The average income of agricultural households in the country is estimated by National Statistical Office (NSO) through the ‘Situation Assessment Survey of Agricultural Households’ conducted from time to time. The first such survey was conducted in rural parts of the country during National Sample Survey (NSS) 59th round (January 2003- December 2003).

Thereafter, a repeat survey was conducted during NSS 70th round (January 2013- December 2013). As per the Survey results, which although not strictly comparable, the average monthly income per agricultural household from various sources is estimated to have increased from Rs. 2115 in 2003 to Rs. 6426 in 2013.

The Survey report has not mentioned the reasons for low level of income of agricultural households in the country. However, predominance of small and marginal operational holdings, low irrigation coverage, poor soil health, inadequate marketing facilities and post-harvest supporting services, and lack of focus on the allied sectors of agriculture, etc., may be attributed as main reasons for low level of growth of income of people engaged in the agriculture sector.

Growth rate of Gross Value Added (GVA) in agriculture and allied sector is directly and indirectly affected by various factors, including changes in income of agricultural households. With a view to make agriculture more remunerative, various Schemes are implemented by the Government, viz., Pradhan Mantri Krishi Sinchayee Yojana (PMKSY); Soil Health Card (SHC) Scheme; National Agriculture Market Scheme (e-NAM);

Pradhan Mantri Fasal Bima Yojana (PMFBY); National Food Security Mission (NFSM); Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PM-AASHA); Mission for Integrated Development of Horticulture (MIDH); and Rashtriya Krishi Vikas Yojana (RKVY). Besides, Government has adopted the principle of fixing Minimum Support Price (MSP) at a level of 50 per cent over the all-India weighted average cost of production of crops.

Moreover, with a view to provide income support to all farmers’ families across the country, the Central Government has started a new Central Sector Scheme, namely, the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN). The Scheme aims to provide a payment of Rs. 6000/- per year, in three installments of Rs. 2000/- each to the farmer families, subject to certain exclusions relating to higher income groups.

Government has also focused on the aggregation of small and marginal farmers into groups for overcoming market imperfections and to realize better prices for their produce.

Government of India is implementing Dairy Development schemes to provide facilities for storage and marketing of milk & milk products. Besides, State Governments also provide financial assistance for storage and marketing of milk & milk products.

Department of Animal Husbandry & Dairying (DAHD) is providing assistance to cooperatives for village level bulk milk coolers (BMCs) which are installed to cool and preserve milk. As on March 2019, BMC storage capacity at village level and processing facilities at district/regional level available with the dairy cooperatives in the country are 41447 Thousand Litres and 88274 Thousand Litres Per Day respectively. This Department is implementing following schemes for creation/strengthening infrastructure for collection, chilling, processing and marketing of milk and milk products:-

(i) National Programme for Dairy Development (ii) National Dairy Plan-Phase I (iii) Dairy Processing and Infrastructure Development Fund (iv) Dairy Entrepreneurship Development Scheme

As per 19th Livestock Census 2012, there are 190.90 million numbers of cattle in the country owned by 65 million numbers of households. In a cooperative system, farmers owning milch cattle organise dairy cooperative societies (DCS) at village level where they pour milk.

The milk so collected from a cluster of such DCS are stored and cooled in BMCs located at one of these DCS. DAHD provides assistance for BMCs to dairy cooperatives for installation at village level dairy cooperative societies to cool and preserve milk. In Rajasthan, as on December 2019, there are 2686 number of BMCs with installed capacity of 4410 Thousand Litre and 15017 numbers of registered dairy cooperative societies covering 8.20 lakh farmers.

In the country as on March 2019, there is an installed BMC capacity of 41447 Thousand Litre and 1.91 lakh number of dairy cooperative societies covering 169.29 lakh farmer members.

Poultry sector in India is divided into organized and unorganized sector. The commercial poultry sector is organized and 80% of market share is captured by commercial sector. The organized commercial is already modernized and technically improvised.

However, Department of Animal Husbandry and Dairying, Government of India, is implementing Poultry Venture Capital Fund (PVCF) under “Entrepreneurship development and Employment generation” (EDEG) of National Livestock Mission. It is a bankable programme and the Central Government is providing subsidy through National Bank for Agricultural and Rural Development (NABARD) for those beneficiaries taking loan for PVCF.

Department of Animal Husbandry and Dairying, Government of India, is implementing different programmes under National Livestock Mission under which financial assistance is provided to States/ Union Territories Governments for implementation of Rural Backyard Poultry Development (RBPD) and Innovative Poultry Productivity Project (IPPP).

These programmes envisage the components which take care of the shelter, feed, medicine, Equipments, Litter etc to improve the living conditions of the Poultry birds.

Further, the Department of Animal Husbandry and Dairying is implementing a scheme namely “Assistance to States for control of Animal Diseases” (ASCAD) under “Livestock Health and Disease Control” (LH&DC) which covers the vaccination of economically important poultry diseases viz., Ranikhet Disease, Infectious Bursal Disease, Fowl Pox etc., including control and containment of emergent and exotic diseases like Avian Influenza. Department has developed Action plan for Preparedness, Control and Containment of Avian Influenza which was formulated in 2005 and revised in 2006, 2012 and 2015.

Under the LH&DC scheme financial assistance is provided to the States for upgradation of District Diagnostic Laboratories. In addition, there are six Regional Disease Diagnostic Laboratories for prompt and effective diagnosis of different Livestock and poultry Diseases. A National Institute of High Security Animal Diseases (NIHSAD), Bhopal under Indian Council of Agricultural Research (ICAR) has been specially designated as National Referral Laboratory for diagnosis of Avian Influenza which is also financially assisted by the Department of Animal Husbandry and Dairying for diagnosis of Avian Influenza.

As regards to waste management, the ICAR –Central Avian Research Institute (CARI), Izatnagar, Bareilly has developed two pilot scale technologies for waste management and adoption of new renewable energy:

Dilution, Acidification and Carbonization (DAC) technology used for all weather biogas generation exclusively from poultry excreta and further utilization of it is used as manure in agriculture. The signifying point of this technology is that only poultry excreta are required for biogas production. Used slurry has good manure value and germination potential (>90%), hence can be easily applied in agricultural fields without burning effect on plants which is a common problem with crude poultry excreta. The overall impact of this technology is to alleviate environmental pollution, economize poultry production and generate additional income at poultry establishments.

Aerobic composting of poultry wastes (litter, excreta, hatchery waste, slaughter waste, mortalities etc.) has been standardized using various poultry wastes and carbonaceous material (tree leaves, grasses and other plant wastes) for conversion into manure for utilization in organic crop farming as an alternative to chemical fertilizers.

These two technologies reduce pollutants, bad odour and flies from poultry establishments. ln addition, preparation of vermi-compost from poultry litter waste (cage litter) is also being practiced at ICAR institutes.

. Indian Council of Agricultural Research informed that ICAR-National Dairy Research Institute (NDRI), Karnal (Haryana) and Anand Agricultural University, Anand (Gujarat) are undertaking research on basic and applied aspects for developing an alternate method of sexing of cattle semen under a project entitled “Incentivising research in agriculture for developing an alternative method for sexing of semen as the technology” since 2015.

Steps taken by the Government to conserve and develop indigenous breeds of cattle are as under: i) Nationwide Artificial Insemination (AI) programme: Nationwide AI programme has been launched on 11th September 2019 for implementation in 600 districts with less than 50% Artificial Insemination coverage covering 100 villages per district 200 animals per village. During the programe from 15th September 2019 to 15th March 2020 about 1.2 crore animals will be covered, so far 22 lakh Artificial inseminations have been performed and 12.1 lakh farmers got benefitted as on date 31.01.2020.

ii) Krishi Kalyan Abhiyan: Artificial Insemination Coverage (AI) with High Yielding Indigenous Breeds: In the 112 aspirational districts identified by NITI Aayog. Under the programme 9.05 lakh artificial inseminations have been performed for protection of indigenous breeds.

iii) Establishment/strengthening of Embryo Transfer and In-Vitro Fertilization centres: Projects for strengthening/ establishment of 30 ETT/IVF labs have been sanctioned for propagation of elite animals of indigenous breeds and to meet demand to bulls of indigenous breeds. Out of 30 labs approved under the scheme 19 labs have been made established. Centre of Excellence for Indigenous Breeds (CoEIB) are under establishment for providing training in ETT, IVF, Sex Sorted Semen production, Genomics and retraining of skilled manpower in latest developments in breeding technologies.

iv). National Bovine Genomic Centre for Indigenous Breeds (NBGC-IB): Funds have been released to National Bureau of Animal Genetics Resources and National Dairy Development Board for development of genomic chip. A custom made genotyping chip (INDUSCHIP) which is suitable to genotype Indian cattle breeds and their crosses has been developed by National Dairy Development Board (NDDB) and till date 15000 animals have been genotyped in order to create referral population. NDDB has developed buffchip for genomic selection of buffaloes with the help of United States Department of Agriculture (USDA) and till date 4000 buffaloes have been genotyped.

v) Establishment of Facility for Sex Sorted Semen Production: Projects from 12 semen stations Gujarat, Haryana, Kerala, Karnataka, Madhya Pradesh, Maharashtra Tamil Nadu, Telangana, Uttar Pradesh, Uttarakhand, Punjab and Himachal Pradesh have been sanctioned and Central Share has been released to 10 stations. The use of sex sorted semen will not only enhance milk production but also crucial in limiting population of male cattle/ stray cattle.

vi) E Pashu Haat Portal: E Pashu Haat portal has been developed for connecting breeders and farmers regarding availability of quality bovine germplasm of indigenous breeds. Information of 11.31crores semen doses; 363 embryos and 18.13 lakh live animals is available on the portal as on date 31.01.2020.

vii) Gokul Gram: 21 Integrated indigenous cattle development Centres – “Gokul Grams”- are being established under the Rashtriya Gokul Mission with the aim of conservation and development of indigenous bovine breeds in a scientific and holistic manner.

viii) National Kamdhenu Breeding Centre: Two National Kamdhenu Breeding Centre (NKBC) as repository of indigenous germplasm of all indigenous breeds and supply of certified germplasm to the farmers undertaking rearing of indigenous breeds and increasing their stock are under establishment. Establishment of NKBC in Andhra Pradesh at Chintaladevi located in Nellore District has been completed and work is under progress for Northern Region NKBC in Madhya Pradesh.

ix) Pashu Sanjivni: Animals are being identified under the Pashu Sanjivni using poly urethane tags with 12 digit unique identification number and their data is being uploaded on INAPH database. As on date 2.55 crore animals have been tagged and their data have been uploaded on INAPH data base.

x) National Gopal Ratna and Kamdhenu Awards: In order to create awareness and reward for farmers and Institutions who are engaged in scientific management of recognized Indigenous cattle breeds, National Gopal Ratna and National Kamdhenu Award have been instituted under Rashtriya Gokul Mission.

In order to complement and supplement the efforts made by the States for development of cattle and buffalo population, Government of India is implementing National Programme for Cattle and Buffalo Breeding. The scheme is subsumed under Rashtriya Gokul Mission since December 2014. Rashtriya Gokul Mission is being implemented in all the States and Union Territories. Maharashtra is participating under Rashtriya Gokul Mission and central assistance of Rs 66.95 crore has been released to the State since inception of the scheme.

(d) Under National Programme for Dairy Development (NPDD) scheme, approval has been granted during 2019-2020 for strengthening of 231 Dairy Plants to equip them to detect adulterants in milk (Urea, Maltodextrin, Ammonium Sulphate, Detergent, Sugar, Neutralizers etc).

FTIR technology based milk analyser (for accurate detection and estimation of milk, composition and adulterants) in 139 dairy plants of 30,000 litres capacities and above and 92 dairy plants below 30,000 litres capacity has been approved for installation of electronic milk analyser with adulteration testing equipments along with other equipments.

In addition, one State level Central Laboratory each for 18 States has been approved under the programme to ensure instant testing of chemicals and microbiological quality of milk before reaching the consumers. The total cost of the project was Rs 271.64 crore and an amount of Rs 128.56 crore has been released to States as first instalment.

The Finance Minister, Ms Nirmala Sitharaman tabled the Economic Survey 2019-20 on January 31, 2020. Some highlights of the survey are:

State of the economy Gross Domestic Product (GDP): The GDP growth rate is estimated to be 5% in 2019-20 as compared to 6.8% in 2018-19. The GDP growth decelerated for the sixth consecutive quarter. In 2020-21, India’s GDP growth rate is expected to be in the range of 6.0%-6.5%.

In the first half of 2019-20 (April-September), GDP is estimated to grow at 4.8% as compared to the 2nd half of 2018-19 (October-March) at 6.2%. The survey observed that sluggish growth of consumption and consequent decline in fixed investment led to the decline in GDP growth during this period.

The survey noted that the year 2019 was a difficult year for the global economy with world output growth growing at its slowest pace of 2.9% since the global financial crisis in 2009. A weak environment for global manufacturing, trade, and demand adversely impacted the Indian economy.

The survey also stressed that the concerns of over-estimation of India’s GDP are unfounded. Inflation: The Consumer Price Index (CPI) based inflation increased from 3.7% in 2018-19 (April to December, 2018) to 4.1% in 2019-20 (April to December). This increase was mainly due to food inflation. The Wholesale Price Index (WPI) based inflation decreased from 4.3% in 2018-19 to 1.5% in 2019-20 (April to December).

Current Account Deficit (CAD) and fiscal deficit: India’s CAD decreased from 2.1% of GDP in 2018-19 to 1.5% of GDP in 2019-20 (April-December). The fiscal deficit for 2019-20 is estimated at 3.3% and the primary deficit for the year is estimated at 0.2% of GDP (primary deficit is the fiscal deficit excluding the interest payments). As of November 2019, fiscal deficit stood at 114.8% of the budgeted level. The survey noted that fiscal deficit target may have to be relaxed for the current year given the urgent priority of the government to revive growth in the economy.

Agriculture and allied activities Growth of agriculture sector has been fluctuating: it increased from -0.2% in 2014-15 to 6.3% in 2016-17, and then declined to 2.8% in 2019-20. Gross fixed capital formation in agriculture decreased from 17.7% of Gross Value Added (GVA) in 2013-14 to 15.2% of GVA in 2017-18.

The contribution of agriculture to the GVA has decreased from 18.2% in 2014-15 to 16.5% in 2019-20. The decline was mainly due to a decrease in share of GVA of crops from 11.2% in 2014-15 to 10% in 2017-18. The share has been declining on account of relatively higher growth performance of non-agricultural sectors.

Doubling farmer’s income will require addressing issues such as access to credit, insurance coverage, and investments in agriculture. India has relatively lower farm mechanisation which needs to be addressed. Further, the food processing sector requires more focussed attention as it can play an important role in reducing post-harvest losses and aid the creation of an additional market for farm outputs.

Industry and infrastructure The overall industrial sector growth is estimated to be 2.5% in 2019-20 as compared to 6.9% growth in 2018-19. Manufacturing sector is estimated to grow at 2.0% during 2019-20. In 2018-19, share of the Industry sector in GVA was 29.6%.

Index of Industrial Production Growth (IIP) is 0.6% during 2019-20 (April-November). IIP is a measure of industrial performance. It assigns a weight of 78% to manufacturing followed by 14% to mining and 8% to electricity. Manufacturing activities were subdued due to a decrease in domestic demand for key sectors such as automotive and pharmaceuticals. Exports of labour-intensive sectors such as jewellery, basic metals, leather and textile also underperformed during the current financial year. Liquidity crunch due to reduced lending by NBFC also had an adverse impact.

The National Infrastructure Pipeline (NIP) has projected an investment of Rs 100 lakh crore over five years (2020-25) in various projects. The Survey noted that financing of the NIP will be a challenge.

Services sector Services sector is estimated to grow at 6.9% in 2019-20 as compared to 7.5% in 2018-19. The services sector is estimated to contribute 55.3% to India’s GVA in 2019-20. Currently, the services sector accounts for over 50% of the Gross State Value Added in 15 states and UTs. Sub-sectors such as trade, hotels, transport, communication & services related to broadcasting, financial and real estate services saw a deceleration during this period.

The share of services exports in overall exports of India has been increasing. India’s share in the world’s commercial services exports was 3.5% in 2018, twice the share in the world’s merchandise exports at 1.7%.

Human development and employment India’s rank in the human development index was 129 in 2018. Expenditure on social services (including health and education) increased by 1.5% of GDP during the 2014-20 period. Out of pocket expenditure as a percentage of total health expenditure declined from 64.2% in 2013-14 to 58.7% in 2016-17. The Survey also noted that the gross enrolment ratio at secondary, higher secondary and higher education level need improvement.

Total formal employment in the economy increased from 8% in 2011-12 to 10% in 2017-18. During the 2011-18 period, 2.62 crore new jobs were created among regular wages/salaried employees. The female participation in the labour workforce declined, especially in rural areas.

Strengthening trust in market The Survey outlined that India’s aspiration to become $5 trillion-dollar economy by 2025 requires strengthening the trust in the market with pro-business policies. This includes (i) providing equal opportunities for new entrants, enabling fair competition and ease of doing business, (ii) eliminating policies which unnecessarily undermine markets through government intervention, (iii) enabling trade for job creation, and (iv) scaling up the banking sector to be proportionate to the size of the economy. While pro-business policies need to be promoted, pro-crony policies that favour specific private interests and powerful incumbents need to be done away with.

The Survey observed that eliminating cases where government intervention is unnecessary will enable competitive markets and thereby spur investments and economic growth. For instance, the emergence of government as the largest procurer of food led to problems such as rising subsidy burden, divergence between demand and supply of cereals and a disincentive towards crop diversification.

India has jumped from 142 in 2014 to 63 in 2019 in ease of doing business rankings. However, India continues to trail in various parameters such as ease of starting business (rank 136), registering property (rank 154), paying taxes (rank 115), and enforcing contracts (rank 163). These parameters provide a scope for further improvement.

Entrepreneurship at grassroots level Entrepreneurship at the district level has a significant impact on wealth creation at the grassroots level. A 10% increase in registration of new firms in a district yields a 1.8% increase in GDP of the district. The Survey noted that India ranks third in the number of new firms created in the world. Birth of new firms has been dispersed across districts and across sectors.

The level of education and quality of infrastructure in the district influence the creation of new firms significantly. Policies enabling ease of doing business and flexible labour legislation enables new firm creation, especially in the manufacturing sector.

Export of network products for job creation Exports of network products can contribute a quarter of the increase in value-added required for making India a $5 trillion economy by 2025. Network products refer to the products where production occurs across the global value chain operated by multi-national corporations. This can be achieved by integrating ‘Assemble in India for the world’ in the ‘Make in India’ initiative. This can create 4 crore well-paid jobs by 2025 and 8 crore jobs by 2030.

Banking sector India’s banking sector is disproportionately under-developed given the size of its economy. India has only one bank in the global top 100. Public sector banks (PSBs) account for 70% of the market share in Indian banking. However, on various performance parameters, PSBs are inefficient as compared to private banks.

The survey suggests the use of financial technology across all banking functions, employee stock ownership across all levels to enhance efficiencies in PSBs. A GSTN type of entity can be set up for use of big data, artificial intelligence and machine learning on data from PSBs for credit decisions. Such investments will be critical to ensuring better screening and monitoring of large borrowers.

Disinvestment of central public sector enterprises An analysis of 11 central public sector enterprises shows that on average, the privatized enterprises perform better post-privatization than their peers in terms of various parameters, such as net worth, net profit, and net profit margin.

Disinvestment through the strategic sale of CPSEs increase their potential to create wealth. Hence, aggressive disinvestment should be undertaken to bring in high profitability.

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The Finance Commission is a constitutional body formed by the President of India to give suggestions on centre-state financial relations. The 15th Finance Commission (Chair: Mr N. K. Singh) was required to submit two reports. The first report, consisting of recommendations for the financial year 2020-21, was tabled in Parliament on February 1, 2020. The final report with recommendations for the 2021-26 period will be submitted by October 30, 2020.

Key recommendations in the first report (2020-21 period) include: Devolution of taxes to states: The share of states in the centre’s taxes is recommended to be decreased from 42% during the 2015-20 period to 41% for 2020-21. The 1% decrease is to provide for the newly formed union territories of Jammu and Kashmir, and Ladakh from the resources of the central government. The individual shares of states from the divisible pool of central taxes is provided in Table 3 in the annexure.

Income distance: Income distance is the distance of the state’s income from the state with the highest income. The income of a state has been computed as average per capita GSDP during the three-year period between 2015-16 and 2017-18. States with lower per capita income would be given a higher share to maintain equity among states.

Demographic performance: The Terms of Reference (ToR) of the Commission required it to use the population data of 2011 while making recommendations. Accordingly, the Commission used only 2011 population data for its recommendations.

The Demographic Performance criterion has been introduced to reward efforts made by states in controlling their population. It will be computed by using the reciprocal of the total fertility ratio of each state, scaled by 1971 population data. States with a lower fertility ratio will be scored higher on this criterion. The total fertility ratio in a specific year is defined as the total number of children that would be born to each woman if she were to live to the end of her child-bearing years and give birth to children in alignment with the prevailing age-specific fertility rates.

Forest and ecology: This criterion has been arrived at by calculating the share of dense forest of each state in the aggregate dense forest of all the states.

Tax effort: This criterion has been used to reward states with higher tax collection efficiency. It has been computed as the ratio of the average per capita own tax revenue and the average per capita state GDP during the three-year period between 2014-15 and 2016-17.

Grants-in-aid In 2020-21, the following grants will be provided to states: (i) revenue deficit grants, (ii) grants to local bodies, and (iii) disaster management grants. The Commission has also proposed a framework for sector-specific and performance-based grants. State-specific grants will be provided in the final report.

Revenue deficit grants: In 2020-21, 14 states are estimated to have an aggregate revenue deficit of Rs 74,340 crore post-devolution. The Commission recommended revenue deficit grants for these states (see Table 4 in the annexure).

Special grants: In case of three states, the sum of devolution and revenue deficit grants is estimated to decline in 2020-21 as compared to 2019-20. These states are Karnataka, Mizoram, and Telangana. The Commission has recommended special grants to these states aggregating to Rs 6,764 crore.

Sector-specific grants: The Commission has recommended a grant of Rs 7,375 crore for nutrition in 2020-21. Sector-specific grants for the following sectors will be provided in the final report: (i) nutrition, (ii) health, (iii) pre-primary education, (iv) judiciary, (v) rural connectivity, (vi) railways, (vii) police training, and (viii) housing.

Performance-based grants: Guidelines for performance-based grants include: (i) implementation of agricultural reforms, (ii) development of aspirational districts and blocks, (iii) power sector reforms, (iv) enhancing trade including exports, (v) incentives for education, and (vi) promotion of domestic and international tourism. The grant amount will be provided in the final report.

Grants to local bodies: The total grants to local bodies for 2020-21 has been fixed at Rs 90,000 crore, of which Rs 60,750 crore is recommended for rural local bodies (67.5%) and Rs 29,250 crore for urban local bodies (32.5%). This allocation is 4.31% of the divisible pool. This is an increase over the grants for local bodies in 2019-20, which amounted to 3.54% of the divisible pool (Rs 87,352 crore). The grants will be divided between states based on population and area in the ratio 90:10. The grants will be made available to all three tiers of Panchayat- village, block, and district.

Disaster risk management: The Commission recommended setting up National and State Disaster Management Funds (NDMF and SDMF) for the promotion of local-level mitigation activities. The Commission has recommended retaining the existing cost-sharing patterns between the centre and states to fund the SDMF (new) and the SDRF (existing). The cost-sharing pattern between centre and states is (i) 75:25 for all states, and (ii) 90:10 for north-eastern and Himalayan states.

For 2020-21, State Disaster Risk Management Funds have been allocated Rs 28,983 crore, out of which the share of the union is Rs 22,184 crore. The National Disaster Risk Management Funds has been allocated Rs 12,390 crore.

Recommendations on fiscal roadmap Fiscal deficit and debt levels: The Commission noted that recommending a credible fiscal and debt trajectory roadmap remains problematic due to uncertainty around the economy. It recommended that both central and state governments should focus on debt consolidation and comply with the fiscal deficit and debt levels as per their respective Fiscal Responsibility and Budget Management (FRBM) Acts.

Off-budget borrowings: The Commission observed that financing capital expenditure through off-budget borrowings detracts from compliance with the FRBM Act. It recommended that both the central and state governments should make full disclosure of extra-budgetary borrowings. The outstanding extra-budgetary liabilities should be clearly identified and eliminated in a time-bound manner.

Statutory framework for public financial management: The Commission recommended forming an expert group to draft legislation to provide for a statutory framework for sound public financial management system. It observed that an overarching legal fiscal framework is required which will provide for budgeting, accounting, and audit standards to be followed at all levels of government.

Tax capacity: In 2018-19, the tax revenue of state governments and central government together stood at around 17.5% of GDP. The Commission noted that tax revenue is far below the estimated tax capacity of the country. Further, India’s tax capacity has largely remained unchanged since the early 1990s. In contrast, tax revenue has been rising in other emerging markets. The Commission recommended: (i) broadening the tax base, (ii) streamlining tax rates, (iii) and increasing capacity and expertise of tax administration in all tiers of the government.

GST implementation: The Commission highlighted some challenges with the implementation of the Goods and Services Tax (GST). These include: (i) large shortfall in collections as compared to original forecast, (ii) high volatility in collections, (iii) accumulation of large integrated GST credit, (iv) glitches in invoice and input tax matching, and (v) delay in refunds. The Commission observed that the continuing dependence of states on compensation from the central government (21 states out of 29 states in 2018-19) for making up for the shortfall in revenue is a concern. It suggested that the structural implications of GST for low consumption states need to be considered.

Other recommendations Financing of security-related expenditure: The ToR of the Commission required it to examine whether a separate funding mechanism for defence and internal security should be set up and if so, how it can be operationalised. In this regard, the Commission intends to constitute an expert group comprising representatives of the Ministries of Defence, Home Affairs, and Finance. The Commission noted that the Ministry of Defence proposed following measures for this purpose: (i) setting up of a non-lapsable fund, (ii) levy of a cess, (iii) monetisation of surplus land and other assets, (iv) tax-free defence bonds, and (v) utilising proceeds of disinvestment of defence public sector undertakings. The expert group is expected to examine these proposals or alternative funding mechanisms.

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Shri Pokhriyal highlighted that on the educational front, the Government of India is fully committed to the attainment of 2030 Sustainable Development Goals 4. India is working to further UNESCO’s objective of making quality education available to everyone. He said that various steps have been taken to improve the access, equity and quality of education. The Minister added that a New Education Policy is on the anvil, which has been formulated after the largest ever process of consultation with stakeholders. This policy will go a long way towards attainment of SDG Goal 4. He further said that the initiatives like NISHTHA- the world’s largest teacher training programme, LEAP and ARPIT for higher education faculty, Prime Minister’s innovative learning programme DHRUV, or the MOOCS portal SWAYAM are all significant steps in this direction.

Shri Pokhriyal highlighted that the Government is also working to internationalize education through schemes like STUDY IN INDIA that encourages enrolment of foreign students in Indian universities, SPARC that promotes joint research between Indian and foreign institutions and GIAN for international faculty teaching courses in Indian institutions.

He added that India can share its experience with Digital Infrastructure for Knowledge Sharing (DIKSHA), Operation Digital Board (ODB) – Smart Classroom, MOOCS portal SWAYAM with other member countries who need it. Similarly initiatives like NISHTHA, LEAP and ARPIT can be shared with other member countries and collaborations can be built around these.

The Minister said that the values that Mahatma Gandhi stood for, are cherished and respected the world over. He appealed that as the world observes 150 Years of Mahatma Gandhi, India and UNESCO can come together to organize celebrations in member countries. India can share the interactive and digital exhibition on Mahatma Gandhi. Similarly, exhibitions on Sardar Patel and Guru Nanak can be showcased by UNESCO in other countries.

Shri Pokhriyal and Ms Audrey Azoulay signed the Operational Agreement extending the presence of Mahatma Gandhi Institute of Education for Peace and Sustainable Development (MGIEP) for a further period of 5 years. MGIEP is a New Delhi based UNESCO’s Category 1 Research Institute, maintained wholly by the Ministry of Human Resource Development that focuses on Sustainable Development Goal (SDG) 4.7 towards education for building peaceful and sustainable societies across the world. In line with its vision of ‘Transforming Education for Humanity’, the institute’s programmes and products are designed to mainstream social and emotional learning in education systems, innovate digital pedagogies and to put youth as global citizens at the center of the 2030 agenda for Sustainable Development. DG, UNESCO and Shri Pokhriyal also laid the foundation stone for the premises of MGIEP.

The Director-General of UNESCO, Ms Audrey Azoulay is in New Delhi for a 3day visit to India from the 4th to 6th of February 2020. Her visit re-emphasizes India’s close ties with UNESCO since its inception in 1946 and the shared ethos of promotion of peace and intercultural dialogue. The Director General will also call upon Prime Minister Shri Narendra Modi during her visit.

Ms. Audrey Azoulay began her visit from Rajghat by paying her respects to Mahatma Gandhi, who was a living embodiment of UNESCO’s ideals and values. In October 2018, the Executive Board of UNESCO had passed a resolution titled ‘Remembering the legacy of Mahatma Gandhi’ to commemorate his 150th birth anniversary. The DG also

What’s the issue? So far only 11 states have taken steps to notify Gram Nyayalayas. Several states have issued notifications for establishing ‘Gram Nyayalayas’ but all of them were not functioning except in Kerala, Maharashtra and Rajasthan.

Only 208 ‘Gram Nyayalayas’ are functioning in the country as against 2,500 estimated to be required by the 12th five-year plan.

About Gram Nyayalayas: Gram Nyayalayas or village courts are established under the Gram Nyayalayas Act, 2008 for speedy and easy access to justice system in the rural areas of India.

The Act came into force from 2 October 2009.

Composition: The Gram Nyayalayas are presided over by a Nyayadhikari, who will have the same power, enjoy same salary and benefits of a Judicial Magistrate of First Class. Such Nyayadhikari are to be appointed by the State Government in consultation with the respective High Court.

Jurisdiction: A Gram Nyayalaya have jurisdiction over an area specified by a notification by the State Government in consultation with the respective High Court. The Court can function as a mobile court at any place within the jurisdiction of such Gram Nyayalaya, after giving wide publicity to that regards.

They have both civil and criminal jurisdiction over the offences. The pecuniary jurisdiction of the Nyayalayas are fixed by the respective High Courts.

Gram Nyayalayas has been given power to accept certain evidences which would otherwise not be acceptable under Indian Evidence Act.

Procedure to be followed: Gram Nyayalayas can follow special procedures in civil matters, in a manner it deem just and reasonable in the interest of justice.

Gram Nyayalayas allow for conciliation of the dispute and settlement of the same in the first instance.

Appeals: Appeal in criminal cases shall lie to the Court of Session, which shall be heard and disposed of within a period of six months from the date of filing of such appeal. Appeal in civil cases shall lie to the District Court, which shall be heard and disposed of within a period of six months from the date of filing of the appeal.

Significance: The setting up of Gram Nyayalayas is considered as an important measure to reduce arrears and is a part of the judicial reforms. It is estimated that Gram Nyayalayas can reduce around 50% of the pendency of cases in subordinate courts and can take care of the new litigations which will be disposed within six months.

How revenue has been divided? FC has considered the 2011 population along with forest cover, tax effort, area of the state, and “demographic performance” to arrive at the states’ share in the divisible pool of taxes.

In order to reward population control efforts by states, the Commission developed a criterion for demographic effort — which is essentially the ratio of the state’s population in 1971 to its fertility rate in 2011 — with a weight of 12.5%.

The total area of states, area under forest cover, and “income distance” were also used by the FC to arrive at the tax-sharing formula.

Key recommendations: The Commission has reduced the vertical devolution — the share of tax revenues that the Centre shares with the states — from 42% to 41%. The Commission has said that it intends to set up an expert group to initiate a non-lapsable fund for defence expenditure.

State- wise distribution: Shares of the southern states, except Tamil Nadu, have fallen — with Karnataka losing the most. Shares of states like Maharashtra, Himachal Pradesh and Punjab, along with Tamil Nadu, all of which have fertility rates below the replacement level, have increased slightly.

On the other hand, Andhra Pradesh, Kerala, Karnataka, and West Bengal’s shares have fallen, even though their fertility rates are also low. Incidentally, Karnataka, the biggest loser in this exercise, also had the highest tax-GSDP ratio in 2017-18, as per an RBI report on state finances.

Criticisms: The population parameter used by the Commission has been criticised by the governments of the southern states. The previous FC used both the 1971 and the 2011 populations to calculate the states’ shares, giving greater weight to the 1971 population (17.5%) as compared to the 2011 population (10%).

The use of 2011 population figures has resulted in states with larger populations like UP and Bihar getting larger shares, while smaller states with lower fertility rates have lost out. The combined population of the Bihar, Uttar Pradesh, Madhya Pradesh, Rajasthan and Jharkhand is 47.8 crore.

This is over 39.48% of India’s total population, and is spread over 32.4% of the country’s area, as per the 2011 Census.

On the other hand, the southern states of Tamil Nadu, Kerala, Karnataka and undivided Andhra Pradesh are home to only 20.75% of the population living in 19.34% of the area, with a 13.89% share of the taxes.

This means that the terms decided by the Commission are loaded against the more progressive (and prosperous) southern states.

Key performers: In the category of best performance since inception of the Scheme to States/UTs having population of more than 1 crore the first position was awarded to the state of Madhya Pradesh, followed by Andhra Pradesh and Haryana in the third position.

In the same category among States/UTs having population of less than 1 crore, Dadra & Nagar Haveli is in the first position. Himachal stood second and Chandigarh is at the third position.

In the District level awards for States/UTs with population of more than 1 crore, the first position went to Indore in Madhya Pradesh. In the same category for States/UTs with population under than 1 crore, the first position went to Serchhip in Mizoram.

About PMMVY: Pradhan Mantri Matru Vandana Yojana (PMMVY) is a maternity benefit rechristened from erstwhile Indira Gandhi Matritva Sahyog Yojana (IGMSY). The scheme is a conditional cash transfer scheme for pregnant and lactating women.

It provides a partial wage compensation to women for wage-loss during childbirth and childcare and to provide conditions for safe delivery and good nutrition and feeding practices.

Objectives: Promoting appropriate practice, care and institutional service utilization during pregnancy, delivery and lactation.

Encouraging the women to follow (optimal) nutrition and feeding practices, including early and Exclusive breastfeeding for the first six months. Providing cash incentives for improved health and nutrition to pregnant and lactating mothers.

Which countries are affected? The Food and Agriculture Organisation (FAO) of the United Nations has currently identified three hotspots of threatening locust activity, where the situation has been called “extremely alarming” — the Horn of Africa, the Red Sea area, and southwest Asia.

The Horn of Africa has been called the worst-affected area, where the FAO has said there is “an unprecedented threat to food security and livelihoods”. Locust swarms from Ethiopia and Somalia have travelled south to Kenya and 14 other countries in the continent.

In the Red Sea area, locusts have struck in Saudi Arabia, Oman, and Yemen. In southwest Asia, locusts swarms have caused damage in Iran, India, and Pakistan. Pakistan and Somalia have recently declared locust emergencies.

What are locusts? Locusts are a group of short-horned grasshoppers that multiply in numbers as they migrate long distances in destructive swarms (up to 150km in one day). Four species of locusts are found in India: Desert locust (Schistocerca gregaria), Migratory locust (Locusta migratoria), Bombay Locust (Nomadacris succincta) and Tree locust (Anacridium sp.).

How do they inflict damage? The swarms devour leaves, flowers, fruits, seeds, bark and growing points, and also destroy plants by their sheer weight as they descend on them in massive numbers.

The desert locust is regarded as the most destructive pest in India as well as internationally, with a small swarm covering one square kilometre being able to consume the same amount of food in one day as 35,000 people.

About the index: The Index is released by University of Pennsylvania each year since 2008. It evaluates public-policy research analysis and engagement organisations that generate policy-oriented research, analysis, and advice on domestic and international issues. It claims to enable policy makers and the public to make informed decisions on public policy.

Definition of think- tanks: The report defined ”think tanks” as public-policy research analysis and engagement organisations that generate policy-oriented research, analysis, and advice on domestic and international issues, thereby enabling policymakers and the public to make informed decisions about public policy.

How are they ranked? Nomination and Ranking Criteria included think tank”s leadership, staff reputation, quality and reputation of the research and analysis produced, ability to recruit and retain elite scholars, analysts, academic performance, reputation, the impact of a think-tank”s research and programs on policymakers and reputation with policymakers.

Top players: The list was topped by Carnegie Endowment for International Peace of US, followed by Belgium”s Bruegel and French Institute of International Relations (IFRI). UK”s Chatham House was ranked 6th on the list.

Performance of institutions in India: Centre for Science and Environment (CSE) has been placed at No. 16. CSE climbed up two notches in the 14th version of the report. The organisation also moved up three places among ‘best independent think tanks’ to be at No.123 in the world and sixth among Indian think tanks. Globally, it was ranked 41 of 60 organisations committed to energy and resource policy.

India’s Observer Research Foundation (ORF) has jumped more than 90 places to 27th position among 176 global think tanks. Syama Prasad Mookerjee Research Foundation was the highest-ranked Indian think tank with a political party affiliation in the world, getting a rank of 31st, among 38 such institutions. India Foundation and Vivekananda International Foundation were ranked 36th and 37th on that list.

Way ahead: The 2020 report raised some critical threats and opportunities that think tanks across the globe face. It called upon such organisations to develop national, regional, and global partnerships and create new, innovative platforms to deliver for an ever-expanding audience of citizens, policy makers and businesses.

Background: India has the second-largest number of think tanks at 509. The US has the highest number at 1,871.

About the scheme: Aim: To address the need for building shared, professionally managed and strong S&T infrastructure in the country which is readily accessible to academia, start-ups, manufacturing, industry and R&D labs etc.

Implementation: These Centres are expected to house major analytical instruments to provide common services of high-end analytical testing, thus avoiding duplication and reduced dependency on foreign sources.

These would be operated with a transparent, open access policy. DST has already set up three such centres in the country, one each at IIT Kharagpur, IIT Delhi and BHU.

Objectives of the Scheme: To address the problems of accessibility, maintenance, redundancy and duplication of expensive equipment in the institutions.

This will also foster a strong culture of collaboration between institutions and across disciplines to take advantage of developments, innovations and expertise in diverse areas.

Why and how? Such a decision is contrary to the government’s move to encourage InvITs and REITs to provide tax stability to long-term infrastructure investors.

Uncertainty in the tax regime would hurt the sentiment of foreign investors who are already wary of the stability of tax regime in India, they added. The resultant tax burden on the part of investors will put at risk plans for raising about $100 billion with regard to INVITs and REITs.

What are Infrastructure Investment Trusts (InvIT)? It is like a mutual fund, which enables direct investment of small amounts of money from possible individual/institutional investors in infrastructure to earn a small portion of the income as return.

InvITs can be treated as the modified version of REITs designed to suit the specific circumstances of the infrastructure sector. They are similar to REIT but invest in infrastructure projects such as roads or highways which take some time to generate steady cash flows.

What are Real Estate Investment Trusts (REIT)? A REIT is roughly like a mutual fund that invests in real estate although the similarity doesn’t go much further.

The basic deal on REITs is that you own a share of property, and so an appropriate share of the income from it will come to you, after deducting an appropriate share of expenses. Essentially, it’s like a group of people pooling their money together and buying real estate except that it’s on a large scale and is regulated.

Why need InvITs and REITs? Infrastructure and real estate are the two most critical sectors in any developing economy. A well-developed infrastructural set-up propels the overall development of a country.

It also facilitates a steady inflow of private and foreign investments, and thereby augments the capital base available for the growth of key sectors in an economy, as well as its own growth, in a sustained manner.

Given the importance of these two sectors in the country, and the paucity of public funds available to stimulate their growth, it is imperative that additional channels of financing are put in place.

The project is planned to be constructed in Kathua District of J&K on the River Ujh which is a major tributary of River Ravi.

The project, after completion, will enhance the utilization of waters of Eastern Rivers allotted to India as per the Indus Water Treaty.

The Ujh river originates in Kailash mountains (near Bhaderwah hills, part of the Pir Panjal Range) at an altitude of 4,300 metres (14,100 ft). Four streams, Bhini, Sutar, Dunarki and Talan join Ujh at Panjtirthi.