1. Centre sets up MSP panel
Tags: National Economy/Finance
On July 18, the Centre constituted a committee under the chairmanship of former Union Agriculture Secretary Sanjay Agarwal to look into the issues of Minimum Support Price (MSP) promised to the United Kisan Morcha (SKM) in January 2022.
Important facts
The government has made a provision to include three members from the United Kisan Morcha (SKM) in the committee, but the agriculture organization is yet to announce any names to be part of the panel.
Under the umbrella of the United Kisan Morcha, thousands of farmers had agitated on the borders of Delhi for almost a year and forced the government to withdraw farm laws.
Announcing the repeal of three agriculture laws in November last year, Prime Minister Narendra Modi had promised to set up a committee to discuss farmers' demand for a legal guarantee on MSP.
Who will be part of the panel?
Niti Aayog member Ramesh Chand
Agri-economists CSC Shekhar from Indian Institute of Economic Development
Sukhpal Singh from IIM- Ahmedabad
Senior member of Commission for Agricultural Costs and Prices (CACP) Naveen P Singh
Farmer representatives of the panel
National award-winning farmer Bharat Bhushan Tyagi
Three members from SKM
Five members - from other farmer organisations include Gunwant Patil, Krishnaveer Choudhary, Pramod Kumar Choudhary, Guni Prakash and Sayyed Pasha Patel.
Kisan Sahakari and two members of the group include IFFCO Chairman Dilip Sanghani and CNRI General Secretary Binod Anand will also be part of the committee.
Senior members from agricultural universities, five central government secretaries and chief secretaries of Karnataka, Andhra Pradesh, Sikkim and Odisha will also be part of the committee.
What will the panel do?
Will suggest measures to make MSP available to farmers by making them effective and transparent.
To give more autonomy to the Commission for Agricultural Costs & Prices (CACP).
Strategise to turn Krishi Vigyan Kendras and other research institutes into knowledge centres for natural farming.
Suggesting setting up of laboratory chain for organic certification
To suggest a system that ensures remunerative prices to farmers for the sale of the new crop.
Mapping of existing cropping patterns of producer and consumer states.
What is Minimum Support Price (MSP)?
MSP is the rate at which the government buys food grains from farmers.
This is based on the calculation of at least one and a half times the cost of production incurred by the farmers.
The Government of India fixes the MSP for 24 items twice a year.
When the market price falls below the declared MSP, the government buys food grains from the farmers at the MSP rate.
2. Only 50% farmers benefited from farm loan waivers - SBI
Tags: Economy/Finance
According to a study by the State Bank of India, only half of the intended beneficiaries of farm loan waivers announced by nine states since 2014 have actually received loan waivers.
Important facts
The worst implementation of farm loan waiver schemes till March 2022 was in Telangana (5%), Madhya Pradesh (12%), Jharkhand (13%), Punjab (24%), Karnataka (38%) and Uttar Pradesh (52%).
In contrast, farm loan waivers implemented by Chhattisgarh in 2018 and Maharashtra in 2020 were received by 100% and 91% of eligible farmers, respectively.
Since 2014, out of about 3.7 crore eligible farmers, only about 50% farmers have received the loan waiver amount by March 2022.
Major findings of the study
The study is based on the primary data of SBI agri-portfolio across states.
It analyzes the change in the income of farmers in the last five years.
The study noted that the increase in income of farmers engaged in cash crops has been higher than those growing non-cash crops.
Along with agricultural income, most states saw a significant increase of 1.4-1.8 times in allied/non-farm income over the same period.
The average farmer's income grew 1.3 to 1.7 times between FY 2018 and 2022.
In some crops like soybean in Maharashtra and cotton in Karnataka, farmers' income has doubled during this period.
The Kisan Credit Card (KCC) scheme should be tweaked to make it a Livelihood Credit Card (LCC).
Self-Help Groups have around 10 per cent NPA across India.
Reasons for less reach to farm loan waiver
The following three factors have been identified in the report as possible reasons for the low implementation rate of loan waivers -
Rejection of farmers’ claims by State Governments
Limited or low fiscal space to meet promises
Change in Governments in subsequent years
3. 5% GST on packaged curd, paneer and flour
Tags: Economy/Finance
With the implementation of the GST Council's decision, customers will have to pay 5% GST on pre-packaged, labelled food items like flour, paneer and curd, as well as hospital rooms renting more than Rs 5,000 from July 18.
Important facts
Earlier, GST was applicable only on branded packaged rice, but after the implementation of the new rates, all types of rice (branded and unbranded) and flour (branded and unbranded) would attract GST.
The government has decided to levy 5% GST on hospital rooms with ICU not exceeding Rs 5000.
Along with this, now 12 percent GST will be applicable for taking a room in the hotel for less than Rs 1000. Earlier both were kept out of the purview of GST.
GST will be imposed on these things for the first time
Curd, Lassi, Buttermilk (5%)
Cheese (5%)
All Kinds of Jaggery (5%)
Khandsari sugar (5%)
Honey (5% GST)
Rice, rye, barley, oats (5%)
Flour (5%)
Coconut water (12%)
Rice Flour (5%)
GST rate levied on other goods and services
Solar water heater (12%)
Printing, writing or drawing ink, knives with cutting blades, paper knives and pencil sharpeners, LED lamps - 18%
Some services such as work contracts for roads, bridges, railways, metro, effluent treatment plants and crematoriums - 18%
Bio-medical waste treatment facilities - 12%
Reduction or exemption in GST
Trucks, freight movement where fuel cost is included, will now attract 12% GST instead of 18%.
The exemption in GST on the transportation of passengers to and from the northeastern states and Bagdogra will be limited to only economy class.
Any person can claim GST exemption only for training or coaching in recreational activities related to art or culture or sports.
Electric vehicles, whether or not fitted with a battery pack, will be eligible for a concessional GST rate of 5%.
4. Agriculture Minister launches eNAM Platform of Platforms (PoP)
Tags: Economy/Finance
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Recently the Union Minister of Agriculture and Farmers Welfare launched the Platform of Platforms (PoP) under the National Agriculture Market (e-NAM) on the lines of the State Agriculture and Horticulture Ministers' Conference in Bangalore, Karnataka.
Platform of Platforms (POP)
e-NAM integrates a platform of service providers as a "Platform of Platforms", which includes
1. Holistic Service Providers (Service providers that provide comprehensive services for the trading of agricultural produce, including services related to quality testing, trading, payment systems and logistics).
2. Logistics Service Provider, Quality Assurance Service Provider, Cleaning, Grading, Sorting & Packaging Service Provider, Warehousing Facility Service Provider, Agricultural Input Service Provider, Technology Enabled Finance & Insurance Service Provider.
3. Information dissemination portals (advisory services, crop forecasts, weather updates, capacity building of farmers etc.), other platforms (e-commerce, international agri-business platforms, barter, private market platforms) etc.
Benefits of POP
This will increase the digital access of farmers to multiple markets, buyers, service providers and improve the price discovery mechanism, price realisation and bring transparency in business transactions.
41 service providers from different platforms are covered on POP facilitating various value chain services such as trading, assaying, warehousing, fintech, market information, transportation etc.
The PoP will create a digital ecosystem, which will benefit from the expertise of different platforms in different segments of the agricultural value chain.
The inclusion of various service providers will not only enhance the value of the e-NAM platform but also give the users of the platform options to avail services from different service providers.
It enables farmers, FPOs, traders and other stakeholders to access a wide variety of goods and services across the agricultural value chain through a single window, thereby giving more options to the stakeholders.
About e-NAM Portal
The portal named e-NAM (eNAM) was launched by the central government in April 2016.
National Agriculture Market (eNAM) is a pan-India electronic trading portal that integrates the existing APMC mandis to create a unified national market for agricultural produce.
Small Farmers Agribusiness Association (SFAC) is the lead agency to implement eNAM under the aegis of Ministry of Agriculture and Farmers Welfare, Government of India.
At present, 150 commodities including food grains, oilseeds, fibre, vegetables and fruits are being traded on the e-NAM portal. Also more than 1,005 'Farmer Producer Organisations' are registered on it.
5. Govt issues standard SOP for e-commerce exports of jewellery
Tags: Economy/Finance
The Finance Ministry on 15 July has issued a simplified regulatory framework standard operating procedure (SOP) for e-commerce exports of jewellery through courier mode.
Important facts
The Framework takes into account the need for uniformity of customs proceedings which brings certainty to the trade.
It also addresses a unique requirement of the e-commerce eco-system for re-import up to the prescribed limit in certain cases.
The simplified regulatory framework in the form of Standard Operating Procedure (SOP) has been issued by the Central Board of Indirect Taxes and Customs.
The SOP details the operational, movement and procedural aspects of exports based on electronic declarations through international courier terminals.
The first phase has been started with exports through Bengaluru, Delhi and Mumbai.
6. Ministry of Defence sets up an Apex Committee for Performance and Efficiency Audit
Tags: Economy/Finance
The Ministry of Defence has set up an institutional mechanism consisting of an Apex Committee with the Defence Secretary as the Chairperson to conduct Performance and Efficiency Audit in various aspects of its activities on 15th July.
Members of the committee
Vice Chiefs of the three Services, Secretary Defence (Finance), Chief of Integrated Staff Committee (CISC), Controller General of Defence Accounts (CGDA), Director General (Acquisition) and other senior officials of Ministry of Defence and Defence Research and Development Organisation (DRDO).
Important facts
This is a major change from the existing transaction-based compliance audit to an outcome-based performance/efficiency audit aimed at increasing overall efficiency.
The broad areas that have been identified for conducting performance and efficiency audits include role and performance of Defense Capital Procurement, Provisioning, Logistics, Inventory Level, Asset Maintenance, Authority Holding Sealed Statement (AHSP) etc.
7. Record surge in India’s imports from China in first half of 2022
Tags: Economy/Finance International News
According to China’s trade figures released on July 13 India’s imports from China reached a record $57.51 billion in the first half of the year.
India-China Bilateral Trade
Chinese goods imports are on record growth this year, and are set to surpass last year's $97.5 billion mark.
The trade imbalance is also heading towards another record. Imports this year are up 34.5% from the same period in 2021.
Two-way trade crossed 100 billion dollars for the first time in 2021 to reach 125.6 billion dollars, of which India's imports were 97.5 billion dollars.
Trade declined in 2020 due to the corona pandemic, but is now well above pre-pandemic levels.
China is the largest trading partner of India.
Major commodities imported from China into India
Electronic equipment, machines, engines, pumps, organic chemicals, fertilizers, iron and steel, plastics, iron or steel products, gems etc.
Major commodities exported from India to China
Cotton, gems, precious metals, coins. copper ores, slag, ash, organic chemicals, salt, sulphur, stone, cement, machines, engines etc.
8. NE region witness more than 85 pc export growth in last six years
Tags: Economy/Finance
The export of agricultural products to the North-East region has increased by more than 85 percent in the last six years.
Important facts
According to the Commerce and Industry Ministry the export has reached over 17 million dollars in 2021-22 from 2.52 million dollar in 2016-17.
The major destinations of exports have been Bangladesh, Bhutan, Middle East, UK and European countries.
There has been a significant increase in the export of agricultural products from the northeastern states like Assam, Nagaland, Manipur, Mizoram, Tripura, Arunachal Pradesh, Sikkim and Meghalaya.
In the last three years, Agricultural and Processed Food Products Development and Authority (APEDA) has conducted 136 capacity building programs on export awareness in different parts of the North Eastern Region.
APEDA organized a conference on Export Potential of Natural, Organic and Geographical Indications (GI) agricultural products in Guwahati on 24 June.
India's North-East region
The North Eastern Region (NER) comprises eight States - Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim and Tripura.
The North Eastern region of India is a landlocked region with no access to the sea.
It is geographically isolated from the rest of India and is connected to the mainland by a narrow strip of land called the Siliguri Corridor (Chicken’s Neck).
Sikkim - the ‘Brother’ of the Seven Sisters
Assam- World’s largest ‘Tea Producer’
Manipur- Jewel of India
Arunachal Pradesh- Land of Rising Sun
Meghalaya- Scotland of India
Tripura- the most ‘Literate’ in the Northeast around 95% Literacy rate
Mizoram- Molasses Basin
Sikkim- Sparsely Populated, the only state having world’s largest ‘Kanchenjunga Mountain’
Nagaland- famous for Mon’s Ethnicity
9. Paper Import Monitoring System will come into effect from 1st October
Tags: Economy/Finance
The Paper Import Monitoring System (PIMS) is being implemented from October 1 this year.
Important facts
The Directorate General of Foreign Trade (DGFT) introduced the Paper Import Monitoring System (PIMS) by making amendments to the import policy of major paper products.
The online facility of registration will be available from 15th July 2022.
Process of registration
Under PIMS, an importer needs to obtain an automatic registration number by paying a registration fee of Rs 500 through the online system.
This registration number will be allotted not later than the 75th day preceding the expected date of arrival of the import consignment and not later than the fifth day preceding the expected date of arrival of the consignment.
This automatic registration number will be valid for a period of 75 days and within the validity period of registration, Bill of Entry (BOE) of miscellaneous consignments will be allowed under the same registration number for the sanctioned quantity.
What are major paper products on which the import system will apply?
The PIMS will apply to imports by a domestic sector unit on a wide range of paper products covering 201 tariff lines, such as newsprint, handmade paper, tissue paper, toilet paper and cartons etc.
Paper products like currency paper, bank bond and check paper, security printing paper etc. have been kept out of the purview of compulsory registration.
Objectives of Paper Import Monitoring System
Ban on dumping of paper products in the domestic market through under-invoicing
Prohibition of entry of prohibited goods by false declaration
Prohibiting the re-transport of goods through other countries in lieu of trade agreements
10. India's retail inflation eases to 7.01 percent in June
Tags: Economy/Finance
Retail inflation based on the Consumer Price Index (CPI) declined to 7.01 per cent in June this year from 7.04 per cent in the previous month.
Important facts
This is mainly on account of marginal reduction in prices of vegetables and pulses, though it still remained above the Reserve Bank's level for the sixth consecutive month.
According to data released by the National Statistical Office (NSO) Consumer Price Index (CPI) based inflation stood at 6.26 per cent in June 2021.
The increase in prices in rural India was faster in the month of June as compared to the urban parts of the country.
CPI-based inflation for rural areas rose marginally to 7.09 per cent in June from 7.08 per cent in May.
Rural inflation was 6.16 per cent in June 2021.
Urban inflation declined to 6.92 per cent in June 2022 from 7.08 per cent in May 2022.
Inflation in the food basket in June 2022 was 7.75 per cent, compared to 7.97 per cent in the previous month.
The inflation figure in vegetables eased to 17.37 percent during June from 18.26 percent in May 2022.
The central bank has been asked to ensure that inflation remains at 4% with a margin of 2% on either side.
What is CPI based inflation or retail inflation?
CPI (Consumer Price Index) monitors retail prices at a certain level for price movement of a particular commodity, goods and services at rural, urban and all India levels.
The change in the price index over a period of time is known as CPI-based inflation, or retail inflation.
CPI formula - (Price of basket in current period / Price of basket in base period) x 100
Kindly see also 14 June 2022 post
