Sol –
Agriculture is the backbone of rural livelihoods ,employing over 45% of the workforce, yet farmer incomes remained low and volatile.
Major Government Initiatives:
- Pradhan Mantri Kisan Samman Nidhi
- More than 11 crore farmers have been benefited under PM-KISAN
- Pradhan Mantri Kisan Maandhan Yojna (PMKMY)
- 23.61 lakh farmers had enrolled under PMKMY
- Improved access to quality seeds
- Climate-resistant seeds [Ex – heat-tolerant wheat varieties]
- Seed banks
- Better irrigation facilities
- Per drop more crop – Financial assistance is provided at 55 per cent of the total project cost for small and marginal farmers, and 45 per cent for other farmers for installation of micro irrigation
- Drip irrigation reduces water consumption by 39-55 per cent and boosts crop yields by 33-41 per cent due to targeted water delivery
- Micro irrigation Fund (MIF) – 2 per cent interest subvention to states on loans availed under MIF
- Efficient water management practices
- Per Drop More Crop
- AVNI Grameen App – To capture data related to rejuvenation of waterbodies in India [Geo tagging and verficiation by villagers]
- Soil health improvements
- Modern post-harvest infrastructure
- Accessible markets
- Agricultural price policies
- Electronic-negotiable warehouse receipt (e-NWR)-based Pledge Financing (CGS-NPF)
- Farmers can obtain loans against e-NWRs issued for agricultural and horticultural commodities stored in accredited warehouses.
- e-National Agriculture Market
- National Mission on Sustainable Agriculture
- Agricultural Infrastructure Fund (AIF): ₹1 lakh crore fund to develop storage, cold chains, and processing units and ₹1 lakh crore fund to develop storage, cold chains, and processing units.
- PM Matsya Sampada Yojana (PMMSY):-
- Boosted fisheries export and employment.
- Horticulture production reached 351 million tonnes, surpassing food grains.
- National Mission on Natural Farming (NMNF):
- Promotes low-cost, chemical-free farming using traditional techniques.
- Helps reduce input costs and improve soil health.
- Supported in 11 lakh hectares as per Economic Survey 2024-25.
Effectiveness:
- Direct benefit transfers (PM-KISAN) helped increase rural consumption post-pandemic, as noted in the Economic Survey.
- Crop diversification and allied activities raised non-crop income, key to income growth in states like Punjab and Andhra Pradesh.
- In Maharashtra, drip irrigation under PMKSY improved sugarcane yield by 20% and cut water use by 30%.
Challenges:
- Limited land holdings (86% are small/marginal farmers).
- Climate change impacts and lack of awareness about schemes.
- Market volatility and weak cold chain infrastructure.
Conclusion:-
With a focus on Jai Jawan, Jai Kisan, Jai Vigyan, and Jai Anusandhan, India can build a future where agriculture is not just a way of life, but a profitable and dignified livelihood.
Sol –
India’s industrial policies since independence aimed to promote sustainable growth, create employment, and make use of the country’s large demographic dividend. These policies shaped India’s industrial journey from 1948 to 1991.
Evolution of Industrial Policies (1948–1991)
- Industrial Policy 1948 :-
- Aimed at self-reliance through a mixed economy, with both public and private sectors playing a role
- Classified industries in 4 categories Like – Strategic Industries (Public), Basic / Key Industries (Public cum private), Important Industries (Controlled Private Sector), Other Industries (Private and Cooperative Sector)
- Industrial Policy 1956
- Economic Constitution of India or The Bible of State Capitalism
- Shifted towards a more socialist approach, with the public sector taking priority in key industries.
- Focused on import substitution and building a strong domestic industrial base to reduce dependency on foreign goods.
- Divided industries into three schedules to control and guide development.
- Stressed the importance of cottage and small-scale industries.
- Industrial Policy 1977
- Promotion of cottage and small industries
- Encouraged the worker’s participation in management from shop floor level to board level.
- Industrial Policy 1980
- Aimed to increase industrial productivity and competitiveness by liberalizing the industrial sector.
- Industrial Policy 1991 (New Industrial Policy)
- De-reservation and Disinvestment of the Public sector
- Abolition of Industrial Licensing
- Liberalization of Foreign Investment (Eg. – Recently India has cleared the first 100% FDI in the defense sector, with permissions granted to Sweden’s Saab to set up a new rockets manufacturing facility in India)
- Overall supported Liberalisation, Privatization and Globalization (LPG).
Impact and Achievements:
- Helped in creating a strong industrial foundation in areas like steel, energy, and manufacturing.
- Employment in small-scale and rural industries was promoted, helping support livelihoods in less-developed regions.
- India’s public sector played a critical role in infrastructure development.
- Domestic demand for goods increased, and a self-reliant industrial base was built.
Limitations and Criticism:
- Industrial growth was concentrated in urban areas, which did not help in addressing regional imbalances effectively.
- Focussed only on internal liberalisation
- Focussed on consumption-led growth & Ignored than export-oriented
- Harms associated with capitalism (Inequality, exploitation, etc)
- Unhealthy competition of Indigenous industries with MNCs
- Departure from Nehruvian socialism
Conclusion
The Draft Industrial Policy 2023 seeks to address the limitations of earlier industrial policies and strategically position India to thrive in the emerging global economic order
Sol –
With 17% of the nation’s GDP and over 27.3 million workers, the manufacturing sector plays a significant role in the Indian economy. The Indian government hopes to have 25% of the economy’s output come from manufacturing by 2025.
Challenges –
- Lack of Infrastructure –
- Power
- Transportation
- Communication
- Lack of fund/finances –
- MSMEs dependent on informal sources
- Bad loan / NPA Poor/immature capital market
- Poor performance –
- Poor Debt to equity ratio
- Poor Interest coverage ratio
- Four balance sheet problem – Banks + Infra companies + NBFC companies + Real state companies
- Bureaucratic hurdles –
- Red tape
- Corruption
- Too many Compliances
- The Chakravyuha Challenge: Ease to enter, barriers to exit
- Ex – In India, it takes 18 days on an avg to start a firm. In Newzealand, it’s only half day It takes almost 4 years to enforce a contract in India and almost 1/3rd of claim cost. In China it’s only 1.5 years [Eco Survey]
- External problems –
- USA-China trade war
- Competition with china
- Russia-Ukraine War (Costly inputs)
- Covid – 19 (Global slowdown)
- Volatile FPI
Reforms undertaken –
- Financial reforms –
- The Emergency Credit Line Guarantee Scheme (ECLGS) for MSMEs
- Insolvency and Bankruptcy Code, 2016
- Institutional credit –
- ICICI – Industrial Credit and Investment Corporation of India
- IFCI – Industrial Finance Corporation of India
- IDBI – Industrial development bank of India
- SIDBI – Small Industries Development Bank of India
- Production Linked Incentive scheme
- Corporate tax cut [22% for existing and 15% for new]
- Budget 2024 – Capex budget is 11.11 lakh crore [11% increase] Capex to GDP ratio – 3.4%
- SEBI reform to developed bond market 4R for Banks [Now NPA reduced from 10% to 4%] Recognize, Recapitalize, Resolve, Reform
- Governance reform –
- Udhyami Mitra portal
- National Single Window System
- Make In India 2.0
- GST
- PM Gati Shakti National Master Plan (NMP)
- Industrial Corridor Development Programme
- Rationalization of 29 labour laws into 4 codes – Code on Wages, 2019, Industrial Relations Code, 2020, Social Security Code, 2020 and Occupational Safety, Health, and Working Conditions Code, 2020
- Reforms to solve external problems –
- Allowing many industries to Get 100% FDI through automatic route
- Ex recently defense manufacturing was allowed to get 100% FDI using an automatic route
- MoU between India and Japan in the field of steel industry
- UAE-India MoU to drive investment and collaboration in industry and advanced technologies
- MoU between India and USA to Enhance Innovation in industries
- Aatmnirbhar Bharat Abhiyan (ABY) to deal with covid – 19 shocks
- Allowing many industries to Get 100% FDI through automatic route
India currently stands among the top three preferred global manufacturing locations and holds substantial potential to achieve exports valued at 1 trillion US dollars by 2030. These ongoing reforms will further bolster India’s trajectory towards becoming a major global manufacturing hub.
Sol –
The Government of India has launched Ease of Doing Business (EoDB) 2.0 in 2022 to strike a balance between necessary regulation with economic freedom. The focus is to tackle the problem of overregulation
Role of State-Led Reforms in Reducing Regulatory Burdens:
- Decentralized Power Enables Tailored Reforms:
- States have exclusive jurisdiction over List II subjects such as land, buildings, water, and local trade & commerce and concurrent powers under List III (labor welfare, electricity, and transport).
- States can make better business friendly regulation on these subjects
- Targeted Deregulation by States:
- Targeting specific sectors like IT, Transfort, Environmental clearance etc. Ex- Karnataka and Andhra Pradesh have fully deregulated night-shift participation for women in the IT industry = Better gender inclusion.
- State Reform Action Plan (SRAP):
- Under the Business Reforms Action Plan (BRAP), states are evaluated based on reform execution. Competitive federalism encourages innovation and replication of best practices across states.
- Single Window and Decriminalization Measures:
- Development of online single-window clearance systems
- Decriminalization of minor business violations, replacing them with civil penalties to build trust and transparency.
- Sector-Specific Policies and Digitization:
- Customized state-level industrial policies (e.g., electronics in Tamil Nadu, textiles in Rajasthan)
- digitization of records and approvals (like land titles, factory registration) helped to reduce delays and compliance burdens.
Possible Reforms & Global Best Practices India can adopt :
- Rationalization of Taxes & Tariffs:
- Reducing electricity tariff for industrial use (Ex – Vietnam sets the electricity sale price at a 10% lower rate than the cost of generating electricity)
- Penalties only after going through a process like first giving show cause notice, right to be heard, allowing appeals against the decision, etc
- Private Sector Participation:
- Increasing the role of private parties in building approvals and inspections.
- For example, Australia and Canada adopted the ‘Public-Private Partnership’ (PPP) model to enforce building safety regulations. Close to seventy percent of applicants chose to obtain licenses from private parties due to their speed of service, availability, and specialization
- Regulatory Sandboxes (UK, Singapore):
- Allow experimentation with relaxed norms for fintech and startups to innovate without regulatory fear
- Reducing Compliance and Administrative Burdens:
- Streamlining approvals through digitization, single-window systems, and minimizing physical inspections can cut costs and delays..
- Labor and Land Reforms:
- Removing outdated restrictions on women’s employment to promote gender inclusivity.
- Optimal Floor Area Ratio (FAR) can prevent land wastage in industrial areas.
- Transparent and Liberal Regulatory Approach:
- Adopting a “minimum necessary, maximum feasible” philosophy
- Government control is limited to critical areas that will lead to entrepreneurial freedom.
- Dispute resolution mechanisms should be objective, digital, and time-bound.
- Incentive-Based Ecosystem:
- Cluster-based and sector-specific strategy that offers targeted incentives and infrastructure support.
Conclusion:
EoDB 2.0 would act as a catalyst to encourage entrepreneurship, attract FDI, and sustain long-term economic growth while maintaining values like transparency, efficiency, and accountability.
