70^th BPSC Mains

Introduction

• Begin with the importance of agriculture in India:
  "Agriculture remains the backbone of India's economy, employing nearly 45% of the workforce yet contributing only around 18% to the GDP."
• Highlight the paradox of a large agrarian base with widespread farmer distress.
• Introduce the linkage between agricultural reforms and farmers’ prosperity.

Body

Historical Context:

• Mention post-independence land reforms (abolition of zamindari, land ceiling).
• Green Revolution: Achievements and regional disparities.
• Need for second-generation reforms.

Dimensions of Agricultural Reforms

• Land and Tenancy Reforms
  • Ensuring land ownership and security for tenants.
  • Digital land records and land leasing laws.
• Market Reforms
  • APMC Act reforms and e-NAM.
  • Role of private mandis and contract farming (with safeguards).
• Credit and Insurance Reforms
  • Kisan Credit Cards, crop insurance (PMFBY).
  • Need for institutional credit over moneylenders.
• Technology and Innovation
  • Precision agriculture, AI, IoT, drone usage.
  • Expanding access to agri-extension services.
• Irrigation and Water Management
  • PM Krishi Sinchayee Yojana, micro-irrigation.
  • Rainwater harvesting, watershed development.
• Storage and Logistics
  • Warehousing, cold chains, agri-infrastructure funds.
  • Reducing post-harvest losses.
• Diversification and Sustainability
  • Moving beyond cereals: horticulture, pulses, animal husbandry.
  • Organic farming and agroecological approaches.

Challenges to Reforms

• Implementation gaps, state-Centre coordination issues.
• Resistance to change due to low awareness.
• Skewed MSP benefits, regional imbalances.
• Farmer protests and trust deficit (e.g., farm laws withdrawal).

Case Studies & Data

• Mention examples like Punjab’s high productivity but water crisis.
• Maharashtra’s success with farmer producer organizations (FPOs).
• NABARD's reports, NSSO data, Economic Survey highlights.

Way Forward

• Focus on inclusive, participatory, and localized reforms.
• Empower FPOs, encourage agro-based rural industries.
• Combine economic reforms with social security measures.
• Ensure reforms are bottom-up, with farmer consultation.

Conclusion

• Emphasize Gandhian vision of village self-reliance, Amartya Sen’s idea of capabilities, or Doubling Farmers’ Income vision.
• End with a hopeful note:
  • The prosperity of farmers is not merely an economic goal but a moral and national imperative."
  • "Sustainable, equitable, and farmer-centric reforms can truly transform Indian agriculture into a pillar of national prosperity."
    
    

2.Fiscal Federalism in India.(700 words)

Introduction

• Begin with a definition of fiscal federalism:
  Fiscal federalism refers to the financial relations between units of governments in a federal setup, i.e., between the Centre and the States in India.
• Use a quote or context to frame the issue:
  "Finance is the lifeblood of governance in a federal state." – K.C. Wheare
• Mention the relevance in contemporary India:
  Ongoing debates over centralization of funds, state autonomy, and fiscal devolution.

Body

Historical Background

• British India and centralized finance.
• Post-Independence: Planning Commission’s role.
• Constitutional provisions: Article 268–293, Seventh Schedule, Finance Commission.
• Important milestones: GST, 14th & 15th Finance Commission, NITI Aayog replacing Planning Commission.

Key Features of Fiscal Federalism in India

• Division of taxing powers (Union List vs State List).
• Role of Finance Commission and NITI Aayog.
• Grants-in-aid, tax devolution formula.
• GST Council as a new cooperative federal mechanism.

Challenges in Fiscal Federalism

• Vertical imbalance (centre’s higher share of revenue vs states’ expenditure responsibilities).
• Horizontal imbalance (uneven development among states).
• GST-related issues: Compensation delays, reduced fiscal autonomy.
• Politicization of fund allocation.
• Reduced role of states in centrally sponsored schemes.
• Strains during crises (e.g., COVID-19, natural disasters).

Key Institutions and Commissions

• Finance Commissions (FC)
  • Set up every five years to recommend sharing of central taxes and grants.
  • 14th Finance Commission (2015–2020):
    • Increased states’ share in central taxes from 32% to 42%.
    • Emphasized fiscal autonomy and cooperative federalism.
  • 15th Finance Commission (2020–2026)
    • Recommended 41% share to states (1% less due to J&K reorganization).
    • Introduced performance-based incentives for states.
• Sarkaria Commission (1983–1988)
  • Emphasized strengthening the Inter-State Council.
  • Suggested greater financial devolution and transparency in grants.
• Punchhi Commission (2007–2010)
  • Suggested fixed tenure and institutional strengthening of Finance Commission.
  • Advocated for a permanent Inter-State Trade and Commerce Commission.
• NITI Aayog
  • Replaced the Planning Commission in 2015.
  • Acts as a platform for cooperative and competitive federalism

Reforms and Suggestions

• Empowering States: Greater revenue-raising powers.
• Strengthening GST Council’s federal character.
• Transparent and rule-based transfers.
• Restructuring Centrally Sponsored Schemes.
• Strengthening local bodies with finance and functions..

Conclusion

• “Cooperative federalism” to “competitive federalism” with fiscal accountability.
• Promoting fiscal discipline without compromising autonomy.
• Technology-led transparency in fund flow (PFMS, DBT, etc.).
• "True federalism is not just about sharing power, but about sharing responsibilities and resources equitably."