Editorials/Opinions Analysis For UPSC 31 December 2022
- Slowing Exports: India’s Concern
- Putting a Stop to Stubble Burning
Slowing Exports: India’s Concern
- Recently, India’s goods exports recovered from a nearly 17% decline in October to a 0.6% increase in November.
- While exports increased to $32 billion in October from $29.8 billion in October, they remain significantly lower than the $39 billion averaged between April 2022 and September 2022.
GS Paper-3: Effects of Liberalization on the Economy; Balance of Payment and Trade balance of India.
What are India’s main concerns in terms of foreign trade? Also, propose solutions to these issues. (150 Words)
- Import growth slowed to 5.4%, with shipments falling to $55.9 billion, a level last seen in February 2022, which was followed by seven months of import bills totaling around $60 billion.
- The merchandise trade deficit fell below $25 billion for the first time in five months, according to a recent CARE Ratings research paper, and despite growing 11.1% in the first eight months of 2022-23, goods exports could still fall 2.3% for the full year.
- While the World Trade Organization predicts a 1% increase in global goods trade in 2023, CARE predicts a 1.5% increase in India’s exports in 2023-24.
What are India’s Top Foreign Trade Concerns?
- Non-oil Export Performance o While lower non-oil cargo caused a portion of the import bill drop, indicating slowing domestic demand, non-oil export performance is a bigger concern.
- Their share of export growth has been declining since June, with the contraction accelerating for many sectors from September to November-engineering goods, which drove much of India’s record $422 billion in goods exports in 2021-22, fell 11.3%, while textiles fell 25%.
- Key Markets on the Verge of a Recession
- December’s pending festive orders may still boost export numbers month on month, but the arrival of 2023 would put greater strain on India’s trade story, with key markets entering a slump.
- Fall in Engineering Goods Exports o Engineering goods, which have made up a larger portion of India’s goods exports in recent years, fell 21%.
- This slowdown is attributed to high inflation in developed regions, falling demand in China, the EU and US slowing, and the Russia-Ukraine war.
- The Commerce Ministry explained that the removal of the export duty that was previously levied on steel and allied products resulted in a $2 billion decrease in exports in October.
- The Ministry also stated that every year during the month of Diwali, workers tend to take leave, reducing output.
- Not a Healthy Import Cover o Import Cover measures the number of months of imports that can be covered by foreign exchange reserves held by the country’s central bank.
- For the week ending December 2, foreign exchange reserves were estimated to be around $561 billion.
- If we use October imports of $56.7 billion (an eight-month low) as a baseline, we have roughly 9-10 months of import cover, which isn’t as good as the 14-to-15-month cover seen during the pandemic.
What about other countries that export?
- Vietnam, an export-dominated country, recorded a 4.5% growth in exports from a year earlier to $29.18 billion amid ‘sustained foreign demand’.
- Similarly, the Philippines’ exports increased by 20% in October.
- The government there reported that exports increased for the first time in three months in September, citing “signs of reviving foreign demand.”
- This year, China is an outlier due to strict lockdowns that are affecting manufacturing output.
Is domestic demand sufficient?
- The monthly Finance Ministry review for October acknowledges a slowing export scenario but emphasises the importance of domestic demand.
- The report states that the global slowdown is driven by a ‘confluence of stubbornly high inflation, rising borrowing costs and geopolitical tensions’, but cites local demand as being ‘resilient’.
- Lowering commodity prices may help reduce the import bill and deficit to some extent, but this may cut both ways because the value of some exports that grew earlier due to global price trends will also decline.
- While services exports and remittance inflows may cushion India’s current account deficit from the goods trade imbalance and limit the economy’s external vulnerabilities, policymakers must focus on ensuring a soft landing for factories in export-intensive sectors that are also massive employers so that global gloom does not harm domestic sentiment.
Keeping an eye on market realities in order to respond quickly to emerging challenges is critical for Indian exporters to survive the coming turmoil and, perhaps, even expand their share of the global trade.
Putting a Stop to Stubble Burning
Farmers in north India, especially, are seen as a major source of air pollution in Delhi because they burn stubble. Every year, the amount of pollution in the air gets worse, and the index of air quality reaches a “severe” and “hazardous” level.
GS Paper-3: Conservation, environmental pollution and degradation, environmental impact assessment
The solution to the problem of stubble burning is to investigate sustainable farm practises, with the government playing an active role in regulating and framing policies. Elucidate (250 words)
What is Burning Stubble?
- Stubble burning is a way to get rid of agricultural waste from the field by setting fire to the straw stubble (parali) that is left on the land after harvesting grains like paddy, wheat, etc. to get it ready for the next round of seeding.
- Every year, the most stubble burning happens at the beginning of winter, between October and November. This is when paddy crops are harvested, and the residue left behind needs to be cleaned up so that wheat can be planted.
- In India, a lot of crop residues come from crops like rice and wheat. Most of the time, sugarcane leaves are burned on fields instead of wheat or rice.
Reasons for Stubble Burning
- The rotational cropping system for rice and wheat is the main cause of crop burning, as farmers have to quickly clear the fields for the next crop.
- When paddy is harvested by a combined harvester and thresher, especially by large farmers in Punjab, the machine leaves a long length of straw and stubble on the field, which stops other machines from sowing.
Consequences Of Burning Stubble
- The biggest problems with burning crop waste are pollution and the release of greenhouse gases that cause global warming.
- These have a direct effect on pollution and are also to blame for the haze in Delhi and the melting of glaciers in the Himalayas.
- Burning crop waste is also bad for the soil, which makes it harder to grow crops.
- When paddy straw is burned, it gives off heat that kills fungi and bacteria, which is important for the health of the soil.
- The burning of stubble releases pollutants into the air, which form a thick layer of smog that is bad for people’s health and the air quality.
- Not only does the smoke irritate the eyes, but it also makes it hard to breathe and causes lung diseases.
Controlling Stubble Burning
- New farm technologies: Agricultural machines like the Happy seeder, Rotavator, Baler, Paddy straw chopper, etc., are a recent innovation that could help farmers deal with crop residues more effectively, but they are too expensive for most farmers to buy. Because of this, the government should give farmers enough subsidies to make this equipment affordable.
- New and improved seed varieties: Using new and improved varieties of rice and wheat crops, especially short duration crop varieties like Pusa Basmati-1509 and PR-126, could be seen as a way to solve the problem of stubble burning because they grow quickly and improve the quality of the soil.
- The Pusa-bio-decomposer was made by scientists at the Indian Agricultural Research Institute. It speeds up the decomposition process and turns crop residue into manure in 15–20 days.
- Biogas plants: They can stop crops from being burned and keep pollution from happening. The government set up these plants as part of its “waste to energy mission.” They use crop waste like rice straw and bio-methanation technology to make bio-gas.
- Sustainable farm management practises: Agronomists and scientists have also suggested composting, making biochar, and in-situ management with mechanical intensification as other ways to help farms be more sustainable. These steps could not only be used to deal with crop waste, but they could also help control GHG emissions.
- Educating and giving power to the people who have a stake: Educating and giving power to the farming community could be a big step toward making a big difference. Farmers think that their only job is to grow food grains and that it is not their job to clean up after them. This way of thinking needs to change, and farmers should feel responsible for crop residues. This can be done through campaigns to raise awareness.
Do you know?
- Punjab has recently agreed to send paddy straw to Kerala so that it can be used as feed for animals. This is because the dairy industry in Kerala is in desperate need of green feed and hay.
- The dairy industry in Kerala is a way for lakhs of farmers to make a living. Only Punjab produces more milk than Kerala. But there is a severe lack of good feed for cattle and prices are pretty high, which are big problems for farmers.
- The Centre’s Kisan Rail scheme will be used to ship paddy straw to Kerala from the two states.
- People think that the initiative will be good for both States. Kerala will get the feed it needs, and Punjab will get rid of its extra paddy straw, which is burned and makes the air dirty.
Kisan Rail scheme
- In 2020, the Ministry of Railways started the Kisan Rail Scheme. As part of this, the government started using Kisan Rail trains to move perishable goods faster from where they are grown to where they are eaten.
- The faster speeds made sure that the goods got to the markets on time, which cut down on waste and gave farmers access to new and larger markets to sell their goods.
Ways to Move Forward
- The best way to stop burning stubble is to look into sustainable farming practises and get the government involved in regulating and making rules.
- In recent years, the government has made a framework and action plan for stopping and preventing stubble burning. However, putting these plans into action and making sure they are followed is a big challenge.
The government should act as a facilitator by spreading information about the pros and cons of each option. This will help clear up any confusion and make it easier for small and marginal farmers to use new and innovative technologies by removing socio-economic barriers.