GS Analyst: Daily Current Affairs

Context:

There is a need to revisit the subject of expenditure allocations by the Finance Commission.

Controversies in Expenditure Allocation:

• Political Parties and Spending Priorities: In democracies, parties in power make decisions on public spending without referendums, to maximize economic value, favoring capital expenditure for its multiplier effect, but non-development expenditure also holds importance.
• Redistribution and Progressive Taxation: Progressive tax structures are employed, but the concept of redistribution remains ambiguous, sometimes seen as providing "freebies" to the poor.
• Public Preferences vs. Economic Value: Land acquisition for larger projects is contentious, as compensation issues arise, affecting landless laborers.

State vs. Centre

• Citizen-Centric State Initiatives: States are more inclined to provide freebies, being closer to citizens and thus more attuned to their preferences.
• Industrial expansion via Freebies: Free or subsidized meals, as well as power and water for farmers, are defended on the grounds of stabilizing prices and supporting vulnerable sections.
• Debates on Loan Waivers and Industry Bailouts: Loan waivers are viewed favorably as they provide direct government support to vulnerable sections, unlike industry bailouts using depositors' money.

Addressing Spending Allocation Challenges

• Election Promises and Fiscal Constraints: Political parties make promises to voters during elections, but there's often a gap between promises and actual delivery due to fiscal limitations.
• The Need for Spending Norms: Implementing spending caps and ensuring parity across all levels of government could be a solution to the allocation dilemma.
• Way forward: The upcoming Finance Commission should consider formulating such norms to guide expenditure decisions effectively.

Context:

In the past two years, Eastern UP has emerged as a hub of vegetable and fruit exports. Progressive farmers have associated with Farmer Producer Organizations (FPOs) of the region and become agents of change.

Empowering Farmers through FPOs

• Addressing Fragmented Holdings: Farmer Producers’ Organizations (FPOs) have emerged as a solution, providing a collective platform for farmers in a specific geographic area, registered under the Companies Act or as cooperatives.
• Roles and Potential of FPOs: FPOs have demonstrated the ability to promote cluster-based farming, enabling economies of scale in input management and technology adoption.
• Central Initiative and State Synergy: The Central government's scheme to establish and promote 10,000 FPOs encourages collaboration among farmers, especially in activities like input management.

FPOs Driving Agricultural Growth

• Convergence of Schemes: FPO Shakti portal aids active FPOs with grievance redressal, partnerships, and convergence, fostering a collaborative platform for agricultural growth.
• Incentives for Infrastructure Development: FPOs receive 3% interest subvention from Agriculture Infrastructure Fund, further augmented by UP government, promoting post-harvest infrastructure like storage.
• Capital subsidies and additional incentives encourage FPOs to establish vital facilities, including warehouses, cold storage, and ripening chambers.

Comprehensive Approach to Agricultural Development

• Technological intervention: Government emphasizes convergence across farm mechanization, seed production, agri-marketing, and technology like agri-drones, fostering holistic agricultural progress.
• Farming expansion: FPOs actively engage in crop diversification and value addition, emphasizing cereals, medicinal crops, and sugarcane-based products for economic prosperity.
• Collaborated approach: FPOs lead initiatives like One District One Product, exemplified by successful Kalanamak rice cultivation, fostering innovation and regional economic growth.

Context:

As per the recent agreements made at the G-20 summit held in Delhi, ambitious goals were set to triple renewable energy capacity and double energy efficiency improvement by 2030 which seems difficult to get completed.

Consequences of Climate change

• G-20 Summit Agreements: G-20 summit in Delhi aims for tripling renewable energy capacity and doubling energy efficiency by 2030. No consensus on phasing out fossil fuels, a critical issue in addressing the climate crisis.
• Normative Ideals for Energy Transition: Effective transition includes internalizing emissions costs and compensating affected parties, placing financial responsibility on wealthier nations or classes.
• India's Stance and Climate Justice: India's climate approach influenced by foreign policy and common but differentiated responsibilities, prioritizing economic growth over climate justice.

Potential Impacts

• Disproportionate Effects on the Poor: Climate-induced events disrupt agriculture, directly leading to income losses for farmers, further deepening existing disparities.
• Link between Inequality and Carbon Emissions: Less equitable societies exhibit higher emissions per economic unit, placing India, with its significant inequality, at heightened risk.
• India's Energy Transition Policies: India's pursuit of ambitious clean energy targets necessitates careful examination of its wide-ranging implications.

Addressing Regional Inequalities

• Balancing Energy Transition: A holistic approach is required to ensure a just transition that does not disproportionately impact vulnerable communities.
• Regional Inequalities in Energy Sources: Renewable energy hubs, on the other hand, are concentrated in relatively wealthier regions, creating an economic and energy divide.
• Role of Sub-National Governments: Sub-national governments play a crucial role in addressing climate concerns, but their priorities may conflict with those of the central government.