News: The government on Wednesday increased the minimum support price (MSP) for wheat for the upcoming rabi season to ₹2,015 per quintal, a 2% hike from the ₹1,975 per quintal rate of last year.
Oilseeds and pulses such as mustard, safflower and masoor dal saw higher MSP hikes of up to 8% in a bid to encourage crop diversification, a statement on the decision of the Cabinet Committee on Economic Affairs.
The MSP is the rate at which the government purchases crops from farmers. Currently, rates are fixed for 23 crops, including six crops during the upcoming rabi or winter season for which sowing will begin in October.
About Minimum Support Price (MSP):
Minimum Support Price (MSP) is a form of market intervention by the Government of India to insure agricultural producers against any sharp fall in farm prices.
The minimum support prices are announced by the Government of India at the beginning of the sowing season for certain crops on the basis of the recommendations of the Commission for Agricultural Costs and Prices (CACP).
MSP is price fixed by Government of India to protect the producer – farmers – against excessive fall in price during bumper production years.
The minimum support prices are a guarantee price for their produce from the Government.
The major objectives are to support the farmers from distress sales and to procure food grains for public distribution. In case the market price for the commodity falls below the announced minimum price due to bumper production and glut in the market, government agencies purchase the entire quantity offered by the farmers at the announced minimum price.
The Price Support Policy of the Government is directed at providing insurance to agricultural producers against any sharp fall in farm prices.
The minimum guaranteed prices are fixed to set a floor below which market prices cannot fall. Till the mid 1970s, Government announced two types of administered prices :
Minimum Support Prices (MSP)
The MSPs served as the floor prices and were fixed by the Government in the nature of a long-term guarantee for investment decisions of producers, with the assurance that prices of their commodities would not be allowed to fall below the level fixed by the Government, even in the case of a bumper crop.
Procurement prices were the prices of kharif and rabi cereals at which the grain was to be domestically procured by public agencies (like the FCI) for release through PDS. It was announced soon after harvest began.
Normally procurement price was lower than the open market price and higher than the MSP. This policy of two official prices being announced continued with some variation upto 1973-74, in the case of paddy. In the case of wheat it was discontinued in 1969 and then revived in 1974-75 for one year only.
Since there were too many demands for stepping up the MSP, in 1975-76, the present system was evolved in which only one set of prices was announced for paddy (and other kharif crops) and wheat being procured for buffer stock operations.
In formulating the recommendations in respect of the level of minimum support prices and other non-price measures, the Commission takes into account, apart from a comprehensive view of the entire structure of the economy of a particular commodity or group of commodities, the following factors:-
Cost of production
Changes in input prices
Input-output price parity
Trends in market prices
Demand and supply
Inter-crop price parity
Effect on industrial cost structure
Effect on cost of living
Effect on general price level
International price situation
Parity between prices paid and prices received by the farmers.
Effect on issue prices and implications for subsidy
The Commission makes use of both micro-level data and aggregates at the level of district, state and the country. The information/data used by the Commission, inter-alia include the following :-
Cost of cultivation per hectare and structure of costs in various regions of the country and changes there in;
Cost of production per quintal in various regions of the country and changes therein;
Prices of various inputs and changes therein;
Market prices of products and changes therein;
Prices of commodities sold by the farmers and of those purchased by them and changes therein;
Supply related information – area, yield and production, imports, exports and domestic availability and stocks with the Government/public agencies or industry;
Demand related information – total and per capita consumption, trends and capacity of the processing industry;
Prices in the international market and changes therein, demand and supply situation in the world market;
Prices of the derivatives of the farm products such as sugar, jaggery, jute goods, edible/non-edible oils and cotton yarn and changes therein;
Cost of processing of agricultural products and changes therein;
Cost of marketing – storage, transportation, processing, marketing services, taxes/fees and margins retained by market functionaries; and
Macro-economic variables such as general level of prices, consumer price indices and those reflecting monetary and fiscal factors.
The increase in MSP for Kharif Crops is in line with the Union Budget 2018-19 announcement of fixing the MSPs at a level of at least 1.5 times of the All-India weighted average Cost of Production (CoP), aiming at reasonably fair remuneration for the farmers.
Government announces minimum support prices (MSPs) for 22 mandated crops and fair and remunerative price (FRP) for sugarcane. The mandated crops are 14 crops of the kharif season, 6 rabi crops and two other commercial crops. In addition, the MSPs of toria and de-husked coconut are fixed on the basis of the MSPs of rapeseed/mustard and copra, respectively. The list of crops are as follows:
The pricing of sugarcane is governed by the statutory provisions of the Sugarcane (Control) Order, 1966 issued under the Essential Commodities Act (ECA), 1955. Prior to 2009-10 sugar season, the Central Government was fixing the Statutory Minimum Price (SMP) of sugarcane and farmers were entitled to share profits of a sugar mill on 50:50 basis.
As this sharing of profits remained virtually unimplemented, the Sugarcane (Control) Order, 1966 was amended in October, 2009 and the concept of SMP was replaced by the Fair and Remunerative Price (FRP) of sugarcane.
A new clause ‘reasonable margins for growers of sugarcane on account of risk and profits’ was inserted as an additional factor for working out FRP and this was made effective from the 2009-10 sugar season.
Accordingly, the CACP is required to pay due regard to the statutory factors listed in the Control Order, which are
the cost of production of sugarcane;
the return to the grower from alternative crops and the general trend of prices of agricultural commodities;
the availability of sugar to the consumers at a fair price;
the price of sugar;
the recovery rate of sugar from sugarcane;
the realization made from sale of by-products viz. molasses, bagasse and press mud or their imputed value (inserted in December, 2008) and;
reasonable margins for growers of sugarcane on account of risk and profits (inserted in October, 2009).
The expected returns to farmers over their cost of production are estimated to be highest in case of Bajra (85%) followed by urad (65%) and tur (62%). For rest of the crops, return to farmers over their cost of production is estimated to be at least 50%.
News: Karnataka Chief Minister Basavaraj Bommai on Wednesday called on Union Minister for Road Transport and Highways Nitin Gadkari and urged him to instruct the National Highways Authority of India (NHAI) to take up the development of the remaining part of the Satellite Town Ring Road around Bengaluru under the Bharatmala Pariyojana.
The Bharatmala Pariyojana (lit. ‘India garland project’) is a centrally-sponsored and funded Road and Highways project of the Government of India.
The total investment for 83,677 km (51,994 mi) committed new highways is estimated at ₹5.35 lakh crore (US$75 billion), making it the single largest outlay for a government road construction scheme (as of December 2017).
The project will build highways from Maharashtra, Gujarat, Rajasthan, Punjab, Haryana and then cover the entire string of Himalayan territories – Jammu and Kashmir, Himachal Pradesh, Uttarakhand – and then portions of borders of Uttar Pradesh and Bihar alongside Terai, and move to West Bengal, Sikkim, Assam, Arunachal Pradesh, and right up to the Indo-Myanmar border in Manipur and Mizoram.
Special emphasis will be given on providing connectivity to far-flung border and rural areas including the tribal and backward areas
Bharatmala Project will interconnect 550 District Headquarters (from current 300) through a minimum 4-lane highway by raising the number of corridors to 50 (from current 6) and move 80% freight traffic (40% currently) to National Highways by interconnecting 24 logistics parks, 66 inter-corridors (IC) of total 8,000 km (5,000 mi), 116 feeder routes (FR) of total 7,500 km (4,700 mi) and 7 north east Multi-Modal waterway ports.
3. ADDITIONAL JUDGES
News: The Supreme Court Collegium, led by Chief Justice of India (CJI) N.V. Ramana, has approved the names of 10 additional judges of the Karnataka High Court and two from the Kerala High Court for appointment as permanent judges of these courts.
About Additional Judges:
Additional Judges can be appointed by the President under clause (1) of Article 224 of the Constitution.
The State Government should first obtain the sanction of the Central Government for the creation of such additional posts.
After the post is sanctioned the procedure to be followed for making the appointment is same as for the appointment of a permanent Judge.
However, a medical certificate will not be necessary from the person being appointed as an Additional Judge.
When an Additional Judge is being considered for confirmation as an Additional Judge for a fresh term, the relevant documents must be sent by the Chief Justice of the High Court concerned along with such recommendation.
However, the Chief Justice of the High Court should not make a recommendation for appointment of an Additional Judge when a vacancy of a permanent Judge is available in that High Court.
Difference between Additional and Ad Hoc Judges:
If there is any temporary increase in the business of the High Court or by reason of arrears of work, and the President feels that the number of the Judges of that Court should be for the time being increased, then he may appoint duly qualified persons to be additional Judges of the Court.
The period of such service must not exceed two years.
No additional Judge of a High Court shall hold office after attaining the age of sixty-two years.
Ad Hoc judges:If at any time,
there is no quorum of the Judges of the Supreme Court available to hold or continue any session of the Court,
the Chief Justice of India may, with the previous consent of the President and after consultation with the Chief Justice of the High Court concerned,
request in writing the attendance at the sittings of the Court, of a Judge of a High Court who is qualified for appointment as a Judge of the Supreme Court to be designated by the Chief Justice of India as an ad hoc Judge, for such period as may be necessary, (Article 127(1)).
4. NATIONAL MISSION ON EDIBLE OILS – OIL PALM
News: Contrary to some northeastern States such as Meghalaya, the Arunachal Pradesh government is keen on “reaping the benefits” of oil palm cultivation. Seeking to allay fears over the impact on forests, Chief Minister Pema Khandu clarified that the 1.33 lakh hectares identified for taking the National Mission on Edible Oils – Oil Palm (NMEO-OP) forward is wasteland.
About National Mission on Edible Oils – Oil Palm:
National Mission on Edible Oils – Oil Palm (NMEO-OP) as a new Centrally Sponsored Scheme with a special focus on the North east region and the Andaman and Nicobar Islands.
Due to the heavy dependence on imports for edible oils, it is important to make efforts for increasing the domestic production of edible oils in which increasing area and productivity of oil palm plays an important part.
Under this scheme, it is proposed to cover an additional area of 6.5 lakh hectare (ha.) for oil palm till the year 2025-26 and thereby reaching the target of 10 lakh hectares ultimately.
The production of Crude Palm Oil (CPO) is expected to go upto 11.20 lakh tonnes by 2025-26 and upto 28 lakh tonnes by 2029-30.
The scheme will immensely benefit the oil palm farmers, increase capital investment, create employment generation, shall reduce the import dependence and also increase the income of the farmers.
Since 1991-92, many efforts have been made by the Government of India to increase the production of oilseeds and oil palm.
The oilseeds production has increased from 275 lakh tons in 2014-15 to 365.65 lakh tons in 2020-21. For harnessing the potential of palm oil production, in the year 2020, an assessment has been made by the Indian institute of Oil Palm Research (IIOPR) for cultivation of oil palm which has given an assessment of around 28 lakh ha. Thus, there is huge potential in oil palm plantation and subsequently production of Crude Palm Oil (CPO). At present only 3.70 lakh hectares is under Oil Palm cultivation. Oil palm produces 10 to 46 times more oil per hectare compared to other oilseed crops and has yield of around 4 tons oil per ha. Thus, it has enormous potential for cultivation.
Keeping the above in view, and also the fact that even today around 98% of CPO is being imported, it is proposed to launch the Scheme to further increase the area and production of CPO in the country. The proposed scheme will subsume the current National Food Security Mission-Oil Palm programme.
There are two major focus areas of the Scheme.
The oil palm farmers produce Fresh Fruit Bunches (FFBs) from which oil is extracted by the industry. Presently the prices of these FFBs are linked to the international CPO prices fluctuations. For the first time, the Government of India will give a price assurance to the oil palm farmers for the FFBs. This will be known as the Viability Price (VP). This will protect the farmers from the fluctuations of the international CPO prices and protect him from the volatility.
This VP shall be the annual average CPO price of the last 5 years adjusted with the wholesale price index to be multiplied by 14.3 %. This will be fixed yearly for the oil palm year from 1st November to 31st October. This assurance will inculcate confidence in the Indian oil palm farmers to go for increased area and thereby more production of palm oil. A Formula price (FP) will also be fixed which will be 14.3% of CPO and will be fixed on a monthly basis. The viability gap funding will be the VP-FP and if the need arises, it would be paid directly to the farmers accounts in the form of DBT.
The assurance to the farmers will be in the form of the viability gap funding and the industry will be mandated to pay 14.3% of the CPO price which will eventually go up to 15.3%.
There is a sunset clause for the scheme which is 1st November 2037. To give impetus to the North-East and Andaman, the Government will additional bear a cost of 2% of the CPO price to ensure that the farmers are paid at par with the rest of India.
The states who adopt the mechanism proposed by the Government of India would benefit from the viability gap payment proposed in the scheme and for this they will enter into MoUs with the Central Government.
The second major focus of the scheme is to substantially increase the assistance of inputs/interventions. A substantial increase has been made for planting material for oil palm and this has increased from Rs 12,000 per ha to Rs.29000 per ha. Further substantial increase has been made for maintenance and inter-cropping interventions. A special assistance @ Rs 250 per plant is being given to replant old gardens for rejuvenation of old gardens.
To address the issue of shortage of planting material in the country, seed gardens will be provided assistance up to Rs.80 lakhs for 15 ha. in Rest of India and Rs.100 lakhs for 15 ha in North-East and Andaman regions. Further, assistance for seed gardens @ Rs.40 lakhs and Rs.50 lakhs for Rest of India and North-East & Andaman regions respectively. Further Special assistance will be provided for the North-East and the Andaman regions in which special provisions is being made for half moon terrace cultivation, bio fencing and land clearance along with integrated farming.
For capital assistance to the industry, for the North East states and Andamans, a provision of Rs 5 core of 5 mt/hr unit with pro rata increase for higher capacity. This will attract the industry to these regions.
5. INDIA – AUSTRALIA 2+2 MEET
News: India and Australia will hold the inaugural 2+2 Ministerial meeting here during the upcoming visit of Foreign Minister Marise Payne and Minister of Defence Peter Dutton. The meeting will be part of Australia’s engagement with regional partners as the Ministers will also visit Indonesia, South Korea and the U.S. for Indo-Pacific consultations.
These inaugural 2+2 discussions are a cornerstone of the Australia-India Comprehensive Strategic Partnership, which is founded on a shared commitment to a secure, stable and prosperous Indo-Pacific region.
The discussion in Delhi is likely to include a bilateral free trade agreement. India and Australia have been in negotiation over a possible free trade deal, which has so far not yielded a positive result.
The Ministerial meetings will be held in the backdrop of the evacuation of western forces from Afghanistan where Australia had a military presence.
Australia has evacuated around 4,100 persons from Afghanistan.
6. PRODUCTION LINKED INCENTIVE SCHEME FOR TEXTILE SECTOR
News: The Union Cabinet on Wednesday approved a ₹10,683 crore Production Linked Incentive (PLI) scheme for the textile sector with a view to “helping India regain its historical dominant status in global textiles trade”.
The Union Cabinet on Wednesday approved a ₹10,683 crore Production Linked Incentive (PLI) scheme for the textile sector with a view to “helping India regain its historical dominant status in global textiles trade”.
Two-thirds of India’s textile exports now are cotton based whereas 66-70% of world trade in textiles and apparel is MMF-based and technical textiles.
India’s focus on the manufacture of textiles in the MMF sector is expected to help boost its ability to compete globally.
The scheme envisages two levels of investment with different sets of incentives.
While any person or firm can invest a minimum ₹300 crore in plant, machinery, and civil works to produce the identified products to ensure eligibility for the PLI, in the second category a minimum investment of ₹100 crore would make an individual or firm eligible to apply for the incentives.
Priority would be given for investment in aspirational districts, tier-three, tier-four towns and rural areas. The scheme is expected to benefit States such as Gujarat, U.P., Maharashtra, Tamil Nadu, Punjab, Andhra, Telangana and Odisha.
Applicants would have two years as investment period and 2024-2025 would be the ‘performance’ year. The incentive flow would start in 2025-2026 and extend for five years.
PLI scheme for Textiles is part of the overall announcement of PLI Schemes for 13 sectors made earlier during the Union Budget 2021-22, with an outlay of Rs. 1.97 lakh crore.
With the announcement of PLI Schemes for 13 sectors, minimum production in India is expected to be around Rs. 37.5 lakh crore over 5 years and minimum expected employment over 5 years is nearly 1 crore.
PLI scheme for Textiles will promote production of high value MMF Fabric, Garments and Technical Textiles in country.
The incentive structure has been so formulated that industry will be encouraged to invest in fresh capacities in these segments.
This will give a major push to growing high value MMF segment which will complement the efforts of cotton and other natural fibre-based textiles industry in generating new opportunities for employment and trade, resultantly helping India regain its historical dominant status in global textiles trade.
The Technical Textiles segment is a new age textile, whose application in several sectors of economy, including infrastructure, water, health and hygiene, defense, security, automobiles, aviation, etc. will improve the efficiencies in those sectors of economy.
Government has also launched a National Technical Textiles Mission in the past for promoting R&D efforts in that sector. PLI will help further, in attracting investment in this segment.