Economy

All (4265)Current Affairs (4243)Mains Practice (77)Mains PYQs by Subjects (40)

Need for New Seeds Act in India

Context: Recently, the 13th National Seed Congress (NSC) 2024 was held at the International Rice Research Institute South Asia Regional Centre (ISARC) in Varanasi, Uttar Pradesh. It urged the Centre government to revisit and modernise the Seeds Bill of 2004 and the Seeds Policy of 2002 to incorporate the latest developments in the seed sector.

Relevance of the topic: Mains: Need for New Seeds Act and Policy and the changes it should incorporate.  

The Seed Act, 1966, the National Seed Policy, 2002 from the basis of promotion and regulation of the Indian Seed Industry.

Why is a New Seeds Act and Policy Needed?

Need for New Seeds Act in India

India's agricultural landscape has undergone significant changes since 1966, necessitating modern legislation to address emerging challenges:

1. Outdated Provisions:

  • The Seeds Act, 1966, and Seeds Rules, 1968, and existing National Seed Policy, 2002 have not been revised to align with advancements in seed technology or international standards.
  • India’s seed quality assurance system and certification standards are much lower than global benchmarks. It needs to be strengthened to adhere to international standards.

2. No clear definition of seeds: 

  • Lack of clear definitions for "farmer seeds" and "commercial seeds" creates policy ambiguities, intellectual property disputes, quality control issues, and challenges in balancing rights of both farmers and commercial seed companies.

3. Issue with voluntary registration of Varieties:

  • The current system allows voluntary registration of seed varieties which leads to discrepancies in seed quality and traceability. Mandatory registration would enhance accountability.
  • Smallholder farmers rely heavily on informal seed systems, so often access lower-quality seeds.

4. Regulatory issues and poor implementation:

  • Delay in clearing license: The companies who invest six to eight years in R&D and develop new varieties of hybrid seeds have to wait for three more years to get required permissions from the Centre and States (difficulties of obtaining licences in every State). Because of this, the access to new technology for farmers is delayed. There is a need for a "One Nation, One Licence" policy to streamline approvals for hybrid seeds across states.
  • The outdated legislations overlap between Central and State jurisdictions, and the inconsistent implementation of policies across sectors lead to:
    • High reliance of farmers on informal seed systems.
    • Conflicts between proprietary technologies and farmers’ rights.
    • Conflicts over royalties and technology-sharing agreements.

This creates roadblocks for the seed sector’s development.

5. Lack of consensus on GM Crops and Technology:

  • Lack of consensus and regulatory framework on genetically modified (GM) crops delays self-sufficiency in critical sectors, like edible oil production. E.g., India imports edible oil from Canada, U.S. and Brazil, etc., but they use genetically modified seeds.

6. Limited Research and Development (R&D):

  • Limited investment in research and development and over-dependence on imported germplasm for advanced hybrids. 

7. For preservation of traditional seed varieties: 

  • For e.g., India over 3,000 varieties of traditional rice and their seeds should be preserved.

Changes that New Seeds Act and Policy should incorporate:

  • The Regulation should include seed pricing, seed supply and decentralised seed planning/ production in addition to regulation of quality.
  • Must uphold farmers' rights of breeding, selecting, saving, using, exchanging/ bartering, distributing and selling seeds.
  • Simplified licensing and certification processes, strengthening intellectual property protections to uphold the rights of companies, foster innovation and enhance ease of doing business. 
  • Each license should be reviewed after some years (3- 5 years) and renewal should be allowed based on actual performance. 
  • Strong punitive clauses which act as deterrents, based on standard formulae to calculate penalties.
  • Appropriate compensation clauses for speedy redressal to farmers who have incurred losses due to seed failure - this should be linked to an insurance system and should be based on calculations that consider loss in yields as well as cost of cultivation.
  • Multi-Iocational agronomic trials of seeds before commercialisation to be undertaken in a scientific manner to ensure region-specific performance.
  • Should exclude traditional practices of farmers of seed production, sale and exchange from its purview.
  • Harmonisation of the new legislation with the Protection of Plant Variety and Farmers Rights Act (PPV & FR), 2001 and the Biodiversity Act, 2002.

Way Forward:

  • Build a road map to ensure that farmers receive high-quality seeds at reasonable prices and on time. (Good quality seeds can boost production by 20%) 
  • Invest in promoting innovative seed technologies for farmers including hybrid and biofortified crops, stress-tolerant varieties, and accelerated breeding cycles. 
  • Developing seed parks, enhancing seed entrepreneurship, improving supply chains, and building capacity among farmers through Public-Private Partnerships in the sector.
  • Utilising advanced technologies and satellite data to optimise crop production. E.g.,
    • The Ministry of Agriculture has released an ‘Abstract Compendium’ and the ‘Rice Fallow Webpage and Atlas’ for Bihar, Chhattisgarh, Jharkhand, and West Bengal. 
    • The atlas will use geospatial technology to map and analyse fallow lands in eastern India to optimise crop planning, enhance system intensification, and improve food security in the region. 

Conclusion: The New Seeds Act and Policy must be in tune with the contemporary situation in the seeds sector and must incorporate the concerns of farmers. A balanced focus on innovation, farmer empowerment, and policy reforms can pave the way for a resilient and globally competitive seed industry. 

First Offshore Mineral Auction

Context: The Central government has recently launched India’s first-ever tranche of e-auction for mineral blocks in the offshore areas of India. 

Relevance of the Topic: Prelims- Facts about Critical Minerals, Offshore Mining Initiative, MMDR Act.

Major Highlights of Offshore Mining Initiative:

  • First Tranche of E-Auction: Includes 13 mineral blocks in the Arabian Sea and Andaman Sea, comprising of construction sand, lime-mud and polymetallic nodules and crusts. 
  • Offshore Mining Areas include: Territorial waters, continental shelf, exclusive economic zone (EEZ) and other maritime zones under India's jurisdiction.
  • Objectives:
    • Reduce import dependence of critical minerals.
    • Increase the availability of mineral resources through offshore explorations.
    • Enhance the domestic capability to adopt sustainable mining practices.
  • The development and regulation of offshore mineral resources in India is governed by the Offshore Areas Mineral (Development and Regulation) Act, 2002. 
  • Challenges in Offshore Mining: 
    • Higher operational costs and technical challenges. 
    • Environmental risks
      • Marine habitat destruction
      • Disruption in ocean carbon cycling and storage.

What are Critical Minerals?

  • Critical mineral are metallic or non-metallic elements that are:
    • Essential for modern technologies, economy and national security, such as electronics, renewable energy, and defense.
    • Subject to distrution of supply chain, often due to limited reserves, geopolitical issues, or complex processing.

Utility of Critical Minerals:

  • Renewable Energy sector: Graphite, Lithium, Cobalt, and Nickel are key components of batteries for electric vehicles (EVs).
  • Defense and Aerospace: Tungsten, molybdenum, and REEs are used in advanced weaponry, satellites, and aircraft.
  • High-Tech Manufacturing: REEs, Indium, and Gallium are used in electronics, semiconductors, and renewable technologies.
  • Agriculture: Fertiliser minerals like potash and phosphate. 

Critical Minerals in India:

  • Different countries create their own lists of critical minerals based on their individual needs and strategic considerations. In 2023, the Ministry of Mines classified 30 minerals as critical minerals. 
    • The list comprises 30 minerals including 17 rare earth elements (REEs) and six platinum-group elements (PGE). 
    • Ten minerals on the list are 100% import-dependent, including- Lithium, Cobalt, Nickel, Vanadium, Niobium, Germanium, Rhenium, Beryllium, Tantalum, and Strontium.
  • India relies heavily on imports (mostly from China) for critical minerals. The demand for these minerals may more than double by 2030. 

Global Distribution: 

  • China is the world’s largest producer of 16 critical minerals. China is responsible for 60% of global production of rare earth elements. 
china critical mineral production
rare earth reserves

Steps taken by the Government of India: 

1. MMDR Amendment Act, 2023:

  • The Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act) is the primary legislation governing the mining sector in India. 
  • The MMDR Amendment Act, 2023:
    • Empowers Central Government to exclusively auction mining lease and composite licence for 24 critical and strategic minerals (listed in the Part-D of the First Schedule to MMDR Act). 
    • Opened mining of critical minerals to private players which was previously limited to public sector undertakings.
    • To boost exploration, Exploration Licence for reconnaissance and prospecting operations has been introduced for 29 deep-seated minerals.

2. Establishment of KABIL:

  • A Joint Venture Company among NALCO, HCL and MECL named Khanij Bidesh India Limited (KABIL) was formed in August 2019. 
  • KABIL's mandate is to ensure India's supply of critical and strategic minerals:
    • Identifying, exploring, acquiring, developing, mining, and processing strategic minerals. 
    • Focus on procuring battery minerals like Lithium and Cobalt.

3. Global Partnerships:

  • India has joined the Mineral Security Partnership with 13 countries, including the U.S., Australia, and Japan aimed to catalyse public and private investment in critical mineral supply-chains globally.
  • India has signed an agreement with Argentina for lithium exploration through KABIL (Khanij Bidesh India Limited).
  • India-Australia has signed the Critical Mineral Investment Partnership for investment in critical mineral projects and for developing supply chains between these two nations.

4. Offshore Mining Initiatives: 

  • Offshore Areas Mineral (Amendment) Act, 2023 introduced transparent and non-discretionary auction process to allocate operating rights in the offshore areas.
  • Deep Ocean Mission to explore the deep ocean to extract polymetallic nodules.
  • National Geoscience Data Repository (NGDR) hosts all exploration related geoscientific data to facilitate the exploration. 

India-US semiconductor Partnership

Context: The Indian government has been consistently giving a push to the semiconductor sector in India. In the light of the recent re-election of Donald Trump as US President, it is important to see how the existing cooperation in critical technology sectors like semiconductor shapes up. 

Relevance of the topic:

Prelims: Key facts about Semiconductors, India-USA Semiconductor Partnership, India Semiconductor Mission (ISM)

Mains: Role of semiconductors in economic growth (factors favouring & challenges associated) 

About Semiconductors

  • Definition: Materials with electrical properties that fall between those of conductors (e.g., metals) and insulators (e.g., rubber).
  • They are sometimes referred to as integrated circuits (ICs) or microchips made from pure elements, typically silicon or germanium, or compounds like gallium arsenide. 
  • Key Components: Diodes, transistors, microchips, photovoltaic cells, LEDs, and mounted piezo-electric crystals.
  • Applications: 
    • Electronics: Foundational components in computers, smartphones, LEDs.
    • Renewable Energy: Used in solar cells.
    • Defence and Space: Integral to missile guidance systems and satellite communication. 

India’s Semiconductor Industry:

  • Current Scenario: Valued at US$ 26.3 billion in 2022; projected to grow at a CAGR of 26.3% to US$ 271.9 billion by 2032.

Factors favouring India:

  • Skilled Workforce: India produces a record number of Science, Technology, Engineering and Mathematics (STEM) graduates annually, which offers the much-needed skilled workforce. 
  • Strong R&D: India leads globally in semiconductor chip design, research & development.
  • Cost Advantages: Lower labor costs compared to developed nations.
  • Global Supply Chain Diversification: India has become a preferred destination for back-end assembly and testing operations amidst diversification of global supply chains to reduce reliance on China. India can position itself as an alternative manufacturing hub.
  • Policy Support: India Semiconductor Mission (ISM), 100% automatic route for investments in the Electronics Systems Design & Manufacturing (ESDM) sector, Establishment of semiconductor plants. (In February 2024, the government approved the establishment of three semiconductor plants, two in Gujarat and one in Assam) 

India Semiconductor Mission (ISM)

  1. Launched in 2021 with a financial outlay of ₹76,000 crore
  2. Aim: To promote the domestic semiconductor industry through incentives and strategic partnerships.
  3. Focus Areas:
    1. Integrated Circuit (IC) design and manufacturing
    2. Semiconductor packaging and assembly
    3. Testing and validation of semiconductor devices
    4. Advanced materials and process technologies
    5. Design automation and tool development
    6. Skill development and human resource capacity building
  • Implementing agency: Ministry of Electronics and Information Technology (MeitY). 
  • Under ISM, government offers incentives to attract investment in semiconductor and display manufacturing:
    • Semiconductor Fab Scheme: Fiscal support on project costs for semiconductor fabs across all technology nodes.
    • Display Fab Scheme: Fiscal support of 50% for setting up display fabs for advanced display technologies.
    • Compound Semiconductor Scheme: Fiscal support of 50% of the capital expenditure for compound semiconductors, discrete semiconductor fabs, ATMP units, and semiconductor packaging.
    • on an equal footing basis, including support for discrete semiconductor fabs.
    • Design Linked Incentive (DLI) Scheme: Promotes domestic semiconductor design companies by providing financial incentives of up to 50% of eligible expenditures. Includes reimbursement for approved costs of software tools, IPs, and prototyping.

India-USA Semiconductor Partnership:

1. iCET (Initiative on Critical and Emerging Technologies):

  • Launch: 2023 
  • Objective: Foster collaboration in critical technologies like semiconductors, AI, 5G, and quantum computing. 
  • Significance:
    • Facilitates dual-use technology transfer.
    • Streamline defense and tech cooperation via frameworks like INDUS-X.
    • Promotes R&D and encourages co-investments in semiconductor design and manufacturing.

2. CHIPS Act Collaboration:

  • International Technology Security and Innovation (ITSI) Fund:
    • Created under the US CHIPS Act (2022).
    • Supports India's efforts to enhance its semiconductor ecosystem by funding critical infrastructure and R&D. 
    • Facilitates cross-border investments and diversification of global supply chains.

3. INDUS-X Initiative:

  • Collaboration between: India's iDEX (Innovations for Defence Excellence) and the US Defense Innovation Unit (DIU).
  • Purpose: To promote innovation in defense technologies, including semiconductors for military applications.
  • Focus: Security-focused chip designs; applications in green energy and telecommunications.

4. Shakti Fab:

  • Description: A proposed semiconductor fabrication plant in India, developed in collaboration with the US Space Force and Indian private players like Bharat Semi and 3rdiTech. 
  • Focus Areas: 
    • Production of multi-material chips for national security, green energy, and telecommunications.
    • Enhancing India's chip manufacturing capabilities for strategic applications.

The partnership is important for several reasons, including:

  1. Reducing reliance on China for semiconductors, which are an essential component of many modern products.
  2. Building a strong relationship for India and the US to stand up to China's growing influence.
  3. Making the global supply chain more stable and secure. 
semiconductor mission

What are the challenges facing India?

  • High Cost of establishment: Fabs are highly capital-intensive undertakings, costing billions of dollars for large facilities. As per a government estimate, it would cost roughly $5-$7 billion to set up a chip fabrication unit in India.  
  • Low Ease of doing business: The process of establishing an indigenous semiconductor facility requires clearances and approvals from multiple government departments. 
  • Technological Constraint: The indigenous manufacturing of semiconductors requires the use of high-end technologies. These technologies are licensed from patent holders at a very high price.
  • Lack of Fabrication Capacities: India has a decent chip design talent but it never built up chip fab capacity. The ISRO and the DRDO have their respective fab foundries but they are primarily for their own requirements and are also not as sophisticated as the latest in the world.
  • Structural constraint: FDI in electronics is less than 1% of the total FDI inflow because of the dearth of skilled labor, delays in land acquisition, and the uncertain tax regime.
  • Unstable power supply: The smooth production of semiconductors requires the availability of an uninterrupted 24*7 power supply. They require a highly reliable and high-quality supply of water, electricity, and insulation from the elements, reflecting the high degree of precision, cost and capital needed to make the sophisticated circuits.
  • Resource Inefficient Sector: Chip fabs require millions of litres of clean water, an extremely stable power supply, a lot of land and a highly skilled workforce.

Conclusion: The India-US semiconductor partnership holds the potential to transform India into a significant player in the global semiconductor ecosystem. With strategic investments, robust domestic policy support, India can achieve technological self-reliance while contributing to global supply chain resilience. 

PAN 2.0 Project 

Context: The Cabinet Committee on Economic Affairs (CCEA) has approved for the PAN 2.0 Project of the Income Tax Department. The PAN 2.0 Project will cost Rs 1435 crore.

Relevance of the topic: Prelims- Key facts about PAN 2.0.

About PAN 2.0 project

  • Aim: To modernise the existing PAN system, introducing new features such as a QR code and transforming PAN into a common identifier for businesses and digital systems.
  • Key Features:
    • It is an upgrade from the current PAN/TAN 1.0 ecosystem to incorporate core and non-core PAN/TAN activities under a unified, paperless, online system.
    • A QR code will be integrated in all new and old PAN cards. Existing PAN card holders can upgrade their PAN cards free of cost. 
    • PAN will be made as a common business identifier for all digital systems of specified government agencies and businesses. All PAN/ TAN/ TIN will be clubbed under this system.
  • PAN 2.0 project aims to set up a unified portal along with a “mandatory PAN data vault system” for all entities using PAN data. This is being done for data protection and cybersecurity purposes.
    • The entities such as banks, insurance companies etc. who take details of PAN will have to keep PAN data safely, mandatorily through the data vault system.
PAN 2.0 Project 

Benefits of PAN 2.0:

  • Ease of access and speedy service delivery with improved quality 
  • Single Source of Truth and data consistency
  • Eco-friendly processes and cost optimisation; and
  • Security and optimisation of infrastructure for greater agility. 

Significance:

  • For businesses, PAN 2.0 would offer a seamless, common system for filing various tax challans and returns.

Existing identification numbers:

1. Permanent Account Number: 

  • Permanent Account Number (PAN) is a 10-digit alphanumeric number that enables the Income Tax Department to link all transactions of a person with the department. These transactions include tax payments, Tax Deducted at Source (TDS) / Tax Collected at Source (TCS) credits, returns of income, specified transactions. 
  • PAN acts as an identifier for the person with the tax department. Once PAN is allotted, it remains the same forever. It is mandatory to quote PAN on filing of income tax return.

2. Tax Deduction and Collection Account Number:

  • Tax Deduction and Collection Account Number (TAN) is a 10-digit alphanumeric number issued by the Income Tax Department. 
  • TAN needs to be obtained by all persons responsible for deducting or collecting tax at source. It is compulsory to quote TAN in TDS/TCS return, any TDS/TCS payment challan, TDS/TCS certificates.

Atal Innovation Mission 2.0

Context: The Union Cabinet has approved the continuation of Atal Innovation Mission (AIM) with an enhanced scope and a budget of Rs. 2750 crores until March 31, 2028.

Relevance of the topic: Prelims- Key provisions of Atal innovation Mission

About Atal Innovation Mission 2.0

  • AIM 2.0 is an upgrade over the original mission AIM 1.0 to expand, strengthen, and deepen India’s vibrant innovation and entrepreneurship ecosystem.
  • Implementation: Centrally Sponsored scheme by NITI Aayog.
  • Vision: To create a robust innovation and entrepreneurship ecosystem, boost India’s Global Innovation Index rank (currently 39) and enhance its startup ecosystem (third-largest in the world).

AIM 2.0 vs AIM 1.0

  • AIM 1.0: Focused on building innovation infrastructure like Atal Tinkering Labs (ATL) and Atal Incubation Centers (AIC).
  • AIM 2.0:
    • Piloting new initiatives to fill gaps in the innovation ecosystem by involving central and state governments, industry, academia and community.
    • Aims to:
      1. Increase input (i.e., ushering more innovators and entrepreneurs)
      2. Improving the success rate/ throughput (i.e., helping more startups succeed)
      3. Improving the quality of ‘output’ (i.e., producing better jobs, products and services)

Key initiatives under AIM 2.0

1. Increase Input:

  • Language Inclusive Program of Innovation (LIPI):
    • To build innovation and entrepreneurship ecosystems in India’s 22 scheduled languages
    • Establish 30 Vernacular Innovation Centers
  • Frontier Program:
    • Customise innovation ecosystem templates for J&K, Ladakh, NE states, Aspirational Districts and Blocks, benefiting 15% of India’s population.

2. Improving Throughput:

  • Human Capital Development Program
    • Train 5500 professionals to build, operate and maintain innovation systems.
  • Deeptech Reactor:
    • Research sandbox for testing ways of commercializing research-based deep tech startups.
  • State Innovation Mission (SIM):
    • Assist states/UTs with building a strong innovation and entrepreneurship ecosystem that focuses on their areas of strength.
  • International Innovation Collaborations program for interventions like:
    • Annual Global Tinkering Olympiad
    • Establish 10 bi-lateral, multilateral engagements with advanced nations
    • Be a knowledge partner of World Intellectual Property Organization (WIPO) to spread models of AIM to global south
    • Anchoring the Startup20 Engagement Group of the G20 for India.

3. Improving the quality of ‘output’:

  • Industrial Accelerator program:
    • Develop minimum 10 Industry Accelerators in critical sectors in Public Private Partnership (PPP) mode.
  • Atal Sectoral Innovation Launchpads (ASIL) program:
    • Create minimum 10 iDEX-like platforms to integrate startups into key sectors of central ministries.

Atal Innovation Mission 1.0

  • Government of India’s flagship initiative to promote a culture of innovation and entrepreneurship.
  • Objective: To create and promote an ecosystem of innovation and entrepreneurship across the country at school, university, research institutions, MSME and industry levels.
  • Launched: 2016.
  • Implementing Agency: NITI Aayog
  • Some of the components of AIM: Atal Tinkering Labs, Atal Incubation Centres, Atal New India Challenge, Mentor of Change Program, Atal Community Innovation Center and Atal Research & Innovation for Small Enterprises (ARISE).
  • All the initiatives of AIM are currently monitored and managed systematically using real-time MIS systems and dynamic dashboards.

National Mission on Natural Farming

Context: The Union Cabinet has approved the National Mission on Natural Farming as a standalone centrally sponsored scheme to create an ecosystem for sustainable farming, thereby generating benefits like improvement in the quality of soil and providing people with chemical-free food.

Relevance of the topic:

Prelims: Key provisions of National Mission on Natural Farming.

Mains: Benefits of Natural Farming, Challenges of Natural Farming.

What is Natural Farming?

  • Natural Farming (NF) is a chemical free farming which involves local livestock integrated natural farming methods, diversified crop systems, etc., allowing the optimum use of functional biodiversity.
  • Natural Farming follows local agro-ecological principles rooted in local knowledge, location specific technologies and is evolved as per the local agro-ecology.

About National Mission on Natural Farming: 

National Mission on Natural Farming
  • Vision: To implement self-sustainable and self-generating natural farming systems for freedom from purchased inputs with the aim to cut down:
    • cost of cultivation
    • enhance farmers income
    • ensure resource conservation, and 
    • safe & healthy soils, environment and food.

Objectives:

  1. To promote an alternative system of farming for freedom from external purchased inputs, cost reduction and thereby increasing income of farmers.
  2. To popularise integrated agriculture-animal husbandry models based on livestock and local resources.
  3. To collect, validate and document Natural Farming being practiced across the country and encourage participatory research with farmers on up-scaling of the mission.
  4. To undertake activities for awareness creation, capacity building, promotion and demonstration of Natural Farming.
  5. To create standards, certification procedure and branding for Natural Farming products.

Key Provisions of the Mission:

  • National Mission on Natural Farming (NMNF) is a centrally sponsored scheme under the Ministry of Agriculture.
  • In the next two years, NMNF will be implemented in 15,000 clusters in Gram Panchayats, which are willing, & reach 1 crore farmers and initiate Natural Farming (NF) in 7.5 lakh Ha area. 
  • Need-based 10,000 Bio-input Resource Centres (BRCs) will be set-up to provide easy availability and accessibility to ready-to-use NF inputs for farmers.
  • Around 2000 NF Model Demonstration Farms shall be established at Krishi Vigyan Kendras (KVKs), Agricultural Universities (AUs) and farmers’ fields, and shall be supported by experienced and trained Farmer Master Trainers.
  • 30,000 Krishi Sakhis/ CRPs(Community Resource Persons) will be deployed for awareness generation, mobilisation and handholding of willing farmers in the clusters.
  • Farmers will be provided with an easy simple certification system and dedicated common branding to provide access to market their natural farming produce. 
  • Real time geo-tagged & referenced monitoring of NMNF implementation shall be done through an online portal.
  • Incentive to farmers for one time on-farm manure production infrastructure: A financial assistance of Rs. 15000/- per ha @ Rs. 5000/- per ha/year for three years.  
  • Training of farmers by Champion farmer and CRP: 6 such trainings of one day duration will be organized at village level for all the farmers in a batch of
    50 farmers. A sum of Rs. 30,000/- is provided for such training @ Rs. 50 per farmer per training. 
  • Farmer Producer Organisations (FPO) formation for farmers practicing Natural Farming: 100 FPOs in the Gangetic belt (5 Km Corridor of Ganga Basin) and another 400 FPOs in the rest of the country from the 10,000 FPO scheme being implemented by the Ministry of Agriculture and Farmers' Welfare
  • Farmer Field School: First year of the natural farming mission will be devoted to the awareness creation through Farmer Field School.
National Mission on Natural Farming: Salient features

Need for Natural Farming: 

  • Pressure on limited resources: The majority of Indians are small and marginal framers who practice subsistence farming. Hence, to increase production from a small area of land, there is greater pressure on soil and water resources. In the long run, it would result in soil degradation and receding water tables. Hence, the farmers need natural farming to transition to sustainable farming practices.
  • Capital and input-intensive agriculture: High-cost of inputs for farming and declining farmers income requires a shift towards sustainable farming practices.
  • Limitations of Conventional Farming Practices: Conventional farming practices, bolstered historically by the Green Revolution, are now showing signs of strain. Issues such as soil degradation, reduced nutrient content in food, and increased chemical residues are alarming. Apart from that there is a looming threat of climate change. Hence, natural farming presents a viable alternative to address these issues. 

Benefits of Natural Farming: 

1. Environmental Sustainability:

  • Soil Health: Natural farming improves soil structure, organic matter content, and biodiversity. A study by the Indian Council of Agricultural Research (ICAR) found that natural farming methods can enhance soil organic carbon by up to 50% compared to conventional farming.
  • Water Conservation: Natural Farming has proved to improve water retention capacity. It requires minimum water consumption, thus, ultimately preserving groundwater reserves, improving the water table, and reducing financial and labour stress on farmers.

2. Climate Resilience:

  • Carbon Sequestration: Natural farming practices such as crop rotation, agroforestry, and cover cropping contribute to carbon sequestration. 
    • Over the past 50 years, greenhouse gas (GHG) emissions resulting from ‘Agriculture, Forestry and Other Land Use’ (AFOLU) have nearly doubled, and projections suggest a further increase by 2050. 
    • As per FAO, the largest share of global methane and nitrous oxide emissions is contributed by Agriculture. Excessive use of fertilizers in conventional farming has significantly contributed to global greenhouse gas (GHG) emissions and climate change. 
  • Climate Adaptation: Natural farming enhances biodiversity and soil health, making farms more resilient to climate extremes like droughts and floods.
    • During the Pethai and Titli cyclones of 2018, the crops cultivated through Natural Farming in Andhra Pradesh, showed greater resilience to heavy winds than the conventional crops. 

3. Biodiversity Enhancement:

  • Agro-ecological Diversity: Natural farming promotes biodiversity through crop diversification and the use of native plant species. 
  • Ecosystem Services: Natural farming practices enhance ecosystem services such as pollination, pest control, and soil fertility. 

4. Economic Benefits for Farmers:

  • Cost Reduction: Natural farming reduces dependence on expensive chemical inputs or fertilisers. A report by CEEW states that Non-Zero Budget Natural Farming (ZBNF) farmers use three times more urea and DAP per acre than ZBNF farmers.
  • Increased Profitability: Studies by the National Bank for Agriculture and Rural Development (NABARD) indicate that farmers practicing natural farming can achieve up to 50% higher net returns due to lower input costs and premium prices for organic produce.

5. Health and Nutrition:

  • Nutrient-Rich Produce: As Natural Farming does not use any synthetic chemicals, health risks and hazards are eliminated. The food has higher nutrition density and therefore offers better health benefits.

6. Social and Cultural Benefits:

  • Preservation of Traditional Knowledge: Natural farming practices are often rooted in traditional knowledge systems. This preservation promotes cultural heritage and community engagement.
  • Community Health: By reducing chemical usage, natural farming minimizes pollution of air, water, and soil, leading to healthier living environments for rural communities.

Challenges related to Natural Farming:

  1. Initial Decrease in Yield & Economic Viability: Transitioning from conventional to natural farming often results in an initial decrease in crop yield, which can deter farmers also, The economic viability of natural farming is uncertain due to lower initial yields.
  2. Knowledge and Skill Gap: Farmers need extensive knowledge and skills to successfully implement natural farming techniques.
    • The Indian Council of Agricultural Research (ICAR) reports that the majority of Indian farmers are not adequately trained in natural farming practices, resulting in poor adoption rates.
  3. Market and Policy Support: There is a lack of established markets and supportive policies for naturally farmed produce. 
  4. Certification and Market Access: Obtaining certification for natural products can be costly, and access to markets can be limited.
  5. Pest and Disease Management: Natural farming relies on non-chemical methods for pest and disease control, which may not always be effective.
  6. Climate Dependence: Natural farming heavily relies on climatic conditions, making it less resilient to climate change. The Intergovernmental Panel on Climate Change (IPCC) notes that climate variability poses significant risks to the stability and predictability of natural farming systems.
  7. Resistance to Change & Lessons from Sri Lanka: Farmers accustomed to conventional practices are often resistant to adopting new natural farming methods.
    • A couple of years ago, Sri Lanka went through economic and political turmoil after it decided to turn completely organic, and banned the import of chemical fertilisers.
    • The government’s policy shift had severe consequences with farmers struggling to get natural fertilisers. They faced a reduction in yields of key crops including rice, putting the country’s food security at risk.

Conclusion

Natural farming represents a critical shift in India's agricultural strategy, aimed at enhancing sustainability, climate resilience, and nutrition security. The transition, although challenging, is necessary to address the declining efficacy of the Green Revolution and the pressing environmental concerns. With strategic planning, technology development, and appropriate incentives, natural farming can pave the way for a more sustainable and secure agricultural future in India.

International Cooperative Alliance

Context: The International Cooperative Alliance (ICA) General Assembly and the ICA Global Cooperative Conference 2024 is scheduled to take place from November 25th to November 30th, 2024 at New Delhi. 

Relevance of the topic: Prelims- Key facts about the ICA as an organisation.

Major Highlights:

  • It will be for the first time in 130 years that both the ICA General Assembly and Global Cooperative Conference are going to be hosted by India.  
  • The Global Cooperative Conference is being hosted by Indian Farmers Fertiliser Cooperative Limited (IFFCO) in collaboration with ICA, and Government of India, and Indian Cooperatives AMUL and KRIBHCO.
  • The UN International Year of Cooperatives 2025 will also be launched.  

About International Cooperative Alliance (ICA):

About International Cooperative Alliance
  • ICA is a non-governmental cooperative organisation founded to unite, represent and serve cooperatives worldwide.
  • Founded in 1895 in London during the first International Cooperative Conference.
  • It is one of the oldest non-governmental organisations and one of the largest ones measured by the number of people represented i.e., 1 billion cooperative members on the planet.
  • HQ: Brussels, Belgium
  • Four regional offices: Africa, Americas, Asia-Pacific, and Europe. 
  • Membership: Over 306 organisations from 105 countries (including India), covering cooperatives in various sectors, including, cooperatives in agriculture, banking, consumer services, fisheries, health, housing, insurance, and industry and services.

Mission:

  • Developing business relationships and partnerships among its members.
  • Organising a rich diversity of regional and international events where organisations meet regularly to share ideas.
  • Facilitating training programmes, events, and publications developed in partnership with cooperative development agencies.

Other Facts about ICA:

  • It has decadal strategic plan ICA 2020-2030 Strategic Plan, named “A People-Centred Path to a Second Cooperative Decade”,
  • It also organises the Global Cooperative Conference.

About Global Cooperative Conference (GCA):

  • It is a biennial event bringing together leaders from cooperative sectors across the globe.
  • India is hosting the 2024 edition for the first time.
  • Theme for 2024: Cooperatives Build Prosperity for All
  • The International year of Cooperatives 2025 will also be launched with the theme “Cooperative build a better world”. This initiative will highlight the transformative role cooperatives play in promoting social inclusion, economic empowerment, and sustainable development.

What is CSR? Corporate Social Responsibility

Context: It has been a decade since Corporate Social Responsibility (CSR) was enshrined into law.

What is Corporate Social Responsibility (CSR)?

CSR is a management concept whereby companies integrate social and environmental concerns in their business operations and interactions with their stakeholders.

  • Section 135 Companies Act, 2013 - CSR provisions are applicable to companies:
    • With an annual turnover of INR 1,000 crore and more
    • Or a net worth of INR 500 crore and more
    • Or a net profit of 5 crore INR and more
  • The Act mandates companies to spend at least 2% of their average net profit in the previous three years on CSR activities.
variety of green plants Corporate Social Responsibility

What are the Benefits of CSR?

  • For Companies:
    • Gaining the trust of communities
    • Attracting and retaining employees
    • Enhancing corporate reputation and brand building
    • Attract investors as they include ethics as part of their assessment while investing
    • Increased profitability as ethical conduct exerts a growing influence on the purchasing decisions of customers
  • For Society:
  • For Govt:

Few Challenges in CSR

  • Failure to Consider Holistic View: Companies still have a narrow perception of CSR. They fail to understand that CSR has an impact on mostly all of the stakeholders of the company and it impacts both society and the environment as a whole - Due to a lack of strategic planning, proper experimentation, innovation, and engagement, companies aren't able to make a meaningful impact on their CSR efforts.
  • Lack of capability in many firms to formulate a long-term robust CSR policy leads to failure in giving definitive directions to CSR spending.
  • Disconnect with local requirements as there is non-availability of well-organised NGOs in remote and rural areas that can assess and identify real needs of the community.
  • Duplication of activities by different corporate houses, which results in competitive approach rather than a collaborative approach.
  • Lack trust and interest of the local community in participating and contributing to CSR activities of companies.
  • Many CSR initiatives and programs are undertaken in urban areas and localities, leaving the needy and poor in rural areas to miss out on the benefits of CSR.
  • Issue of geographic equity as 5 states - Maharashtra, Gujarat, Andhra Pradesh, Rajasthan and Tamil Nadu account for well over one-quarter of all CSR spending.
  • There is lack of an independent agency that can monitor and accreditate CSR efforts.
  • Viewed as additional tax which is spent by the firms rather than given to the government. This is in addition to corporate tax which is already one of the highest in the world.

Way Forward

  • Cooperation between government and corporates: CSR activities should be better aligned and integrated with Government/local administration systems. They should complement and upscale government initiatives rather than create a parallel system and duplicate efforts
  • Community and employee participation: Improving community relations involving employees in CSR can help motivate them and encourage their personal and professional development by inculcating social and ethical values
  • Collaboration for efficiency - between NGOs, and agencies involved in environmental and social work will enable better utilisation of CSR funds
  • Evaluation and monitoring - periodically to prevent fraudulent activities and complete project within the stipulated time
  • Fair and balanced expenditure: Encouraging corporates to spend in neglected areas such as aspirational districts and NER to have regional parity in socio-economic development
  • Relaxation and incentives: The government should further provide relaxation and incentives in corporate tax to corporates complying with CSR regulations
  • High-Level Committee under the Chairmanship of Injeti Srinivas had made the following recommendations: 
    • Extending the scope of CSR applicability to Limited Liability Partnerships (LLPs), which are within the purview of the MCA, and to Banks registered under the Banking Regulation Act, 1949
    • Companies are encouraged to forge partnerships when creating assets for public purposes. The ownership shall rest with the public and the company may act as a custodian to operate it and make it self-sustaining
    • Board of a Company to ascertain the credibility of an Implementing Agency (IA) and carry out necessary due diligence. IAs to be registered with MCA to carry out CSR activities
    • International organisations may be engaged as partners for designing CSR projects, monitoring and evaluation as well as capacity building of CSR-eligible companies and implementing agencies
    • The Board of a company may engage a CSR professional, if it so desires, and the Government may prescribe eligibility criteria for such professionals
    • 5% of CSR-mandated companies be identified on a random basis for third-party assessments on a pilot basis

Conclusion

  • The government is responsible for social development. Corporates cannot replace them in this role but can supplement its role. Corporates can make a meaningful contribution especially if there is a platform that allows them to offer the totality of their skills, technology and resources. With rising fiscal deficit and leakages in the welfare schemes, CSR seeks to address the problems of society in a cost effective manner

Nobel Prize in Economics 2024

Context: The Royal Swedish Academy of Sciences on Monday awarded the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel for 2024 to three US-based economists “for studies of how institutions are formed and affect prosperity”. The Nobel citation states the three economists “have helped us understand differences in prosperity between nations”.

The Big Question?

Nobel Prize in Economics 2024 - Daron Acemoglu, Simon Johnson, James Robinson
  • Why are some nations rich and others poor? Why do some nations fail while others succeed in achieving prosperity? These are questions that have puzzled economists for decades.
    • For instance, the richest 20% of the world’s countries are now around 30 times richer than the poorest 20%. 
    • Moreover, the income gap between the richest and poorest countries is persistent.
    • Although the poorest countries have become richer, they are not catching up with the most prosperous. 
  • Over the years, many explanations have been put forward — everything from biology to geographical location to climatic conditions to evolution has been offered as the reason why some nations have done better than others. 

Answer to this Inter-Nation Inequality

  • This year’s laureates in the economic sciences have demonstrated the importance of societal institutions for a country’s prosperity. By institutions, the laureates refer to the broad set of rules that govern the behaviour of individuals in a society or a country. 
  • They held that societies with a poor rule of law and institutions that exploit the population do not generate growth or change for the better.
  • The three laureates have distinguished between inclusive and extractive institutions.
    • An inclusive institutional framework refers to the existence of democracy, law and order, protection of property rights, etc.
    • By contrast, an extractive institutional framework typically refers to a lack of rule of law, of power being concentrated in the hands of a few (autocracy or dictatorship), and the associated risks of expropriation.
    • These two opposite types of institutional frameworks lead to very different incentives for people in an economy or society.
  • For instance, if people are assured that their property will not be taken away at will, or that their incomes and profits will be protected for generations, they tend to focus on boosting long-term growth and prosperity. 
  • In the absence of an inclusive institutional framework, the incentives collapse, undermining longer-term prosperity.

Arguments to Support Their Findings

  • The laureates examined the European colonisation of large parts of the world.
  • They found that one important explanation for the current differences in prosperity is the political and economic systems that the colonisers introduced, or chose to retain, from the 16th century onward.
  • In some colonies, the purpose was to exploit the indigenous population and extract natural resources to benefit the colonisers. Their decisions were driven by the factor of “mortality”.
    • If the chances of their being killed were high, either because the local population was large in numbers and capable of killing or because the region was home to diseases like malaria, the colonisers chose extractive institutions because they were unwilling to settle down in the colony. 
  • While in other cases, the colonisers built inclusive political and economic systems for the long-term benefit of European settlers.
    • In these colonies, the mortality rate was low. Hence, they chose inclusive institutions that gave people a say, an ability to build a future, and possibly even a fortune.

This effect can be understood in relation to what happened in India under British rule, as the colonisers chose to exploit the nation’s population and natural resources.

About Nobel Prize

  • It is an international award administered by the Nobel Foundation in Stockholm, Sweden, and based on the last will of Alfred Nobel (in 1895).
  • Instituted in 1901, awarded annually in five categories (Physics, Chemistry, Physiology or Medicine, Literature, and Peace) to people for the greatest benefit to humankind in preceding year.

About Nobel Prize in Economics

  • In 1968, Sveriges Riksbank (Sweden’s central bank) established the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel. 
  • The prize is based on a donation received by the Nobel Foundation in 1968 from Sveriges Riksbank on the occasion of the bank’s 300th anniversary.
  • The prize amount is the same as for the Nobel Prizes and is paid by the Riksbank. 
  • The Nobel statutes prohibit the judges from discussing their deliberations for 50 years.

Who awards the prize?

  • The prize in economic sciences is awarded by the Royal Swedish Academy of Sciences, Stockholm, Sweden, according to the same principles as for the Nobel Prizes that have been awarded since 1901.

What do the winners receive?

  • A Nobel diploma, each of which is a unique work of art
  • A Nobel medal
  • A cash prize (set Swedish kronor (SEK) 11.0 million per full Nobel Prize for 2023)

Yield Curve

Context: Lower shorter-tenor borrowing by the Government, impending rate cuts, and higher FPI positioning in the sub-7-year tenor could reinstate the bull-steepening bias of the Government Securities yield curve in the near term. Bull steepening refers to a phenomenon where short-term interest rates fall faster than long-term rates, resulting in a higher spread between the two rates and a steepening of the yield curve.

What are Government Securities?

Government securities (G-Sec) are debt instruments (bonds) that governments issue to raise capital. The value at which the G-Sec is issued is regarded as its face value, and the value at which the G-Sec is traded in the secondary market is referred to as its market value.

What is a Bond Yield?

It is the return received by the investor on the capital invested in a particular bond. The yield of a bond depends on its market value. 

  • If the market value increases above the face value of the bond (the price at which it was purchased in the primary market when it was issued), then the rate of returns on the bond purchase in the secondary market decreases. This phenomenon is often known as the softening of bond yields. 
  • On the other hand, if the market value decreases below the face value of the bond, then the rate of returns on purchasing the bond in the secondary market increases. This phenomenon is known as the hardening of bond yields. 

What is a Yield Curve?

A yield curve is a graph that depicts yields on bonds ranging from short-term debt such as one month to longer-term debt such as 30 years.

Types of Yield Curve & their interpretation

  • The yield on bonds depends upon the risk involved. The higher the risks, the higher the yields.
  • Normal Yield Curve: Normally, the yield on short-term maturity bonds is lower than that of long-term maturity bonds. This can be attributed to increased risk in the longer term (say 30 years). A normal yield curve indicates that yields on longer-term bonds may continue to rise, responding to periods of economic expansion.
  • Inverted Yield Curve: When there are signs of a slowdown in an economy, it would mean that the economy faces risk in the short term. However, the economy may return to normalcy in the long term. Hence, the yield on short-term bonds becomes higher than the yields of long-term bonds. (Inverted Yield Curve). Hence, an inverted yield curve points towards a probable economic recession.
normal yield curve & inverted yield curve

What is Inflation Targeting?

Inflation Targeting is a monetary policy framework wherein the Central Bank of a country focuses only on maintaining the rate of Inflation within a targeted range. 

It was first adopted by New Zealand and subsequently, a large number of countries including India have been following inflation targeting as their core element of monetary policy.

In case of India, the inflation targeting was introduced through the Monetary Policy Framework Agreement signed between the RBI and Government in 2015. 

As per terms of the agreement, RBI's primary objective would be to maintain price stability, while keeping in mind the objective of growth. The RBI is required to maintain a rate of inflation of 4% with a deviation of 2% i.e. inflation has to be maintained between 2% to 6%.

What Are Benefits of Inflation Targeting?

What is Inflation Targeting?
  • Spur investment rate: Flexible inflation target (4+2) would help in achieving sustainable price levels in the markets and as a result may increase savings rate in the economy. This may spur investment rate in the economy leading eventually to higher GDP growth.
  • Promotes export competitiveness: Stable price levels in an economy keeps a check on input prices of goods and services produced in the economy. This maintains the competitiveness of our goods in export markets thereby promoting export growth and reducing current account deficit.
  • Increase Foreign investments: Improved transparency in inflation targeting reduces investor uncertainty allowing them to predict changes in interest rates, and anchors inflation expectations. This will lead to an increased foreign portfolio and direct investments in the longer run.
  • Clear Policy Signal to Markets: The Inflation targeting explicitly states as to what would be the targeted rate of inflation in an economy. Such explicitly mandated targets bring in more clarity and predictability with respect to the rate of inflation and monetary policy formulation.
  • Autonomy and Accountability of RBI: As per the Monetary policy framework agreement, the RBI has been given complete autonomy in maintaining the rate of inflation within the mandated targets. If the RBI fails to maintain the Inflation within the target, then it would be required to submit in writing the reasons for its failure. Such a provision enables the RBI to enjoy autonomy and at the same time, enables the Government to have enhanced accountability over the actions of the RBI.
  • Empirical Evidence: Inflation targeting has been quite successful in some of the advanced economies such as the UK, New Zealand etc. These advanced economies have been able to maintain moderate rates of inflation for a much longer time leading to increased macro-economic stability.

What are Problems and Challenges with Inflation Targeting?

  • Disregards the Multi-faceted role of RBI: In a developing country like India, it is not practical for the central bank to focus exclusively on inflation without taking into account the larger development context. The RBI needs to balance between growth, price stability and financial stability.
  • Inflation-growth Dichotomy: Controlling inflation requires following contractionary monetary policy. However, such a policy would lead to an increase in rate of interest on loans leading to decrease in investment and consumption expenditure causing a decline in GDP growth rates. For example, during 2013-2015, the higher interest rates in the country on account of higher rate of inflation had led to decrease in the GDP growth rates.
  • Poor Monetary Policy Transmission: The Inflation targeting is more suited to the developed economies since the monetary policy transmission in such economies is quite efficient. However, in case of India, the monetary policy transmission is quite inefficient and this can in turn reduce the effectiveness of Inflation Targeting. In response to the cumulative hike in repo rate of 250 basis points during May 2022 to October 2023, banks have revised their marginal cost of funds-based lending rate (MCLR) only by 152 basis points.
  • Supply Side Constraints: Controlling the money supply only alters demand-side inflation and not inflation arising out of supply-side constraints. E.g. rise in prices of vegetables, pulses highlight supply side constraints which are out of the purview of the RBI and hence they continue to erode household savings.
  • No Clear link between Price Stability and Financial Stability: Prior to 2008 Global Financial Crisis, advanced economies were able to maintain moderate rate of inflation for a long term mainly due to adoption of Inflation Targeting. It was believed that Inflation targeting was responsible for overall macroeconomic stability of the country. However, the 2008 Global Financial Crisis has clearly proved that price stability alone cannot lead to financial stability and the excessive focus of the Central banks on price stability may lead to neglect of other crucial functions such as regulation leading to the economic crisis. 
  • Empirical Evidence against Inflation Targeting in India: The RBI was able to maintain a stable rate of Inflation within the mandated range before pandemic. However, in spite of a stable rate of Inflation, the Indian economy faced challenges on multiple fronts. The GDP growth rate reduced to 25 quarter low of 5% for the first quarter of financial year 2019-20. The unemployment increased to a 45-year high of 6.1%. There was a contraction in the manufacturing activity as evident in declining IIP. The agriculture sector stared at agrarian distress. All these clearly highlight that the inflation targeting has failed to promote growth and development.

Conclusion

  • Post-Global Financial crisis, the dominant view around the world is that flexible inflation targeting, rather than pure inflation targeting is more efficient for monetary policy formulation. During times of extraordinary shocks (e.g., pandemics or financial crises), central banks could temporarily adjust their inflation target to allow for more economic flexibility.
  • Additionally, strengthening policy coordination with the government and undertaking structural reforms in the agriculture and transport sector will help India address inflationary pressure due to supply-side shocks.

Plugging the Global Skill Gap

Context: Many people with only high school certificates will begin their jobs in countries like Germany, Japan and Israel. This move is part of the labour mobility agreements which Prime Minister Narendra Modi has crafted.

Historical Examples of Migration

Historical Examples of Migration

Human migration across centuries has shaped cultures in several parts of the world. 

  • Following the discovery of the Americas and Australia in the Age of Exploration, and in the absence of immigration and border controls, people from Europe quickly populated these lands. Thanks to the vast resources available there, Europe was able to escape poverty. 
  • Even Imperial China, which was heavily populated in the eastern mainland, expanded westwards to the vast empty lands of the Gobi desert and the Tian Shan mountains and beyond. 

Importance of Migration for India

  • Source of Remittances: Permanent migration from India of highly-qualified doctors and engineers is brain drain. Until 2000, most doctors and engineers who eventually settled abroad had studied in highly subsidised institutions funded by Indian taxpayers. Their remittances were large, but dwindled as they settled down permanently in the destination countries. 
  • Reduced Share from Developed Countries: Moreover, the total remittances originating from high-income individuals from the US, the UK, Canada and Australia amount to only 32% of the inward remittances to India. 
  • Increasing Share from Manual Workers: On the other hand, manual workers in the UAE, Saudi Arabia, Kuwait, Qatar and Oman contribute 40% of the total remittances to India.

Opportunities for India

Circular migration is a win-win solution, with government-to-government agreements to safeguard the wages and social security of migrant workers in destination countries and their guaranteed return.

  • Care Economy: The ageing population in Western Europe and Japan can incentivise the flow of skilled workers and caregivers from the developing world. The ageing demography of the developed world has created the greatest opportunity for India to enhance the quality of life of many Indians in a single generation. 
  • Digital Economy: Today, there is a great shortage in Europe and Japan of people who can write algorithms for quantum computers, build infrastructure or work in healthcare. 
  • Construction: For example, countries like Israel have a demand for over 100,000 skilled masons, carpenters and construction workers.

Government Initiatives

  • Demand Aggregation: The National Skill Development Corporation (NSDC) has aggregated the skill gap demand for many of India’s partner countries. 
  • State Level Efforts: The Maharashtra Institution for Transformation (MITRA) worked closely with the NSDC, under the Union Ministry of Skill Development (MSD) and the Maharashtra state departments of Labour and Employment, Skills and Entrepreneurship over the last three months to evolve SOPs and policy norms so that skilled youth could access higher wage markets.
  • Skill Upgradation: Though Indian workers may have the requisite skills, they may not be able to demonstrate them in the pre-defined manner with the use of specific tools. Hence, they need booster training. The NSDC has developed a four-day course on Recognition of  Prior Learning (RPL) to upgrade the existing skills.
  • Setting up Training Facilities: The challenge of setting up testing facilities exactly as per the protocol prescribed by Israel was taken up by ITI Pune. Experts at the ITI fabricated the 12 bar bending testing machines which matched the Israeli requirements.
  • Language Training: The state government has also decided to provide them the opportunity to learn Japanese, German or French.

Conclusion

  • Circular migration agreements warrant that these workers will come back to India after a certain time abroad. But they will bring back enhanced experience of working with sophisticated construction machinery and advanced management protocols, which will benefit the Indian construction industry.
  • India should position itself to become the global source of human capital. Circular migration will ensure that the movement takes place at scale and that India also gains from the experience of returning workers.