Note: Please note that some inputs have been given by our team in order to make the topic more relevant to UPSC.

 

Topics covered from the Syllabus:

GS-3: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment. GS-3: Infrastructure: Energy, Ports, Roads, Airports, Railways etc.

 

Relevant Government Schemes

PM Jan Dhan Yojana: It was launched to promote financial inclusion of the poor into the formal banking system of the country. As per the government data, almost 45 crore bank accounts have been opened so far under the PM Jan Dhan Yojana. The cumulative balance in the accounts is almost Rs 1.64 lakh crores. PM Suraksha Bima Yojana: This is a social insurance scheme which provides accidental death insurance to the eligible citizens between the age group of 18-70 years. Under the scheme, at an annual premium of Rs 12, the beneficiary is eligible for an insurance of Rs 2 lakh for accidental death and full disability. Rs 1 lakh is provided for partial disability. PM Jeevan Jyoti Bima Yojana:  It is a life insurance scheme provided to the eligible citizens. The scheme is available to the citizens in the age group of 18-50 years. It provides a life cover of Rs 2 lakhs at an annual insurance premium of Rs 330. Atal Pension Scheme:  It is a social security scheme providing contributory pension cover to eligible citizens. The scheme is available to the citizens in the age group of 18-40 years. It provides a guaranteed monthly pension at the age of 60 years to a person contributing a definite amount. The scheme is administered by Pension Fund Regulatory and Development Authority (PFRDA).

Context

• Union Budget 2022-23 aspires to create a virtuous cycle of growth and development by investing in infrastructure development. The aim is to enhance ‘ease of living’ by development of infrastructure and creation of economic opportunities. Growth in the economy would further lead to the availability of funds for socio-economic development.

Efforts to improve Infrastructure in India

• Physical Infrastructure: It includes roads, railways, airways, shipping, energy infrastructure etc. The government has already increased allocations to the aforementioned sectors in pursuit of its aim of making India a $5 trillion economy by 2024. Physical infrastructure is required to let businesses perform at their full potential, along with improving the quality of life.

• National Infrastructure Pipeline (NIP): It is a government initiative to build world-class infrastructure in the country. The project envisages an investment of about Rs 111 Lakh Crore from FY 2019 to 2025 to improve the infrastructure and provide a better standard of life to the citizens.
• PM GatiShakti Programme (link to article on Union Budget 2022-23): It is a National Master Plan to improve infrastructure in India. The Plan brings together 16 ministries, including Roadways and Railways, for integrated planning and better coordination in building connectivity projects across the country.

• Connectivity Projects: To improve connectivity between different regions and promote balanced regional growth, the government has been focusing on the construction of national highways and roads across the country. In fact, the pace of highway development has seen a constant increase with construction of 13,327 kms in 2020-21, as compared to 10,237 kms in 2019-20, as per the media reports.

• Bharatmala Pariyojana: It is an umbrella programme of the government of India to bridge critical infrastructure gaps in the country. It envisages creation of elevated road and freight corridors and construction of ring roads and bypasses to decongest the main part of the cities.
• Green Highway Policy: This is a programme of the Ministry of Road Transport and Highways. It promotes the development of green corridors along National Highways in order to attain sustainable development of Road infrastructure in the country. As per the policy, 1% of the total project cost of highway projects would be kept aside for the plantation of plants along the highways and their maintenance.

• Digital Infrastructure: The government has also invested heavily in the digital infrastructure under the Digital India Mission to increase access to internet in the remote areas, along with ensuring faster connectivity in the already connected urban areas. COVID-induced Lockdowns have also hastened the spread of internet connectivity to all corners of the country.

• BharatNet: It seeks to enhance digital connectivity in the rural areas by providing Broadband connectivity to the 2.5 Lakh Gram Panchayats in the country. It implements the National Optic Fibre Network Project (NOFN) with an aim to provide e-governance services in the rural areas.

• Financial Infrastructure: Enhancing financial inclusion has been one of the most important and early interventions of the present dispensation in the country. Under this, the government has taken steps to increase access to formal banking institutions, in the form of PM Jan Dhan Yojana (see inset) and provision of social support in the form of PM Suraksha Bima Yojana, PM Jeevan Jyoti Bima Yojana and Atal Pension Scheme (see inset).

• United Payment Interface (UPI): Under its commitment to decreasing the prevalence of cash in the country, the government, through National Payment Corporation of India (NPCI), has come up with UPI. It connects the whole financial system including banks, wallets and other financial systems, under a single financial system and facilitates ease of payments.

Benefits of Infrastructure Creation

• Multiplier Effect on Economic Growth: Investment in the creation of infrastructure leads to an increase in the productivity of industry. This leads to increase in economic growth and enhances the availability of funds in the Economy, as mentioned above. It further leads to improvement in the quality of the infrastructure, thus, creating a virtuous cycle.
• Employment Generation: Creation of infrastructure requires an uninterrupted labour supply, along with the supply of construction material like cement, iron etc. Therefore, it leads to employment generation in the economy. At the same time, even after the infrastructure has been created, it increases the production in the economy, requiring more supply of both skilled and unskilled labour.
• Increase in Investment: Similarly, when there is a growth in the economy, wages and salaries increase leading to an increase in the disposable income. This creates a demand for goods and services, thus incentivizing expansion of the industrial capacity. This leads to an increase in investment in the Economy by business.
• Reduction in Logistics Cost: India does not perform well in the Logistics Performance Index, falling from 35^th rank in 2016 to 44^th in 2018. This means that the supply of goods is not handled efficiently at the borders and leads to delays, along with a lack of transparency in the movement of goods. At the same time, logistics costs impose a cost of 14% of the GDP, as compared to almost 8-10% in the other developing countries.

• Effect of Improvement in Infrastructure: To improve logistics efficiency, the country needs to invest in customs infrastructure at the borders, along with improving tracking services and decreasing the turnaround time of cargo. This is critical to ensure competitiveness of Indian exports in the international markets.

• Improvement in Competitiveness of Industry: As mentioned above, an investment in infrastructure leads to a surge in the demand for domestic goods and services in the international market. This leads to the earning of precious foreign exchange and strengthens the domestic currency. The earned forex is also useful to pay for the international goods and services bought by Indians from the international market.

• World Competitiveness Index: Currently, India is ranked 43^rd out of 63 countries on the World Competitiveness Index, which is compiled by the Institute for Management Development (IMD). The poor ranking of India has been attributed to traditional weaknesses like poor infrastructure, apart from insufficient education investment.

• Enhancement in Tax Revenues: Again, faster growth leads to more production in the economy. This, in turn, leads to an increase in the revenue generation for the government. This revenue stream can be further utilized in improving the infrastructure, thus creating a virtuous cycle of growth, as mentioned earlier.
• Improvement in Ease of Living: Better infrastructure leads to better and faster connectivity, apart from the use of energy as a facilitator for more efficient work and personal life. Therefore, a better infrastructure creates avenues for a better standard of life.

Conclusion

• India is poised for a great leap in economic growth in the coming century. However, it is critical to address impediments like lack of infrastructure for the economy to achieve its full potential. This will address the issues of employment generation and demand-supply mismatch in the country.
• At the same time, it is imperative that digital infrastructure and financial infrastructure are strengthened to grab the opportunities being created in the sunrise sectors based on technology. This will allow India to hitch its bandwagon onto the global engine of growth, thereby fastening socio-economic development.

UPSC Previous Year Questions

• Explain how private public partnership agreements, in longer gestation infrastructure projects, can transfer unsuitable liabilities to the future. What arrangements need to be put in place to ensure that successive generations’ capacities are not compromised? (GS3 - 2014)
• Adaptation of PPP model for infrastructure development of the country has not been free from criticism. Critically discuss the pros and cons of the model. (GS3 - 2013)

Mains Practice Questions

• Discuss the various initiatives taken by the Indian government to address the issue of critical infrastructure gaps in the country. Also, enumerate the advantages accruing to the economy due to augmentation of infrastructure in the country.

Topics covered from the Syllabus:

GS-3: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment. GS-3: Government Budgeting.

 

Relevant Government Schemes

PM Gram Sadak Yojana: It was launched by the Government of India to address the issue of rural connectivity in the country. The scheme was launched in 2000 to provide all-weather access to eligible unconnected habitations. It is a Centrally Sponsored Scheme. Scheme for Special Assistance to States for Capital Expenditure: It is a scheme launched by the Ministry of Finance to support the states in their fight against the pandemic and recovery from the economic slowdown. The scheme provides 50 year, interest free loans for capital expenditure to the states.

What is Multiplier Effect?

• Context: Recently, the Finance Minister has stressed upon the need to increase capital expenditure by both public sector as well as private sector, in order to improve the economic growth and invigorate demand in the country.
• Multiplier Effect: As per the various studies, capital expenditure has a multiplier effect of 2.45 in the short term and 4.8 in the long term. This means that a single rupee spent on capital expenditure has the potential to add Rs 2.45 in the short term and Rs 4.8 in the long term to the overall economy.
• Amount of Capital Expenditure: The budget for 2022-23 has proposed a hike of 24.47% in capital expenditure, amounting to almost Rs 7.5 Lakh Crore. If grants in aid for the creation of capital assets (including MGNREGA assets) are included in the capital expenditure, the effective capital expenditure increases to Rs 10.68 Lakh Crore. This is 27% more than the capital expenditure of Rs 8.4 Lakh Crore in 2021-22.
• Similar Provisions in the Budget: Due to Corona-induced economic slowdown, the Union government has relaxed various provisions related to expenditure. For e.g. the Borrowing limit for the states has been enhanced to 4% of the Gross State Domestic Product (GSDP).  The government has allowed Rs 2 Lakh Crore for States and Autonomous bodies for capital expenditure.

Need for Increase in Capital Expenditure

• COVID-induced Lockdown: As mentioned above, COVID-induced lockdown has resulted in closure of industries for an extended period of time. Therefore, there is a need to crowd-in private investment through direct investment and signaling through favorable policy interventions by the government in the Economy.
• Shortfall in Tax Revenues: COVID has led to a decrease in the realization of tax revenues due to a fall in demand as well as temporary closure of industries. This can be countered by sustained investment by the government, providing the necessary boost to animal spirits within the Economy.

• Benefits of Capital Expenditure: Capital Expenditure has various effects on the Economy of a country including creating capacity and increasing supply, increasing employment generation and rise in wages, in turn, stimulating demand for the goods and services and attracting FDI. At the same time, government expenditure creates a crowd-in effect for the private investment.
• Usage of Funds: The increased allocations would be available for investment in PM Gati Shakti Plan and its associated initiatives. The funds can also be used for supplementary funding in projects like PM Gram Sadak Yojana (see inset).
• Reform-Oriented Scheme: The funds under the ‘Scheme for Special Assistance to States for Capital Expenditure’ (see inset) will also be used to encourage the government to undertake reforms for increasing the development in the States. The associated sectors include digitization of the Economy, including digital payments, and reform in areas like town planning, transit oriented development, building bylaws and transferable development rights.

Conclusion

• The pandemic has caused a huge loss to Indian economy due to the temporary lockdowns and fall in demand. However, we are witnessing a V-shaped recovery (as mentioned in the Economic Survey). It is important to ensure continued support by the government for the economy to recover and achieve its full potential.

UPSC Previous Year Questions

• The public expenditure management is a challenge to the government of India in the context of budget-making during the post-liberalization period. Clarify it. (GS3 – 2019)
• What is meaning of the term tax-expenditure? Taking housing sector as an example, discuss how it influences budgetary policies of the government. (GS3 – 2013)
• Explain the meaning of investment in an economy in terms of capital formation. Discuss the factors to be considered while designing a concession agreement between a public entity and a private entity. (GS3 – 2020)

Mains Practice Questions

• What do you mean by multiplier effect with reference to Indian Economy? Discuss the effect of increase in capital expenditure by the government.

 

Topics covered from the Syllabus:

GS-3: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment. GS-3: Inclusive growth and issues arising from it. GS-3: Government Budgeting.

 

Prelims Facts

National Clean Air Programme 2019: It has been launched by the Government of India in order to decrease the PM 2.5 pollution levels across 122 cities in the country. It has been launched by the Ministry of Environment, Forest and Climate Change. The programme aims to decrease the Particulate Matter Concentrations by 20% to 30% by 2024, keeping 2017 as the base year. Blockchain Technology: It refers to an online ledger which records the transactions performed by users in an encrypted manner. The technology has been used to create cryptocurrencies like bitcoin, litecoin, ethereum etc. Central banks around the world have also started to contemplate the use of bitcoin technology in issuing digital currency. Such currency is referred to as Central Bank Digital Currency (CBDC). CBDC is already in use in Nigeria and 8 Caribbean Countries. Pilot projects have been started in 14 countries including China and South Korea. Also, almost 87 countries are exploring the possibility of launching CBDC.

Banking and Digital Currency

• Growth of Digital Financial Transactions: Both demonetization as well as COVID-induced Lockdown and social distancing norms have led to an increase in digital transactions across the country. This is also manifested in the RBI’s Digital Payments Index (RBI-DPI), which has touched a high of 304.06 in Sep 2021 from just 173.49 in Sep 2019.

• Digital Payments Index (DPI): It is an index released by the Reserve Bank of India to capture the extent of digitization of payments in the country. It has 5 broad parameters viz. Payment Enablers, Payment Infrastructure – Demand side Factors, Payment Infrastructure – Supply side Factors, Payment Performance and Consumer Centricity.

• Support to Digital Payments: Union Budget 2022-23 continues the Special Incentive Scheme for boosting of digital transactions. It encourages transactions upto Rs 2000 via BHIM UPI by incentivizing certain banks. Such banks are given a percentage for transactions made via RuPay Debit cards and UPI.
• Digital Banking Unit: To accelerate financial inclusion of rural areas, Digital Banking Units have been set up in 75 districts through the Scheduled Commercial Banks (SCBs). DBUs will facilitate taking all banking activities online. It has been envisaged to limit paperwork in banking like the use of cheques, demand drafts, pay-in slips etc.
• Banking in Post Office: The government has been able to leverage the huge network of post offices in the rural areas by providing full-fledged banking services through them. As per the government data, there are 1.56 Lakh post offices in the country, out of which 1.41 Lakh are located in the rural areas. Therefore, providing services through the post offices can give a huge boost to financial inclusion in the rural areas.

• Small Savings: At the same time, post office banks also have the added advantage of being provider of small saving schemes like National Savings Certificate (NSC), Kisan Vikas Patra (KVP), Monthly Income Scheme (MIS), Sukanya Samriddhi Yojana (SSY) etc. There is a need to take these facilities online, thereby, freeing up the resources for banking activities.

• Central Bank Digital Currency: On the lines of Bitcoin and other cryptocurrencies, the government has proposed to use the Blockchain technology (see inset) for issuing its own Central Bank Digital Currency (CBDC). Early reports indicate that CBDC will be issued in two forms, viz. CBDC-W for wholesale transactions and CBDC-R for retail transactions.
• Taxation of Virtual Digital Assets: In the budget, cryptocurrencies have been termed as Virtual Digital Assets (VDAs). The government has proposed to tax the income of all VDAs at the rate of 30%. Also, all transactions involving VDAs will be taxed at 1% with Tax Deduction at Source (TDS). Despite these proposals, VDAs have not been accorded the status of legal tender in the country.

• Regulation of VDAs: There is a need to protect the innocent investors from the dubious schemes, with a promise of quicker and higher returns. Despite the popularity of cryptocurrencies, there is an inherent risk due to the unknown origins and lack of centralized control. Discussions on the regulation of cryptocurrencies are currently underway in India.

 

 

 

Modern and Profitable Agriculture

Relevant Government Schemes

PM-KISAN: To stem agriculture distress, the government has initiated direct transfer of cash to the farmers under PM Kisan Samman Nidhi (PM-KISAN). The scheme was started in 2018 and is a Central Sector Scheme with 100% funding from the Government of India. The scheme provides for Rs 6000 per year in three equal instalments to all land holding farmer families in the country. Bhartiya Prakritik Krishi Padhatti Programme (BPKP): The programme has been envisaged to introduce eco-friendly practices in agriculture. It encourages the use of natural farming to restore soil fertility and soil organic matter in the fields. This will help in making agriculture climate-friendly, sustainable and cost-effective.

• Importance of Agriculture: Agriculture sector is the largest employer in the Indian economy. In 2021-22, it contributed almost 18.8% to the Gross Value Added (GVA) of India. The growth rate of the sector has increased from 3.6% in 2020-21 to 3.9% in 2021-22. In recognition of its importance in the economy of India, the Union Budget 2022-23 raised allocation to the Ministry of Agriculture and Farmers Welfare by 4.5% to Rs 1.32 Lakh Crore.
• Impact of COVID: Agriculture was the only sector which did not record a decline due to the COVID-induced lockdown. In fact, agriculture sector has been at the forefront of post-pandemic economic recovery.
• Minimum Support Price: Currently, MSPs are fixed for 22 crops including 14 kharif crops, 6 rabi crops and 2 commercial crops. The food grains procured via MSP are used for supplying monthly ration to almost 80 crore beneficiaries under the National Food Security Act. As per the Union Budget 2022-23, the government will pay Rs 2.37 Lakh Crore in direct payment in lieu of Minimum Support Price to paddy and wheat farmers.
• Agricultural Credit: To make agriculture technology-intensive and more efficient, the government has raised the target of agricultural credit to Rs 18 lakh crore for 2022-23 from Rs 16.5 lakh crore in the last year. Also, 2.7 crore Kisan Credit Cards (KCC) have been already issued to the farmers, while 14 lakh fresh KCCs have been sanctioned for the animal husbandry and dairy farmers.
• Technology in Agriculture: The government has launched ‘Digital Sky Platform’ for using drones in the improvement of agriculture. Drones or Unmanned Aerial Vehicles (UAVs) are used for crop assessment, soil analysis, digitization of land records and related tasks. It has already been established that the information gathered from such projects helps the farmers to make informed choice regarding the suitability of crops for a particular field.

• Financial Support: It has been realized that the technology interventions are imagined but are not translated at the ground level due to lack of funding. Therefore, the government has allowed a 100% subsidy up to Rs 10 Lakh for the purchase of drones by Indian Council of Agricultural Research (ICAR), Krishi Vigyan Kendras (KVKs) and State Agricultural Universities.

• Capacity Building: The government has also initiated the process of revision of curriculum in state agricultural universities to make the students pursuing higher studies stay abreast of the latest developments in the field. In the process, Agriculture Skill Council of India is helping in development of skills related to agriculture and allied sectors.
• River Interlinking Project: The government has allocated an amount of Rs 44,600 Crore for the Ken-Betwa Link Project. The project has various benefits like increase in the net irrigated area in the drought prone Bundelkhand region, supply of drinking water and hydro and solar energy generation.

• Upcoming Projects: Further, draft Detailed Project Reports of Damanganga-Pinjal, Par-Tapi-Narmada, Godavari-Krishna, Krishna-Pennar and Pennar-Cauvery have been finalized and will be implemented after discussion with the beneficiary states.

Initiatives for Rural Women

• Deendayal Antyodaya Yojana: National Rural Livelihoods Mission (DAY-NRLM): It is a centrally sponsored scheme launched in 2011 with an aim to provide livelihood opportunities to rural poor household. The scheme organizes 10-15 poor households into Self Help Groups (SHGs). These SHGs are given collective loans and technical and marketing support to start their own businesses.

• Outreach: The scheme has so far mobilized 8.09 Crore rural women by forming almost 74 Lakh SHGs. It aims to reach 9-10 Crore rural poor households by 2023-24.
• Institution Building: The scheme provides training to the members of SHGs and organized them into various levels to ensure coordination and adequate support. For e.g. SHGs in a village are organized into Village Organizations (VOs). A group of 10-15 VOs are further organized into Cluster Level Forums (CLFs). Currently, almost 4.28 Lakh VOs and 32,899 CLFs are functional under the mission.
• Financial Support: The SHGs are provided collateral free credit through Bank-SHG Linkage. This funding is provided in the form of Revolving Fund (RF) and Community Investment Fund (CIF). The volume of Bank credit leveraged by SHGs amounts to almost Rs 4.6 Lakh Crore till Dec 2021. They are also eligible for interest subvention of 3% on timely repayment of the credit.

• Increase in Credit Limit: To their credit, NPA ratio of SHG stands at a mere 2.34%. In recognition of their stellar performance, the government of India has increased the allowed credit per SHG from Rs 10 Lakhs to Rs 20 Lakhs.
• Financial Literacy: The mission also provides training in financial literacy to the members of SHGs to ensure the use of latest technologies and promotion of financial inclusion.

• Mahila Kisan Sashakitkaran Pariyojana (MKSP): It is a sub-component of DAY-NRLM, which was initiated to enhance the participation of women farmers in both farm and non-farm activities. The scheme seeks to enhance farm productivity, provides managerial training, ensure food and nutrition security and encourage sustainability in agriculture.
• Start-up Village Enrepreneurship Programme (SVEP): SVEP is also a sub-component of DAY-NRLM to promote start-up culture at the level of villages. It creates an ecosystem at the level of villages to provide business support services like hand-holding, seed fund, capacity building, mentorship, training and marketing support for small business in rural areas.
• Aajeevika Grameen Express Yojana (AGEY): It is a sub-scheme to provide safe and affordable transport to the people in rural areas. The transport services are deployed by the SHGs. They have a twin benefit in providing livelihood opportunities to the SHG members, along with promoting connectivity to remote village areas.
• Business Correspondent Sakhi (BC Sakhi): In order to promote women empowerment and financial literacy among the rural poor women, 68,000 women have been identified to work as BC Sakhis. They will be trained and deployed as BC Sakhis to provide last-mile digital financial services, including credit, deposit, pension, scholarships and remittance services.

Employment and Human Resources

• Demographic Dividend: India is a young country with 62% of the population falling in the working age group and almost 1 Crore job aspirants being added every year. The average age of the country is hardly 28 years. This is called demographic surplus. If properly utilized, this can create a demographic dividend for India and help the country achieve its goal of becoming a $5 trillion economy by 2024.

• Demographic Disaster: To satisfy the aspirations of youth, there is a need to create almost 9 Crore non-agricultural jobs in the next decade. If this is not done, energy of the youth will be diverted towards illicit activities, creating a demographic disaster for India.

• Sunrise Sectors: It is an umbrella term used for sectors which are currently in their infancy, but have shown potential for rapid growth in the future. Advanced technology based sectors like AI, Machine Learning, Data Science, Robotics, 3D Printing, Block chain Technology, Quantum Computing can be classified as sunrise sectors.

• Employment Potential: These sectors hold immense potential for generating employment in the country. At the same time, they require highly skilled professionals, who, in turn are highly sought after and are adequately compensated as per the industry standards. The only catch in these sectors is that they require frequently updating the skill-set.

• National Skill Qualifications Framework (NSQF): It is competency based framework with multiple levels which lets an individual acquire the desired skills. The framework is useful in its dynamic linkage with the industry. It is kept updated as per industry demand, and fulfills the gap between the outdated curriculum being followed in higher education and skills required by the industry.
• Effect of COVID: COVID-induced Lockdown has led to a shift in pattern of work as the companies have started to prefer remote work and work from home, thereby saving energy and rental costs. The potential of remote work needs to be harnessed by the job seekers to find highly remunerative jobs globally, which do not require physical presence and are truly situated in the virtual world.

• Digital India Initiative: In a scenario where there is a global availability of skills and the opportunity is democratized, initiatives like Digital India Initiative are set to give rich dividends to the people of the country. Digital India Initiative was launched to digitally skill the workforce and empower the citizens by bridging the rural-urban divide.
• Digital Ecosystem for Skilling and Livelihood (DESH-Stack e-portal): The portal seeks to provide online training to citizens with an aim to skill, reskill and upskill them. It will also facilitate job search and job matching as per the skill requirement, apart from facilitating online payments.

• Other Digital Initiatives: The government has taken various initiatives like Udyam (a self-declaration portal for entrepreneurs), e-SHRAM (a centralized database of unorganized workers), ASEEM (a portal to connect skilled workforce with the market demand) to facilitate ease of employment search and promote entrepreneurship in the country.
• Future Requirement: It is imperative to understand that the foreseeable future holds immense potential for the individuals having right mix of skill sets along with the problem-solving skills and innovative bent of mind. An individual having emotional intelligence, creativity, leadership skills and learning agility would be able to advance faster than others in such an environment.

• Personalized, self-directed Learning: The need of the hour is to do away with traditional educational systems focused on outdated curriculum and rote learning skills. Instead, the education system needs to promote critical thinking, communication skills and collaborative skills for in-depth acquisition and absorption of the relevant knowledge.

Green Economy

• Increase in Allocation: The budget allocation of the Ministry of Environment, Forest and Climate Change (MoEFCC) has been increased by 5.6% to Rs 3030 Crore. Also, the Finance Minister classified green economy as a sunrise sector, signaling the intention of the Government to accord priority to the environment and conservation of wildlife.
• Circular Economy: Circular economy refers to utilization of the obsolete components or the waste material as a raw material for the production of new goods, thereby minimizing wastage. The Government of India has encouraged promotion of circular economy by promoting reusing and recycling of materials.
• Boost to Electric Vehicles: The problem of Electric Mobility has centered around the anxiety associated with lack of charging infrastructure on the highways of the country. The government has announced initiatives to strengthen the charging infrastructure by providing for a battery swapping policy for the electric vehicles. EVs are an important component of the Government of India’s plans for decreasing the carbon emissions.
• Ethanol Blending: The budget promotes ethanol blending by providing for an additional differential excise duty of Rs 2 per liter on unblended fuel. The plan is to increase blending from 8% currently to 20% by the year 2025. However, the states have complained of uneven availability of ethanol for blending across the different regions of the country.
• Stubble Burning: The budget also includes the provision to co-fire biomass pellets in the thermal power plants to incentivize the farmers to avoid stubble burning in their fields. This will decrease the carbon emissions by 38 MMT every year and would be helpful in decreasing the air pollution in the northern states.
• Other Steps: The government also announced initiatives to promote coal gasification by establishing 4 pilot projects, apart from promoting agroforestry and private forestry across the country. Similarly, there has been a renewed focus on strengthening the Energy Conservation Building Code (ECBC) to enhance energy efficiency and savings.
• Areas of Improvement: There is a need to review and modify the National Clean Air Programme 2019 (see inset), which has not led to any substantial decrease in pollution levels in the targeted areas despite 3 years of launch. At the same time, the states need to ensure adequate expenditure for interventions in the area of air pollution.

• Strengthening the Regulation Agencies: There is a need to increase allocations for the regulating agencies, apart from providing them more powers, in order to strengthen the regulatory system governing pollution in the country. For e.g., the allocations to Central Pollution Control Board (CPCB) have stagnated at Rs 100 Crore for the last four years.
• Loss of Forest Cover: At the same time, the India Forest Survey Report 2021 shows that India has lost almost 1600 sq kms of natural forests. Although the report says that this loss has been compensated by an increase in plantations and the quality of cover in some protected areas and reserve forests, but this is a cause of concern given the difference between natural forests and plantations.

Conclusion

• Union budget has been criticized by the opposition benches as lacking in imagination. At the same time, ruling dispensation has called it a balanced budget. Irrespective of both the views, the budget has tried to cope up with the economic slowdown in the post-pandemic world with a slew of measures. There is a need to complement such measures with round the year, timely steps to aid the economic recovery.

UPSC Previous Year Questions

• One of the intended objectives of Union Budget 2017-18 is to ‘transform, energize and clean India’. Analyse the measures proposed in the Budget 2017-18 to achieve the objective. (GS3 - 2017)
• Pradhan Mantri Jan-Dhan Yojana (PMJDY) is necessary for bringing unbanked to the institutional finance fold. Do you agree with this for financial inclusion of the poorer section of the Indian society? Give arguments to justify your opinion. (GS3 - 2016)
• COVID-19 pandemic has caused unprecedented devastation worldwide. However, technological advancements are being availed readily to win over the crisis. Give an account of how technology was sought to aid management to the pandemic. (GS3 - 2020)
• What are the major factors responsible for making rice-wheat system a success? In spite of this success how has this system become bane in India? (GS3 - 2020)
• What are the main constraints in transport and marketing of agricultural produce in India? (GS3 - 2020)
• How can the ‘Digital India’ programme help farmers to improve farm productivity and income? What steps has the Government taken in this regards? (GS3 - 2015)
• Comment on the challenges for inclusive growth which include careless and useless manpower in the Indian context. Suggest measures to be taken for facing these challenges. (GS3 - 2016)
• The nature of economic growth in India in described as jobless growth. Do you agree with this view? Give arguments in favour of your answer. (GS3 - 2015)
• While we found India’s demographic dividend, we ignore the dropping rates of employability. What are we missing while doing so? Where will the jobs that India desperately needs come from? Explain. (GS3 - 2014)
• Women empowerment in India needs gender budgeting. What are the requirements and status of gender budgeting in the Indian context? (GS3 - 2016)
• What are the continued challenges for women in India against time and space? (GS3 - 2019)
• Discuss the various economic and socio-cultural forces that are driving increasing feminization of agriculture in India. (GS3 - 2014)
• What are the key features of the National Clean Air Programme (NCAP) initiated by the Government of India? (GS3 - 2020)

Mains Practice Questions

• What are Virtual Digital Assets? Do you think the continued ambiguity regarding cryptocurrencies in India is causing a concern among investors keen to invest in digital assets in the country?
• What are the demands of farmers in the country? Discuss, in light of the repeal of agricultural bills by the government of India due to farmers’ protests.
• Enumerate the salient features of Deendayal Antyodaya Yojana – National Rural Livelihoods Mission. Discuss the impact of the creation of Self Help Groups in the rural areas.
• Discuss the steps taken in the Union Budget to address the issues pertaining to employment generation in the country.
• ‘India’s nationally determined contributions (NDCs) as enumerated in the Paris Climate Deal is only the culmination of a long history of its spiritual oneness with the environment and forest.’ Critically analyze.