Lecture 5 Aditya Sir

Economic
Survey 2017-18
Session 3
Copyright © 2018 by Vision IAS. [www.visionias.in] Economic Survey, Aditya Kalia

Agenda
Volume Volume
1 2
State of the Economy: An Analytical Overview and An Overview of India's Economic performance in
1 1
Outlook for Policy 2017-18
Investment and Saving slowdowns and recoveries: Monetary Management and Financial
3 3
Cross Country insights for India Intermediation
A new, exciting Bird's eye view of Indian Economy

2 Prices and Inflation 4
through GST
Is there a late convergence stall in Economic Sustainable Development, Energy and Climate
5 5
Development? Change
6 Climate, Climate Change and Agriculture Agriculture and Food Management 7


V2- Ch5: Sustainable Development, Energy and Climate
Change

V2- Ch5: Sustainable Development, Energy and Climate Change
Sustainable Development Goals

- Voluntary national review of 7 SDGs
- Baseline data – MoSPI
1 - No Poverty
2 - Zero Hunger
3 - Good Health and Well-Being
5 - Gender Equality
9 - Industry, Innovation and Infrastructure
14 - Life below Water
17 - Partnerships for the Goals
- NITI Aayog’s role – collect, validate, document best practices

Urbanisation and Sustainable Development
SDG 11: “make cities inclusive, safe, resilient and sustainable”
Sustainability of Cities: Urban Problems:
- Social Development - Poverty
- Economic Development - Inadequate provision of urban services
- Environmental Management - Congestion
- Effective Urban Governance - Pollution
- Sizable slum population
- Safety and Security
- Waste Disposal
Steps taken?
- Affordable housing
- Public Transport
Challenges:
Resource requirement – Creation (39LCr), Maintenance
(20LCr)

Access to Sustainable Energy
Linkage with other SDGs- Health, Well-being, Gender parity, poverty, infra,
etc.
Linkage with Gender development
- Clean fuel for cooking Steps taken:
- Ujjawala, Ujjawala Plus
- DDUGJY
- Saubhagya – Out of 18.1 Cr rural households, 78%
electrified.
- Efficiency improvement – Buildings energy
efficiency programme

Shift towards Renewables
Progress
Increased Capacity
Fall in tariffs
New Challenges?
- Renegotiation of PPAs
- Case for revisiting subsidies?

International Solar Alliance
Objective - The Paris Declaration establishing ISA states that the countries share the
collective ambition to undertake innovative and concerted efforts for reducing the cost of
finance and cost of technology for immediate deployment of solar generation assets.
Programmes: 3 main: Two Upcoming:

- Scaling Solar Applications for Agricultural Use - Scaling Solar Rooftops
- Affordable Finance at Scale - Scaling E-Mobility & Storage
- Scaling Solar Mini-grids.
- Developing “Common Risk Mitigating Mechanism” (CRMM) for de-risking and
reducing the financial cost of solar projects.
- establishment of Digital Infopedia which serves as a platform to interact, connect,
communicate and collaborate with one another
- Strategic partnership with UN and its organs, WB, etc.

Climate Change and India – Steps taken
- NAPCC, SAPCC
- 8 Global Technology watch groups in areas of Renewable energy, Advance Coal technology, Enhanced Energy
Efficiency, GreenForest, Sustainable Habitat, Water, Sustainable Agriculture and Manufacturing
- Climate Change Action Programme, launched in 2014 with an objective of building and supporting capacity at
central & state levels, strengthening scientific & analytical capacity for climate change assessment, establishing
appropriate institutional framework and implementing climate related actions
- National Adaptation Fund on Climate Change established in 2015 to support concrete adaptation activities which
are not covered under on-going activities through the schemes of State and Central Government
- Increasing forest and tree cover
- Zero Effect, Zero Defect is a policy initiative to enhance energy efficiency and resources efficiency in Medium &
Small Industries.
- QR Code
- 15th FC
Status of Paris Agreement

Air Pollution in Delhi
the annual average PM 2.5 levels remain about 3 times higher than the prescribed standards

1. Crop residue, biomass burning (26-29 per cent) – Combine harvesters

Steps taken:
- NGT banned crop residue burning in states of Rajasthan, Uttar Pradesh, Haryana and
Punjab.
- In 2014, the Union government had released the National Policy for Management of
Crop Residue, which NGT directed the states to implement. Under this policy each state
needs to have an action plan to stop residue burning by involving people at different
levels—from communities to panchayats to state governments. It also calls for a
mechanism to alert to cases of crop burning.
- Crop residue burning is punishable under the Air (Prevention and Control of Pollution)
Act, 1981.
2. Vehicular emissions (23-28 per cent) and redistributed road dust (20-27 per cent).
3. Massive construction, power plants, industry, other (19-35 per cent)
4. Winter temperature inversion, humidity and (absence of) wind

Suggestions?
Short-Term Emergency Plan (when 24-hourly PM2.5 exceeds 300-400 mg/m3 ): Strict enforcement through heavy penalties on
agricultural waste burning using satellite based tools detecting fires, and mobile based applications in NCR; and incentive
payments to farmers, coordinated across states and NCR.
Medium and Long-Range Actions: Implement congestion pricing for vehicles, expand and improve public buses dramatically to
reduce private vehicle use, and for connectivity to and beyond metro. Phase-out old vehicles, accelerate BS-VI (already notified
and to be commenced from 2020), and expand modernized bus fleets.
Explore the business cases for finding uses for the crop residues- Use technologies to convert agricultural waste into usable
concentrated fodder or bio-fuels, develop and implement business models with private sector and communities and incentivize
shift to non-paddy crops.
Straw management system for rice and wheat farming.
Happy Seeder machine - It is a machine that sows seeds without the need to remove paddy straw and
works well when the straw is spread evenly on the field through the straw management system. The
technological solution has to be combined with the economics of it by further incentivizing by the Centre
and States and implemented through agricultural cooperatives, local bodies etc

V1- Ch7: Climate, Climate Change and Agriculture

Agriculture – The Ironies!
- Price v/s Production

- Employment v/s Productivity
- Concern for the farmer v/s wishing for fewer farmers
Objective of the chapter:

- Changes in RF & Temperature regimes
- Effects on Productivity in agriculture
- Possible future impacts, assuming climate change models
- Policy implications

Agriculture – Performance

Average changes in RF & Temperature

Changes in no. of dry/wet and

hot/cold days


Effect on Productivity
Stark heterogeneity:
- Extreme versus Moderate shocks;
- Irrigated versus Unirrigated Areas
an extreme
temperature shock in
unirrigated areas
reduces yields by 7
percent for kharif and
7.6 percent for rabi

Effect on Productivity
Stark heterogeneity:
- Extreme versus Moderate shocks;
- Irrigated versus Unirrigated Areas
effects of extreme
rainfall shocks are 14.7
percent and 8.6
percent (for kharif and
rabi, respectively) in
unirrigated areas,
much larger than the
effects these shocks
have in irrigated
districts

Effect on Crops
Crops grown in rainfed areas— pulses in both kharif and rabi—are
vulnerable to weather shocks while the cereals—both rice and
wheat—are relatively more immune.
Impact on revenue - Puzzle

In a year where temperatures are 1 degree Celsius
higher farmer incomes would fall by 6.2 percent during
the kharif season and 6 percent during rabi in
unirrigated districts.
In a year when rainfall levels were 100 millimetres less
than average, farmer incomes would fall by 15 percent
during kharif and by 7 percent during the rabi season.

Effect on incomes in the long run?
IPCC predicts that temperatures in India are likely to rise by 3-4
degree Celsius by the end of the 21st century.
Increase in avg temp.
Decrease in avg RF
Increase in extreme
In the absence of any adaptation by farmers and any days
changes in policy (such as irrigation), farm incomes will
be lower by around 12 percent on an average in the
coming years.
Unirrigated areas will be the most severely affected,
with potential losses amounting to 18 percent of annual
revenue

Policy implications – Stark Differences
- Spread of irrigation v/s ground water depletion
Solution – More crop, Per Drop

Policy implications – Stark Differences
Fully irrigating Indian agriculture, that too

against the backdrop of water scarcity and
limited efficiency in existing irrigation
schemes, will be a defining challenge for
the future. Comment
In thinking about agricultural policy

reforms in India, it is vital to make a clear
distinction between starkly different
requirements of agricultural regions.
Discuss.

V2- Ch7: Agriculture and Food Management

Overview of Agriculture Sector – Dynamics of Agri Growth

Overview of Agriculture Sector – Sources of Farmer Income

Overview of Agriculture Sector – Need for reorientation of policies
Feminisation of Agriculture-
Out of total female main workers, 55 per cent were agricultural labourers and 24 per cent were
cultivators.

Overview of Agriculture Sector – Need for reorientation of policies
Feminisation of Agriculture-
Measures to ensure mainstreaming of women in agriculture

Cropping pattern in India
India ranks first, with 179.8 Mha (9.6 percent of the global net cropland area) of net cropland area
Determinants of Cropping pattern:

Effects of a diversified Cropping pattern:
- Agro-climatic condition
- Mitigating risks and price shocks
- Farm Size
- Mitigating production and harvest losses
- Prices
- Improving soil health
- Profitability
- Increasing resilience of crops
- Government policies
- Decreasing variability of output
- Better response to fertilisers
Odisha has least diversification index, Karnataka, Gujarat, Rajasthan have high

Crop Productivity in India
Determinants of productivity – Critical inputs Use of inputs by holdings
- Irrigation
- Seeds
- Fertilisers
- Credit
- Machinary
- Technology
- Extension services

Fertilizers - DBT
Seeds Availability-
Seed Replacement Rate (SSR) or Seed Replacement Ratio is a measure of how much
of the total cropped area was sown with certified seeds in comparison to farm
saved seeds.
Seed Project entitled, “Seed Production in Agricultural
Crops” is being implemented.
During the year 2016-17, total production of quality
seed including all classes was 620743 quintals against
the target of 462404 quintals.

Irrigation
PMKSY
The target is to bring 12 lakh hectare
area under micro-irrigation during
2017-18.
Also being implemented in the mission
mode with the help of Command Area
Development to complete 99 major and
medium irrigation projects

Crop Productivity in India Why is there a need to
increase productivity? How
Mechanisation to do it?
- Use of improved implements has estimated that percentage of agricultural

potential to increase productivity up workers of total work force would drop to 25.7
to 30 per cent and reduce the cost of per cent by 2050 from 58.2 per cent in 2001.
cultivation up to 20 per cent.
- Consolidate the land holdings to reap the
- At present, Indian farmers are benefits of agricultural mechanization.
adapting farm mechanization at a - Need to innovate custom service or a rental
faster rate in comparison to recent model by institutionalization for high cost
past. farm machinery such as combine harvester,
sugarcane harvester, potato combine, paddy
transplanter, laser guided land leveller,
rotavator etc. to reduce the cost of operation.
- Can be adopted by private players or State
or Central Organizations in major
production hubs.
Risk Mitigation – Crop insurance
Reasons for Crop loss Reasons for low penetration
- Inadequate rainfall/ drought was

most reported for all the selected
crops except coconut and urad
- In respect of coconut and urad, the
highest reported single reason for
crop loss during this period was
“disease/insect/animal”.
- The highest average total loss was
reported for cotton (Rs. 43046)
followed by sugarcane (Rs. 42887)
and groundnut (Rs. 28721) during
July 2012-December, 2012.

Risk Mitigation – Crop insurance, Credit sources, Marketing
PMFSBY
- Pradhan Mantri Fasal Bima Yojana During 2016-17, the target of 30 percent of the Gross
(PMFBY) components: Cropped Area (GCA) in the country for PMFBY has
- • Uniform premium to be paid by been achieved
farmer of 2% for all Kharif crops and
1.5% for all Rabi crops and 5% for As compared to 2015-16, there is about 18.3 per cent
commercial and horticultural crops. increase in farmer applications, 10.8 per cent increase in
- • There is no upper limit on area insured and about 76 per cent increase in sum
Government subsidy and no insured under the scheme.
capping on sum and farmers will get
claim against full sum insured Climate Smart Agriculture?
without any reduction.
E-Nam? Interest Subvention?

Food management
Objectives of Food Management
- providing fair price to farmers,

- making foodgrains affordable to low
income consumers,
- provisioning for
contingencies/shortages by
maintaining buffer stocks
- To reduce food price volatility.

Food management
Rising Economic Costs of operations

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Lecture 5 Aditya Sir

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Economic

Copyright © 2018 by Vision IAS. [www.visionias.in] Economic Survey, Aditya Kalia

A new, exciting Bird's eye view of Indian Economy

6 Climate, Climate Change and Agriculture Agriculture and Food Management 7

Copyright © 2018 by Vision IAS. [www.visionias.in] Economic Survey, Aditya Kalia

Copyright © 2018 by Vision IAS. [www.visionias.in] Economic Survey, Aditya Kalia

Sustainable Development Goals

Copyright © 2018 by Vision IAS. [www.visionias.in] Economic Survey, Aditya Kalia

Copyright © 2018 by Vision IAS. [www.visionias.in] Economic Survey, Aditya Kalia

Copyright © 2018 by Vision IAS. [www.visionias.in] Economic Survey, Aditya Kalia

Copyright © 2018 by Vision IAS. [www.visionias.in] Economic Survey, Aditya Kalia

Programmes: 3 main: Two Upcoming:

Copyright © 2018 by Vision IAS. [www.visionias.in] Economic Survey, Aditya Kalia

- Increasing forest and tree cover

Copyright © 2018 by Vision IAS. [www.visionias.in] Economic Survey, Aditya Kalia

Copyright © 2018 by Vision IAS. [www.visionias.in] Economic Survey, Aditya Kalia

1. Crop residue, biomass burning (26-29 per cent) – Combine harvesters

Copyright © 2018 by Vision IAS. [www.visionias.in] Economic Survey, Aditya Kalia

Straw management system for rice and wheat farming.

Copyright © 2018 by Vision IAS. [www.visionias.in] Economic Survey, Aditya Kalia

Copyright © 2018 by Vision IAS. [www.visionias.in] Economic Survey, Aditya Kalia

Agriculture – The Ironies!

- Price v/s Production

Objective of the chapter:

Copyright © 2018 by Vision IAS. [www.visionias.in] Economic Survey, Aditya Kalia

Copyright © 2018 by Vision IAS. [www.visionias.in] Economic Survey, Aditya Kalia

Copyright © 2018 by Vision IAS. [www.visionias.in] Economic Survey, Aditya Kalia

Changes in no. of dry/wet and

Copyright © 2018 by Vision IAS. [www.visionias.in] Economic Survey, Aditya Kalia

Copyright © 2018 by Vision IAS. [www.visionias.in] Economic Survey, Aditya Kalia

Copyright © 2018 by Vision IAS. [www.visionias.in] Economic Survey, Aditya Kalia

Copyright © 2018 by Vision IAS. [www.visionias.in] Economic Survey, Aditya Kalia

Impact on revenue - Puzzle

Copyright © 2018 by Vision IAS. [www.visionias.in] Economic Survey, Aditya Kalia

Copyright © 2018 by Vision IAS. [www.visionias.in] Economic Survey, Aditya Kalia

Solution – More crop, Per Drop

Copyright © 2018 by Vision IAS. [www.visionias.in] Economic Survey, Aditya Kalia

Fully irrigating Indian agriculture, that too

In thinking about agricultural policy

Copyright © 2018 by Vision IAS. [www.visionias.in] Economic Survey, Aditya Kalia

Copyright © 2018 by Vision IAS. [www.visionias.in] Economic Survey, Aditya Kalia

Copyright © 2018 by Vision IAS. [www.visionias.in] Economic Survey, Aditya Kalia

Copyright © 2018 by Vision IAS. [www.visionias.in] Economic Survey, Aditya Kalia

Copyright © 2018 by Vision IAS. [www.visionias.in] Economic Survey, Aditya Kalia

Copyright © 2018 by Vision IAS. [www.visionias.in] Economic Survey, Aditya Kalia

Determinants of Cropping pattern:

Copyright © 2018 by Vision IAS. [www.visionias.in] Economic Survey, Aditya Kalia

Copyright © 2018 by Vision IAS. [www.visionias.in] Economic Survey, Aditya Kalia

Copyright © 2018 by Vision IAS. [www.visionias.in] Economic Survey, Aditya Kalia

Copyright © 2018 by Vision IAS. [www.visionias.in] Economic Survey, Aditya Kalia

- Use of improved implements has estimated that percentage of agricultural

- Inadequate rainfall/ drought was

Copyright © 2018 by Vision IAS. [www.visionias.in] Economic Survey, Aditya Kalia

Copyright © 2018 by Vision IAS. [www.visionias.in] Economic Survey, Aditya Kalia

- providing fair price to farmers,

Copyright © 2018 by Vision IAS. [www.visionias.in] Economic Survey, Aditya Kalia

Copyright © 2018 by Vision IAS. [www.visionias.in] Economic Survey, Aditya Kalia

Copyright © 2018 by Vision IAS. [www.visionias.in] Economic Survey, Aditya Kalia

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