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Yojana Summary March 2022


Chapter 1.   Boosting Infrastructure


Context

By investing in infrastructure development, the Union Budget 2022-23 aims to establish a virtuous cycle of growth and development.

The goal is to improve ‘comfort of living’ through infrastructural development and economic opportunities.

Growth in the economy would also increase the amount of money available for socioeconomic development.

Efforts in India to Improve Infrastructure

  • Roads, railways, airways, ports, and energy infrastructure are examples of physical infrastructure. In order to achieve its goal of making India a $5 trillion economy by 2024, the government has already raised allocations to the aforementioned industries.
  • Physical infrastructure is necessary for enterprises to reach their full potential while also increasing people’s quality of life.
  • The National Infrastructure Pipeline (NIP) is a government programme to improve the country’s infrastructure.
  • From FY 2019 to 2025, the initiative will invest almost Rs 111 lakh crore to build infrastructure and create a higher standard of living for inhabitants.

PM GatiShakti Program:

  • It is a National Master Plan for improving India’s infrastructure.
  • The Organize brings together 16 ministries, including Roadways and Railways, to coordinate and plan integrated connectivity projects across the country.

Projects to Increase Connection:

  • The government has been emphasising on the construction of national highways and roads around the country to improve connectivity between different regions and encourage balanced regional growth.
  • According to media reports, the speed of highway building has been steadily increasing, with construction of 13,327 km in 2020-21 compared to 10,237 km in 2019-20.

  • Bharatmala Pariyojana (Bharatmala Pariyojana) is a government of India umbrella programme aimed at bridging significant infrastructure gaps in the country. To decongest the major section of the cities, it proposes the building of elevated road and freight corridors, as well as ring roads and bypasses.

  • Green Highway Policy is a Ministry of Road Transport and Highways initiative. It encourages the creation of green corridors along national highways in order to achieve long-term road infrastructure development in the country.
  • According to the policy, 1% of the overall project cost of highway improvements would be set aside for the planting and upkeep of plants along the highways.

Digital Infrastructure:

  • As part of the Digital India Mission, the government has spent substantially in digital infrastructure to improve internet access in remote areas while also assuring quicker connectivity in previously connected urban areas.
  • Lockdowns imposed by COVID have expedited the expansion of internet connectivity across the country.

BharatNet:

  • It aims to improve digital connectivity in rural regions by connecting 2.5 million Gram Panchayats across the country with broadband.
  • The National Optic Fibre Network Project (NOFN) is being implemented with the goal of providing e-governance services to remote areas.

Financial Infrastructure:

  • One of the most important and early actions of the current administration in the country has been to improve financial inclusion.
  • The government has taken initiatives to improve access to formal financial institutions through the PM Jan Dhan Yojana (see inset), as well as provide social support through the PM Suraksha Bima Yojana, PM Jeevan Jyoti Bima Yojana, and the Atal Pension Scheme .

United Payment Interface (UPI):

  • As part of its goal to reduce the use of cash in India, the government has created UPI through the National Payment Corporation of India (NPCI).
  • It unites the whole financial system, including banks, wallets, and other financial systems, into a single financial system that simplifies payment processing.

Infrastructure Development Benefits:

The Multiplier Effect on Economic Growth:

  • Infrastructure investment leads to a rise in industrial productivity.
  • As previously stated, this leads to increased economic growth and increases the availability of funds in the economy.
  • It also leads to an improvement in the infrastructure’s quality, generating a virtuous loop.

Job Creation:

  • Infrastructure construction necessitates a steady supply of labour as well as construction materials such as cement and iron.
  • As a result, it contributes to the creation of jobs in the economy.
  • Simultaneously, even after the infrastructure has been built, the economy produces more, necessitating a greater supply of both skilled and unskilled labour.

Increased Investment:

  • Similarly, when the economy grows, wages and salaries rise, resulting in an increase in disposable income.
  • This stimulates the increase of industrial capacity by creating a demand for goods and services. As a result, business investment in the economy increases.

Reduced Logistics Costs:

  • India has slipped from 35th to 44th place in the Logistics Performance Index, from 35th in 2016 to 44th in 2018.
  • This means that items are not efficiently handled at the border, resulting in delays and a lack of transparency in the movement of goods.
  • At the same time, logistics costs account for 14 percent of GDP, compared to nearly 8-10 percent in other emerging countries.

Effect of Infrastructure Improvements:

  • To boost logistics efficiency, the country must invest in border customs infrastructure, as well as improve tracking services and reduce cargo turnaround times.
  • This is necessary to keep Indian exports competitive in international markets.

Improvement in Industry Competitiveness:

  • As previously stated, infrastructure investment leads to an increase in demand for domestic goods and services on the international market.
  • This results in the acquisition of valuable foreign currency and the strengthening of the native currency.
  • The forex earned can also be used to pay for international products and services purchased on the international market by Indians.

World Competitiveness Index:

  • India is now placed 43rd out of 63 countries on the Institute for Management Development’s World Competitiveness Index (IMD).
  • Traditional shortcomings such as poor infrastructure, as well as insufficient education expenditure, have been blamed for India’s low position.

Increased tax revenues:

  • As previously said, quicker growth leads to increased production in the economy. This, in turn, leads to an increase in government revenue generation.
  • As previously indicated, this revenue stream can be used to improve infrastructure, generating a virtuous cycle of growth.
  • Better infrastructure leads to better and quicker connectivity, in addition to the use of energy as a facilitator for more efficient work and personal life.
  • As a result, better infrastructure opens doors to a higher standard of living.

Conclusion

  • In the coming century, India is set to make a huge leap in economic growth.
  • However, in order for the economy to reach its full potential, constraints such as a lack of infrastructure must be addressed.
  • This will address the country’s employment challenges as well as the demand-supply imbalance.
  • Simultaneously, it is critical to develop digital and financial infrastructure in order to seize the opportunities that are emerging in the technology-based sunrise sectors.
  • This will allow India to join the global growth engine, hastening socioeconomic development.

UPSC Previous Year Questions

  • Explain how private public partnership agreements, in longer gestation infrastructure projects, can transfer unsuitable liabilities to the future. What arrangements need to be put in place to ensure that successive generations’ capacities are not compromised? (GS3 – 2014)
  • Adaptation of PPP model for infrastructure development of the country has not been free from criticism. Critically discuss the pros and cons of the model. (GS3 – 2013)

Practice Questions for the Mains:

  • Discuss the Indian government’s many programmes aimed at addressing the country’s critical infrastructure shortages. Also, list the economic benefits that have resulted from the country’s improved infrastructure.


Chapter 2.   Harnessing Multiplier Effect


Context:

The Finance Minister recently emphasised the importance of increasing capital investment by both the public and private sectors in order to boost economic growth and demand in the country.

Capital spending has a multiplier effect of 2.45 in the short term and 4.8 in the long term, according to several research.

This indicates that a single rupee spent on capital investment has the potential to boost the whole economy by Rs 2.45 in the short term and Rs 4.8 in the long term.

Capital Expenditure:

  • The budget for 2022-23 proposes an increase in capital spending of 24.47 percent, amounting to about Rs 7.5 lakh crore.
  • If capital expenditure includes grants in aid for the creation of capital assets (including MGNREGA assets), the effective capital expenditure rises to Rs 10.68 lakh crore.
  • This is a 27 percent increase over the Rs 8.4 lakh crore capital expenditure in 2021-22.

Budget Provisions That Are Similar:

  • The Union government has loosened numerous expenditure provisions as a result of the Corona-induced economic downturn.
  • The borrowing limit for states, for example, has been increased to 4% of their Gross State Domestic Product (GSDP).
  • The government has set aside Rs 2 lakh crore for capital expenditure by states and autonomous entities.

Increased Capital Expenditure is Required:

COVID-induced Lockdown:

  • As previously stated, COVID-induced lockdown has resulted in the long-term shutdown of industries.
  • As a result, direct investment and signals by the government through favourable policy actions in the economy are required to attract private investment
  • COVID has resulted in a drop in tax revenue realisation due to a decrease in demand as well as the temporary closure of industries.
  • This may be offset by persistent government investment, which will provide the required boost to the economy’s animal spirits.

Benefits of Capital Expenditure:

  • Capital Expenditure has a variety of benefits on a country’s economy, including boosting capacity and supply, raising employment and salaries, driving demand for goods and services, and attracting foreign direct investment.
  • Government spending, on the other hand, provides a crowding-in effect for private investment.

Funding Allocations:

  • The additional allocations will be used to fund the PM Gati Shakti Plan and its accompanying programmes.
  • The monies can also be utilised to complement funding for projects like the Prime Minister’s Gram Sadak Yojana.

  • The monies can also be utilised to complement funding for projects like the Prime Minister’s Gram Sadak Yojana.

Reform-Oriented Scheme:

  • Funds from the ‘Scheme for Special Assistance to States for Capital Expenditure’ (see inset) will be used to encourage governments to implement reforms that will boost development in their respective countries.
  • Digitization of the economy, including digital payments, and reform in areas such as town planning, transit-oriented development, building ordinances, and transferable development rights are among the connected sectors.

Conclusion

  • Because of the brief lockdowns and drop in demand, the pandemic has cost the Indian economy a lot of money.
  • We are, however, seeing a V-shaped comeback (as mentioned in the Economic Survey).
  • For the economy to recover and reach its full potential, the government must continue to provide support.

UPSC Previous Year Questions:

  • Q. Public expenditure management is a challenge to the government of India in the context of budget-making during the post-liberalization period. Clarify it. (GS3 – 2019)
  • Q. What is the meaning of the term tax-expenditure? Taking the housing sector as an example, discuss how it influences the budgetary policies of the government. (GS3 – 2013)
  • Q. Explain the meaning of investment in an economy in terms of capital formation. Discuss the factors to be considered while designing a concession agreement between a public entity and a private entity. (GS3 – 2020)

Practice Questions for the Mains:

  • Q. In terms of the Indian economy, what do you mean by the multiplier effect? Discuss the impact of the government’s increased capital spending.


Chapter 3.   Focus Areas of Union Budget 2022-23


Digital Currency and Banking

  • Demonetization, as well as COVID-induced Lockdown and social distance norms, have all contributed to a rise in digital financial transactions across the country.
  • This is reflected in the RBI’s Digital Payments Index (RBI-DPI), which has risen from 173.49 in September 2019 to 304.06 in September 2021.

DPI (Digital Payments Index):

  • It is a Reserve Bank of India index that measures the extent to which payments in India have been digitised.
  • Payment Enablers, Payment Infrastructure – Demand Side Factors, Payment Infrastructure – Supply Side Factors, Payment Performance, and Consumer Centricity are the five major factors.

Support for Electronic Payments:

  • The Special Incentive Scheme for Boosting Digital Transactions is continued in the Union Budget 2022-23.
  • It incentivizes select banks to encourage transactions up to Rs 2000 over BHIM UPI.
  • For transactions done via RuPay Debit cards and UPI, such banks are given a share.

Digital Banking Units:

  • Through Scheduled Commercial Banks, Digital Banking Units have been established in 75 districts to expedite financial inclusion in rural areas (SCBs).
  • DBUs will make it easier to conduct all financial transactions online.
  • It is intended to reduce banking paperwork, such as the use of checks, demand draughts, and pay-in slips.

  • The government has been able to take advantage of the vast network of post offices in rural areas by providing full-fledged banking services through them.
  • According to government statistics, the country has 1.56 million post offices, with 1.41 million in rural areas.
  • As a result, delivering services through post offices can significantly increase financial inclusion in rural areas.

Modest Savings:

  • Post office banks also have the benefit of offering small savings plans such as the National Savings Certificate (NSC), Kisan Vikas Patra (KVP), Monthly Income Scheme (MIS), Sukanya Samriddhi Yojana (SSY), and so on.
  • It is necessary to move these services online, freeing up resources for banking activities.

Central Bank Digital Currency:

  • The government has proposed using Blockchain technology (see inset) to issue its own Central Bank Digital Currency, similar to Bitcoin and other cryptocurrencies (CBDC).
  • CBDC is expected to be issued in two forms: CBDC-W for wholesale transactions and CBDC-R for retail transactions, according to early sources.

Taxation of Virtual Digital Assets:

  • Cryptocurrencies have been dubbed “Virtual Digital Assets” in the budget (VDAs).
  • The government has recommended that all VDAs’ income be taxed at a rate of 30%. In addition, all VDA transactions will be taxed at 1% with Tax Deduction at Source (TDS).
  • Despite these ideas, VDAs have yet to be granted legal tender status in the country.

VDA Regulation:

  • It is necessary to protect unsuspecting investors from questionable schemes that promise faster and bigger profits.
  • Despite their popularity, there is a risk associated with cryptocurrencies because of their unknown origins and lack of centralised supervision.
  • In India, discussions about cryptocurrency regulation are now occurring.


Chapter 4: Modern and Profitable Agriculture


Agriculture’s Importance:

  • India’s agriculture sector is the country’s largest employer. In 2021-22, it generated around 18.8% of India’s Gross Value Added (GVA).
  • The sector’s growth rate has accelerated, rising from 3.6 percent in 2020-21 to 3.9 percent in 2021-22.
  • The Union Budget 2022-23 increased the funding to the Ministry of Agriculture and Farmers Welfare by 4.5 percent to Rs 1.32 lakh crore, recognising its importance in India’s economy.

COVID’s Impact:

  • Agriculture was the only industry that did not experience a drop as a result of the COVID-induced shutdown.
  • In reality, the agricultural sector has been in the vanguard of the economy’s recovery following the pandemic.
  • MSPs are currently in place for 22 crops, comprising 14 kharif crops, 6 rabi crops, and two commercial crops. The MSP-purchased food grains are used to provide monthly rations to over 80 million recipients under the National Food Security Act.
  • According to the Union Budget 2022-23, the government will pay paddy and wheat farmers Rs 2.37 lakh crore in direct payments in lieu of MSP.

Agricultural Credit:

  • The government has increased the objective for agricultural credit to Rs 18 lakh crore for 2022-23, up from Rs 16.5 lakh crore last year, in order to make agriculture more technology-intensive and efficient. In addition, 2.7 crore Kisan Credit Cards (KCC) have already been provided to farmers, with 14 lakh new KCCs approved for animal husbandry and dairy producers.
  • Drones or Unmanned Aerial Vehicles (UAVs) are used for crop assessment, soil analysis, digitalization of land records, and other tasks. Drones or Unmanned Aerial Vehicles (UAVs) are used for crop assessment, soil analysis, digitization of land records, and other tasks.
  • It has already been proven that the knowledge obtained through such studies assists farmers in making educated decisions about the suitability of crops for a given field.

Financial Support:

  • It has been discovered that technology interventions are envisioned but not implemented due to a lack of funds.
  • As a result, the government has approved a 100% subsidy for drone purchases by the Indian Council of Agricultural Research (ICAR), Krishi Vigyan Kendras (KVKs), and State Agricultural Universities up to Rs 10 lakh.

Capacity Building:

  • The government has also begun the process of revising the curriculum at state agricultural colleges in order to keep students pursuing advanced degrees up to date on the most recent developments in the sector.
  • The Agriculture Skill Council of India is assisting in the development of skills in agriculture and associated fields.

River Interlinking Project:

  • The Ken-Betwa Link Project has been given a budget of Rs 44,600 crore by the government.
  • The project has a number of advantages, including an increase in net irrigated land in the drought-prone Bundelkhand region, the provision of drinking water, and the generation of hydro and solar energy.

Projects in the Works:

  • Furthermore, the Damanganga-Pinjal, Par-Tapi-Narmada, Godavari-Krishna, Krishna-Pennar, and Pennar-Cauvery Detailed Project Reports have been approved and will be executed after consultation with the beneficiary states.

Rural Women’s Initiatives

  • National Rural Livelihoods Mission (DAY-NRLM): Deendayal Antyodaya Yojana: It is a government-sponsored programme that began in 2011 with the goal of providing livelihood options to rural disadvantaged families.
  • The programme brings together 10-15 low-income families to form Self Help Groups (SHGs). To launch their own businesses, these SHGs are offered collective loans as well as technical and marketing assistance.
  • By organising over 74 lakh SHGs, the initiative has mobilised 8.09 million rural women. By 2023-24, it seeks to reach 9-10 million rural poor households.

Building Institutions:

  • The scheme provides training to SHG members and organises them into several levels to provide coordination and proper assistance. SHGs in a hamlet, for example, are grouped into Village Organizations (VOs).
  • Cluster Level Forums are formed from a collection of 10-15 VOs (CLFs). The mission currently has around 4.28 lakh VOs and 32,899 CLFs operational.
  • Through the Bank-SHG Linkage, SHGs are given with collateral-free credit. This money comes from the Revolving Fund (RF) and the Community Investment Fund (CIF) (CIF).
  • Until December 2021, SHGs will have leveraged about Rs 4.6 lakh crore in bank credit. They are also eligible for a 3% interest rate reduction if they repay the credit on schedule.

Increased Credit Limit:

  • To their credit, SHG’s NPA percentage is only 2.34 percent. The government of India has increased the allowed credit per SHG from Rs 10 lakhs to Rs 20 lakhs in recognition of their outstanding performance.

Financial Literacy:

  • The mission also provides financial literacy training to members of SHGs to ensure the use of cutting-edge technologies and the promotion of financial inclusion.
  • MKSP (Mahila Kisan Sashakitkaran Pariyojana) is a sub-component of DAY-NRLM that was created to increase women farmers’ participation in both farm and non-farm activities. The programme aims to boost farm productivity, provide managerial training, provide food and nutrition security, and promote agricultural sustainability.

SVEP (Start-up Village Entrepreneurship Program):

  • SVEP is a sub-component of DAY-NRLM that promotes entrepreneurial culture at the village level.
  • It establishes an ecosystem at the village level to provide small businesses in rural areas with business support services such as mentoring, seed funding, capacity building, mentorship, training, and marketing assistance.

  • Aajeevika Grameen Express Yojana (AGEY) is a sub-scheme that aims to give people in rural regions with safe and economical transportation.
  • The SHGs are in charge of providing transportation services. They serve a dual purpose: they provide SHG members with livelihood options while also improving connectivity to isolated village regions.
  • 68,000 women have been identified to work as Business Correspondent Sakhis (BC Sakhis) in order to promote women empowerment and financial literacy among rural impoverished women.
  • They will be trained as BC Sakhis and deployed to provide last-mile digital financial services like as credit, deposit, pension, scholarships, and remittance.

Human Resources and Employment

  • India is a young country, with 62 percent of the population in the working age group and about 1 million new job seekers every year.
  • The country’s average age is just 28 years. This is referred to as a demographic surplus. If correctly utilised, this can help India reach its aim of becoming a $5 trillion economy by 2024 by creating a demographic dividend.
  • To meet the ambitions of the youth, about 9 billion non-agricultural employment will need to be created in the next decade. If this is not done, the youth’s energy would be channelled towards illegal activities, resulting in a demographic calamity for India.

Sunrise Sectors:

  • This is an umbrella word for sectors that are still in their early stages of development but have demonstrated the potential for fast growth in the future.
  • Sunrise sectors are advanced technology-based industries such as artificial intelligence, machine learning, data science, robotics, 3D printing, blockchain technology, and quantum computing.

Employment Potential:

  • These industries have a lot of potential for creating jobs in the country. At the same time, they necessitate highly trained personnel, who are in high demand and well compensated according to industry norms.
  • The only drawback in these fields is that they necessitate regular skill updates.
  • The National Skill Qualifications Framework (NSQF) is a set of national standards for skill qualifications. It’s a competency-based framework with several levels that allows someone to learn the abilities they want.
  • The framework’s dynamic interaction with the industry makes it useful. It is kept up to date in response to industry demand, and it bridges the gap between obsolete higher education curricula and industry-required skills.

COVID’s Impact:

  • COVID-induced Lockdown has resulted in a shift in work patterns, with employers preferring remote work and working from home to save energy and renting costs.
  • Job searchers must take use of the possibilities of remote work to identify highly remunerative professions that do not require physical presence and are actually situated in the virtual world.

Digital India Initiative:

  • In a world where talents are widely available and opportunity is democratised, projects like the Digital India Initiative are expected to pay off handsomely for the country’s citizens. By bridging the rural-urban gap, the Digital India Initiative aims to digitally skill the workforce and empower individuals.
  • DESH-Stack e-portal (Digital Ecosystem for Skilling and Livelihood): The site aims to provide residents with online training in order to skill, reskill, and upskill them. It will also make job searching and matching based on skill requirements easier, as well as simplifying online payments.

Other Digital Initiatives:

  • To make it easier to find work and promote entrepreneurship in the country, the government has launched Udyam (a self-declaration portal for entrepreneurs), e-SHRAM (a centralised database of unorganised workers), and ASEEM (a portal that connects skilled workers with market demand).

Future Requirement:

  • It is critical to recognise that the near future contains enormous opportunity for those with the right combination of skill sets, problem-solving abilities, and an inventive mindset.
  • In such an atmosphere, someone with emotional intelligence, creativity, leadership abilities, and learning agility would be able to grow faster than others.
  • Traditional educational systems based on outmoded material and rote learning abilities must be replaced with personalised, self-directed learning. Instead, for in-depth acquisition and absorption of essential knowledge, the educational system must develop critical thinking, communication skills, and collaborative skills.

Ecological Economy

Budget Allocation:

  • The Ministry of Environment, Forest and Climate Change (MoEFCC) has increased its budget allocation by 5.6 percent to Rs 3030 crore.
  • In addition, the Finance Minister designated the green economy as a sunrise sector, indicating the government’s desire to prioritise environmental protection and animal conservation.

Circular Economy:

  • Circular economy refers to the use of obsolete components or waste material as a raw material in the manufacture of new items, reducing waste.
  • The Indian government has promoted the circular economy by encouraging the reuse and recycling of goods.

Electric Vehicles Get a Boost:

  • The worry linked with the lack of charging facilities on the country’s roadways has emphasised the problem of electric mobility.
  • The government has announced plans to improve the charging infrastructure by allowing electric vehicles to switch out their batteries.
  • Electric vehicles are an essential part of the Indian government’s goals to reduce carbon emissions.

Ethanol Blending:

  • The budget encourages ethanol blending by imposing a Rs 2 per litre differential excise levy on unblended fuel. By 2025, the goal is to boost blending from its present level of 8% to 20%.
  • States, on the other hand, have grumbled about the inconsistent supply of ethanol for blending across the country.

Stubble Burning:

  • To encourage farmers to avoid stubble burning in their fields, the budget includes a provision to co-fire biomass pellets in thermal power plants.
  • This would reduce carbon emissions by 38 million tonnes per year, which will assist to reduce air pollution in the northern states.

Other Initiatives:

  • In addition to encouraging agroforestry and private forestry across the country, the government announced initiatives to encourage coal gasification by establishing four pilot projects.
  • Similarly, a renewed focus on upgrading the Energy Conservation Building Code (ECBC) to improve energy efficiency and savings has emerged.

Areas for Improvement:

  • The National Clean Air Programme 2019 (see inset) has to be reviewed and modified, as it has not resulted in a significant reduction in pollution levels in the targeted areas after three years.
  • At the same time, authorities must ensure that appropriate funding is available for air pollution initiatives.
  • Strengthening the Regulation Agencies: In order to strengthen the regulatory system overseeing pollution in the country, it is necessary to raise appropriations for the regulating agencies as well as provide them greater authority. For example, for the past four years, the allocations to the Central Pollution Control Board (CPCB) have remained same at Rs 100 crore.
  • At the same time, the India Forest Survey Report 2021 states that India has lost over 1600 square kilometres of natural forests. Despite the fact that the report claims that this loss has been balanced by an increase in plantings and the quality of cover in some protected areas and reserve forests, considering the difference between natural forests and plantations, this is cause for concern.


Conclusion


The opposition benches have slammed the Union budget as lacking in inventiveness. At the same time, the ruling party has referred to it as a balanced budget.

Regardless of one’s point of view, the budget includes a host of measures in place to deal with the economic slowdown in the post-pandemic world.

Such efforts must be supplemented with year-round, timely actions to promote the economic recovery.

Agriculture’s Importance:

  • India’s agriculture sector is the country’s largest employer. In 2021-22, it generated around 18.8% of India’s Gross Value Added (GVA). The sector’s growth rate has accelerated, rising from 3.6 percent in 2020-21 to 3.9 percent in 2021-22.
  • The Union Budget 2022-23 increased the funding to the Ministry of Agriculture and Farmers Welfare by 4.5 percent to Rs 1.32 lakh crore, recognising its importance in India’s economy.

COVID’s Impact:

  • Agriculture was the only industry that did not experience a drop as a result of the COVID-induced shutdown. In reality, the agricultural sector has been in the vanguard of the economy’s recovery following the pandemic.
  • MSPs are currently in place for 22 crops, comprising 14 kharif crops, 6 rabi crops, and two commercial crops. The MSP-purchased food grains are used to provide monthly rations to over 80 million recipients under the National Food Security Act.
  • According to the Union Budget 2022-23, the government will pay paddy and wheat farmers Rs 2.37 lakh crore in direct payments in lieu of MSP.

Agricultural Credit:

  • The government has increased the objective for agricultural credit to Rs 18 lakh crore for 2022-23, up from Rs 16.5 lakh crore last year, in order to make agriculture more technology-intensive and efficient.
  • In addition, 2.7 crore Kisan Credit Cards (KCC) have already been provided to farmers, with 14 lakh new KCCs approved for animal husbandry and dairy producers.
  • Drones or Unmanned Aerial Vehicles (UAVs) are used for crop assessment, soil analysis, digitalization of land records, and other tasks. Drones or Unmanned Aerial Vehicles (UAVs) are used for crop assessment, soil analysis, digitization of land records, and other tasks.
  • It has already been proven that the knowledge obtained through such studies assists farmers in making educated decisions about the suitability of crops for a given field.

Financial Support:

  • It has been discovered that technology interventions are envisioned but not implemented due to a lack of funds.
  • As a result, the government has approved a 100% subsidy for drone purchases by the Indian Council of Agricultural Research (ICAR), Krishi Vigyan Kendras (KVKs), and State Agricultural Universities up to Rs 10 lakh.

Capacity Building:

  • The government has also begun the process of revising the curriculum at state agricultural colleges in order to keep students pursuing advanced degrees up to date on the most recent developments in the sector.
  • The Agriculture Skill Council of India is assisting in the development of skills in agriculture and associated fields.

River Interlinking Project:

  • The Ken-Betwa Link Project has been given a budget of Rs 44,600 crore by the government. The project has a number of advantages, including an increase in net irrigated land in the drought-prone Bundelkhand region, the provision of drinking water, and the generation of hydro and solar energy.
  • Projects in the Works: Furthermore, the Damanganga-Pinjal, Par-Tapi-Narmada, Godavari-Krishna, Krishna-Pennar, and Pennar-Cauvery Detailed Project Reports have been approved and will be executed after consultation with the beneficiary states.

Rural Women’s Initiatives

National Rural Livelihoods Mission (DAY-NRLM):

  • Deendayal Antyodaya Yojana: It is a government-sponsored programme that began in 2011 with the goal of providing livelihood options to rural disadvantaged families. The programme brings together 10-15 low-income families to form Self Help Groups (SHGs).
  • To launch their own businesses, these SHGs are offered collective loans as well as technical and marketing assistance.
  • By organising over 74 lakh SHGs, the initiative has mobilised 8.09 million rural women. By 2023-24, it seeks to reach 9-10 million rural poor households.

Building Institutions:

  • The scheme provides training to SHG members and organises them into several levels to provide coordination and proper assistance.
  • SHGs in a hamlet, for example, are grouped into Village Organizations (VOs). Cluster Level Forums are formed from a collection of 10-15 VOs (CLFs). The mission currently has around 4.28 lakh VOs and 32,899 CLFs operational.
  • Through the Bank-SHG Linkage, SHGs are given with collateral-free credit. This money comes from the Revolving Fund (RF) and the Community Investment Fund (CIF) (CIF). Until December 2021, SHGs will have leveraged about Rs 4.6 lakh crore in bank credit. They are also eligible for a 3% interest rate reduction if they repay the credit on schedule.

Increased Credit Limit:

  • To their credit, SHG’s NPA percentage is only 2.34 percent. The government of India has increased the allowed credit per SHG from Rs 10 lakhs to Rs 20 lakhs in recognition of their outstanding performance.

Financial Literacy:

The mission also provides financial literacy training to members of SHGs to ensure the use of cutting-edge technologies and the promotion of financial inclusion.

  1. MKSP (Mahila Kisan Sashakitkaran Pariyojana) is a sub-component of DAY-NRLM that was created to increase women farmers’ participation in both farm and non-farm activities. The programme aims to boost farm productivity, provide managerial training, provide food and nutrition security, and promote agricultural sustainability.
  2. SVEP (Start-up Village Entrepreneurship Program) SVEP is a sub-component of DAY-NRLM that promotes entrepreneurial culture at the village level. It establishes an ecosystem at the village level to provide small businesses in rural areas with business support services such as mentoring, seed funding, capacity building, mentorship, training, and marketing assistance.
  3. Aajeevika Grameen Express Yojana (AGEY) is a sub-scheme that aims to give people in rural regions with safe and economical transportation. The SHGs are in charge of providing transportation services. They serve a dual purpose: they provide SHG members with livelihood options while also improving connectivity to isolated village regions.

68,000 women have been identified to work as Business Correspondent Sakhis (BC Sakhis) in order to promote women empowerment and financial literacy among rural impoverished women. They will be trained as BC Sakhis and deployed to provide last-mile digital financial services like as credit, deposit, pension, scholarships, and remittance.

Human Resources and Employment

  • India is a young country, with 62 percent of the population in the working age group and about 1 million new job seekers every year. The country’s average age is just 28 years. This is referred to as a demographic surplus. If correctly utilised, this can help India reach its aim of becoming a $5 trillion economy by 2024 by creating a demographic dividend.
  • To meet the ambitions of the youth, about 9 billion non-agricultural employment will need to be created in the next decade. If this is not done, the youth’s energy would be channelled towards illegal activities, resulting in a demographic calamity for India.

Sunrise Sectors:

  • This is an umbrella word for sectors that are still in their early stages of development but have demonstrated the potential for fast growth in the future. Sunrise sectors are advanced technology-based industries such as artificial intelligence, machine learning, data science, robotics, 3D printing, blockchain technology, and quantum computing.

Employment Potential:

  • These industries have a lot of potential for creating jobs in the country. At the same time, they necessitate highly trained personnel, who are in high demand and well compensated according to industry norms. The only drawback in these fields is that they necessitate regular skill updates.
  • The National Skill Qualifications Framework (NSQF) is a set of national standards for skill qualifications. It’s a competency-based framework with several levels that allows someone to learn the abilities they want. The framework’s dynamic interaction with the industry makes it useful. It is kept up to date in response to industry demand, and it bridges the gap between obsolete higher education curricula and industry-required skills.

COVID’s Impact:

  • COVID-induced Lockdown has resulted in a shift in work patterns, with employers preferring remote work and working from home to save energy and renting costs. Job searchers must take use of the possibilities of remote work to identify highly remunerative professions that do not require physical presence and are actually situated in the virtual world.

Digital India Initiative:

  • In a world where talents are widely available and opportunity is democratised, projects like the Digital India Initiative are expected to pay off handsomely for the country’s citizens. By bridging the rural-urban gap, the Digital India Initiative aims to digitally skill the workforce and empower individuals.
  • DESH-Stack e-portal (Digital Ecosystem for Skilling and Livelihood): The site aims to provide residents with online training in order to skill, reskill, and upskill them. It will also make job searching and matching based on skill requirements easier, as well as simplifying online payments.

Other Digital Initiatives:

  • To make it easier to find work and promote entrepreneurship in the country, the government has launched Udyam (a self-declaration portal for entrepreneurs), e-SHRAM (a centralised database of unorganised workers), and ASEEM (a portal that connects skilled workers with market demand).

Future Requirement:

  • It is critical to recognise that the near future contains enormous opportunity for those with the right combination of skill sets, problem-solving abilities, and an inventive mindset. In such an atmosphere, someone with emotional intelligence, creativity, leadership abilities, and learning agility would be able to grow faster than others.
  • Traditional educational systems based on outmoded material and rote learning abilities must be replaced with personalised, self-directed learning. Instead, for in-depth acquisition and absorption of essential knowledge, the educational system must develop critical thinking, communication skills, and collaborative skills.

Ecological Economy

Budget Allocation:

  1. The Ministry of Environment, Forest and Climate Change (MoEFCC) has increased its budget allocation by 5.6 percent to Rs 3030 crore.
  2. In addition, the Finance Minister designated the green economy as a sunrise sector, indicating the government’s desire to prioritise environmental protection and animal conservation.

Circular Economy:

  1. Circular economy refers to the use of obsolete components or waste material as a raw material in the manufacture of new items, reducing waste.
  2. The Indian government has promoted the circular economy by encouraging the reuse and recycling of goods.

Electric Vehicles Get a Boost:

  1. The worry linked with the lack of charging facilities on the country’s roadways has emphasised the problem of electric mobility.
  2. The government has announced plans to improve the charging infrastructure by allowing electric vehicles to switch out their batteries. Electric vehicles are an essential part of the Indian government’s goals to reduce carbon emissions.

Ethanol Blending:

  • The budget encourages ethanol blending by imposing a Rs 2 per litre differential excise levy on unblended fuel. By 2025, the goal is to boost blending from its present level of 8% to 20%.
  • States, on the other hand, have grumbled about the inconsistent supply of ethanol for blending across the country.

Stubble Burning:

  • To encourage farmers to avoid stubble burning in their fields, the budget includes a provision to co-fire biomass pellets in thermal power plants. This would reduce carbon emissions by 38 million tonnes per year, which will assist to reduce air pollution in the northern states.

Other Initiatives:

  • In addition to encouraging agroforestry and private forestry across the country, the government announced initiatives to encourage coal gasification by establishing four pilot projects.
  • Similarly, a renewed focus on upgrading the Energy Conservation Building Code (ECBC) to improve energy efficiency and savings has emerged.

Areas for Improvement:

  • The National Clean Air Programme 2019 (see inset) has to be reviewed and modified, as it has not resulted in a significant reduction in pollution levels in the targeted areas after three years.
  • At the same time, authorities must ensure that appropriate funding is available for air pollution initiatives.

Strengthening the Regulation Agencies:

  • In order to strengthen the regulatory system overseeing pollution in the country, it is necessary to raise appropriations for the regulating agencies as well as provide them greater authority. For example, for the past four years, the allocations to the Central Pollution Control Board (CPCB) have remained same at Rs 100 crore.
  • At the same time, the India Forest Survey Report 2021 states that India has lost over 1600 square kilometres of natural forests. Despite the fact that the report claims that this loss has been balanced by an increase in plantings and the quality of cover in some protected areas and reserve forests, considering the difference between natural forests and plantations, this is cause for concern.

Conclusion

The opposition benches have slammed the Union budget as lacking in inventiveness. At the same time, the ruling party has referred to it as a balanced budget.

Regardless of one’s point of view, the budget includes a host of measures in place to deal with the economic slowdown in the post-pandemic world. Such efforts must be supplemented with year-round, timely actions to promote the economic recovery.

UPSC Previous Year Questions

  1. Q. One of the intended objectives of Union Budget 2017-18 is to ‘transform, energize and clean India’. Analyse the measures proposed in the Budget 2017-18 to achieve the objective. (GS3 – 2017)
  2. Q. Pradhan Mantri Jan-Dhan Yojana (PMJDY) is necessary for bringing unbanked to the institutional finance fold. Do you agree with this for financial inclusion of the poorer section of the Indian society? Give arguments to justify your opinion. (GS3 – 2016)
  3. Q. COVID-19 pandemic has caused unprecedented devastation worldwide. However, technological advancements are being availed readily to win over the crisis. Give an account of how technology was sought to aid management to the pandemic. (GS3 – 2020)
  4. Q. What are the major factors responsible for making rice-wheat system a success? In spite of this success how has this system become bane in India? (GS3 – 2020)
  5. Q. What are the main constraints in transport and marketing of agricultural produce in India? (GS3 – 2020)
  6. Q. How can the ‘Digital India’ programme help farmers to improve farm productivity and income? What steps has the Government taken in this regards? (GS3 – 2015)
  7. Q. Comment on the challenges for inclusive growth which include careless and useless manpower in the Indian context. Suggest measures to be taken for facing these challenges. (GS3 – 2016)
  8. Q. The nature of economic growth in India in described as jobless growth. Do you agree with this view? Give arguments in favour of your answer. (GS3 – 2015)
  9. Q. While we found India’s demographic dividend, we ignore the dropping rates of employability. What are we missing while doing so? Where will the jobs that India desperately needs come from? Explain. (GS3 – 2014)
  10. Q. Women empowerment in India needs gender budgeting. What are the requirements and status of gender budgeting in the Indian context? (GS3 – 2016)
  11. Q. What are the continued challenges for women in India against time and space? (GS3 – 2019)
  12. Q. Discuss the various economic and socio-cultural forces that are driving increasing feminization of agriculture in India. (GS3 – 2014)
  13. Q. What are the key features of the National Clean Air Programme (NCAP) initiated by the Government of India? (GS3 – 2020)

Practice Questions for the Mains

  1. Q. What are Virtual Digital Assets, and how do they work? Do you believe that India’s continuous ambiguity on cryptocurrencies is prompting investors to be concerned about investing in digital assets in the country?
  2. Q. What are the demands of the country’s farmers? Discuss in light of the Indian government’s repeal of agricultural measures in response to farmer protests.
  3. Q. List the key characteristics of the Deendayal Antyodaya Yojana – National Rural Livelihoods Mission. Consider the impact of forming Self-Help Groups in rural areas.
  4. Q. Examine the initiatives taken in the Union Budget to solve the country’s employment-generation challenges.
  5. Q. ‘India’s NDCs, as listed in the Paris Climate Agreement, are merely the culmination of a long history of spiritual oneness with the environment and forest.’ Analyze critically.


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