UK Sinha committee

  • RBI constituted the expert committee on MSMEs to study the problems faced by MSMEs, identify the causes, and propose long-term solutions for the economic and financial sustainability of the MSME sector.
  • This includes the review the current institutional framework in place to support the MSME sector, studying the global best practices with respect to MSMEs.

Key recommendations:

  • The creation of a distressed asset fund to assist MSMEs units in clusters.
  • The creation of a government-sponsored Fund of Funds of Rs. 10,000 crore to support venture capital and private equity firms investing in MSMEs.
  • Amendments to the Act to address the sector’s bottlenecks like access to credit and risk capital, prioritizing market facilitation and ease of doing business.
  • SIDBI should deepen credit markets for MSMEs in underserved districts and regions.
  • It suggested to fix a timeline of 7-10 days for disposal of applications..
  • It had suggested for greater adoption of technology-facilitated solutions to many of the problems encountered by the MSME sector.
Section : Economics

Mrunal Handout10: EF3_BoP2_Organizations

Mrunal Handout10: EF3_BoP2_Organizations

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Economy Survey: Jayant Parikshit PPT’s

Economy Prelims 2019 : Jayant Parikshit PPT’s

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Mrunal’s Handouts on Census, Health, Education and Poverty

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The RBI has formed a 10-member task force, headed by M Deosthalee, to suggest a roadmap for building a comprehensive Public Credit Registry (PCR) to improve market efficiency. What is a PCR and how will it impact credit culture in India?

The RBI has formed a 10-member task force, headed by M Deosthalee, to suggest a roadmap for building a comprehensive Public Credit Registry (PCR) to improve market efficiency. What is a PCR and how will it impact credit culture in India?
Approach:
  • Introduce with what a PCR is and its objective
  • Make a note on the current scenario of credit assessment
  • Enumerate the benefits of PCR
  • Conclusion appropriately
Model Answer :
RBI has set up the Deosthalee panel to suggest roadmap for the creation of a Public Credit Registry (PCR) operated by the regulator. The PCR will be an extensive database of credit information for India that is accessible to all stakeholders. The idea is to capture all relevant information on the borrower and entire set of borrowing contracts and outcomes in one large database.
Generally, a PCR is managed by a public authority and reporting of loan details to the PCR by lenders is mandated by law. Private credit bureaus and public credit registry (PCR), generally operated by a central bank or a supervisory authority, work in tandem in most of the countries. However, in India, some private credit information companies provide credit scores and allied reports, and they are regulated by RBI under Credit Information Companies (Regulation) Act, 2005 (CICRA 2005).
Benefits Of PCR
  • A PCR can potentially help banks in credit assessment and pricing of credit.
  • It is required to improve the credit culture in our country. It has been demonstrated in the ‘Doing Business 2017’ report that credit information systems impart transparency in the credit market, following which access to credit improves and delinquencies decrease.
  • A central repository which captures the credit data will help in preventing overpledging of collateral by a borrower.
  • PCR can help in early intervention and effective restructuring of stressed bank credits.
  • It will also benefit start-ups, new entrepreneurs, and small MSMEs who are presently disadvantaged as they lack many of the desired qualifications (that big businesses have) for credit. Transparency of credit information would serve as a “reputational collateral” for such borrowers. This would not only help promote financial inclusion, but also reward the good borrowers thereby imparting credit discipline.
  • The PCR can also help RBI in understanding whether transmission of monetary policy is working, and if not remove the bottlenecks.
Conclusion:
The RBI has made a strong case for setting up a public credit registry in India to address the twin balance sheet problem of the banking sector and the corporate sector. This is a step in right direction by the RBI in tackling the growing menace of bad loans and asset quality of the banks. The database would help enhancing credit market efficiency, boosting financial inclusion, improving ease of doing business and controlling delinquencies.

Subjects : Current Affairs

G20 summit: India presents 9-point agenda on fugitive economic offenders

Headline : G20 summit: India presents 9-point agenda on fugitive economic offenders

Details :

The news

  • Recently, Prime Minister Narendra Modi has suggested a nine-point agenda to tackle the menace of fugitive economic offenders and sought strong and active cooperation across G20 countries to deal with the menace of fugitive economic offenders
  • The agenda was presented by Prime Minister Narendra Modi in the second session of the G20 Summit on international trade, international financial and tax systems.

Nine point agenda suggested by India

  1. Strong and active cooperation across G-20 countries to deal comprehensively and efficiently with the menace fugitive economic offenders
  2. Cooperation in legal processes such as effective freezing of the proceeds of crime, early return of the offenders and efficient repatriation of the proceeds of crime should be enhanced and streamlined.
  3. Joint efforts to be made by G-20 countries to form a mechanism that denies entry and safe havens to fugitive economic offenders.
  4. Principles of United Nations Convention Against Corruption (UNCAC), United Nations Convention Against Transnational Organized Crime (UNTOC), especially related to ‘International Cooperation’ should be fully and effectively implemented.
  5. Financial Action Task Force (FATF) should be called upon to assign priority and focus to establishing international cooperation that leads to timely and comprehensive exchange of information between the competent authorities and financial intelligence units.
  6. FATF should be tasked to formulate a standard definition of fugitive economic offenders.
  7. FATF should also develop a set of commonly agreed and standardized procedures related to identification, extradition and judicial proceedings for dealing with fugitive economic offenders to provide guidance and assistance to G-20 countries, subject to their domestic law.
  8. Setting up of a common platform for sharing experiences and best practices including successful cases of extradition, gaps in existing systems of extradition and legal assistance.
  9. G-20 forum should consider initiating work on locating properties of economic offenders who have a tax debt in the country of their residence for its recovery.

Note

  • The programme for curbing the menace of fugitive economic offenders comes amid heightened efforts by India to apprehend a number of such offenders, including Vijay Mallya, Nirav Modi and Mehul Choksi.
  • In June, 2018 the government had made a pitch at the G20 for a global framework to get high-profile fugitive economic offenders such as Nirav Modi, Mehul Choksi and others to face the law at home.

What is the ‘Financial Action Task Force (FATF)’?

  • The Financial Action Task Force (FATF) is an intergovernmental organization that designs and promotes policies and standards to combat financial crime.
  • Recommendations created by the Financial Action Task Force (FATF) target money laundering, terrorist financing, and other threats to the global financial system.
  • The FATF was created in 1989 at the behest of the G7, and is headquartered In Paris.

About United Nations Convention against Corruption (UNCAC)

  • The United Nations Convention against Corruption is the only legally binding universal anti-corruption instrument.
  • It obliges the States to prevent and criminalize different corrupt practices, promote international cooperation, cooperate for the recovery of stolen assets and enhance technical assistance and information exchange.
  • The Convention addresses both the public and private spheres and provides a set of comprehensive agreed-upon obligations and provisions to criminalize corruption and enhance transparency and accountability.
  • It is the first global legally binding international anti-corruption instrument. And is a multilateral convention negotiated by members of the United Nations.
  • UNCAC covers five main areas: preventive measures, criminalization and law enforcement, international cooperation, asset recovery, and technical assistance and information exchange.
  • It includes both mandatory and non-mandatory provisions.
  • The Convention’s far-reaching approach and the mandatory character of many of its provisions make it a unique tool for developing a comprehensive response to a global problem.
  • The Convention covers many different forms of corruption, such as bribery, trading in influence, abuse of functions, and various acts of corruption in the private sector.

 

About United Nations Convention against Transnational Organized Crime (UNTOC)

  • The UNTOC Convention is the first comprehensive and global legally binding instrument to fight transnational organized crime.
  • States that have ratified UNTOC commit themselves to taking a series of measures to prevent and control transnational organized crime, including
    • the criminalising of the participation in an organized criminal group, of money laundering, related corruption and obstruction of justice and
    • the adoption of frameworks for extradition, mutual legal assistance and international cooperation.
    • UNTOC has 3 protocols:
  1. The Protocol to Prevent, Suppress and Punish Trafficking in Persons, Especially Women and Children
  2. The Protocol against the Smuggling of Migrants by Land, Sea and Air
  3. The Protocol against the Illicit Manufacturing of and Trafficking in Firearms, their Parts and Components and Ammunition

Note: In 2011 the Indian Government ratified both the UNCAC and UNTOC.

Section : Economics

India’s poor export infrastructure remains a major limitation on its export competitiveness. Discuss. Enumerate some of the steps the government of India is taking to improve our export infrastructure.

Approach

• Introduce with the need for export competitiveness

• List shortcomings in export infrastructure

• What steps were taken to improve export infrastructure

• Conclude appropriately

Model Answer :

Over the last 25 years since India’s liberalisation, its foreign trade has expanded multifold. But India’s share in World Merchandise Exports over the last few years remained at around 1.7%. India’s poor export infrastructure remains a major limitation on its export competitiveness.

Shortcomings in export infrastructure:

1.Ports Infrastructure: Indian ports lag behind international standards, have inadequate capacity to handle high-volume trade flow and have high turn-around time. Lack of trans-shipment hubs and high level of manual operations are other concerns.

2.Poor hinterland connectivity: Limited hinterland linkages increase the cost and time of transportation and cargo movement.

3.Airport infrastructure: The cargo volume handled by Indian airports is very less as compared to major international airports. The major bottlenecks are lack of competitive air cargos, congestion at terminals, lack of specialized storage for hazardous and vulnerable cargo, slow cargo clearance etc.

4.IT Infrastructure: This includes lack of facility for electronic payment of fees, duties, taxes etc. at the customs stations.

5.Warehouses and Coldchains: India lacks capacity in warehousing and coldchains which is a big concern, especially for perishable goods.

To improve the export infrastructure GOI is taking following steps:

1.Modernization of Infrastructure: GOI is undertaking modernization of infrastructure, including port modernization, upgradation of Air cargo facility at major airports, Dedicated Freight Corridors, network of national highways and waterways.

2.Sagarmala: The Sagarmala initiative was launched with objectives of port modernization and creating efficient evacuation system and hinterland connectivity.

3.Multimodal Parks: Multi Modal Logistics Parks are being set up at various locations, to act as hubs for freight movement, and enhance connectivity with road and rail and other modes of transport to promote multimodal freight transportation.

4.Logistics Performance Index: The commerce ministry is working on a Logistics Performance Index (LPI) for states and union territories, which will promote competition by ranking them as per their trade related facilities.

5.TIES Scheme: Tje Union Commerce Ministry in 2017 launched a new scheme Trade Infrastructure for Export Scheme (TIES) to provide assistance for setting up and up-gradation of infrastructure projects with overwhelming export linkages.

India needs to increase its share in world exports to boost growth and jobs as well as reduce trade deficit. Renewed focus on export infrastructure is welcome and needs to be sustain to improve India’s export competitiveness and economic growth.