📰 ASEAN summit: Modi hard-sells India as an attractive investment destination
“The task of transforming India is proceeding on an unprecedented scale,” says the Prime Minister
•Highlighting India’s role in the Indo-Pacific region, Prime Minister Narendra Modi spoke of Lord Buddha and Mahatma Gandhi’s tradition of peace, a day after Indian officials joined the quadrilateral grouping that includes Australia, Japan and the United States.
•In a meeting with the non-resident Indian community, Mr. Modi said on Monday that India has sacrificed lives for the peace of the world even as he informed U.S. President Donald Trump that India will play a role for the welfare of humanity.
•“History does not show us a single incident in which India has done bad things to anyone. During the World War I and the World War II, we did not have any territorial ambition, yet more than 1.5 lakh soldiers of my country sacrificed lives in quest for peace. Because of this sacrifice, any Indian can say with pride that we contribute to the world and do not take anything from the world. For India, the land of Buddha and Gandhi, peace is not just a word, peace is in our veins. And, we certainly have never snatched anything from anybody in the past,” said Prime Minister Modi, speaking in Hindi to a gathering of non-resident Indians living in Philippines.
•“I have come to a nation and a region that is very important to India,” he said to a cheering crowd.
•Mr. Modi’s comment sets the backdrop of the quadrilateral dialogue that is being interpreted as a move to counter China’s growing might, though Indian officials have strongly stated that they do not wish to target any country through this mechanism. The U.S. official statement issued following Sunday’s talks, hinted at continuing the dialogue process that began on Sunday, but Indian officials did not confirm that. However, Foreign Secretary S. Jaishankar interpreted the quadrilateral as one of the several such groupings that India is part of. “We do many meetings with many groupings. This is part of the diplomacy that countries do. Chinese also do a quadrilateral with the US. China does a trilateral with Japan and Korea. Diplomacy has a lot of space in between and it is not just for multilateral and bilateral meetings,” said Mr. Jaishankar.
•Mr. Modi indicated India’s growing ambition to emerge as a global peacekeeping and peace-enforcing power reminding that India recognises the need for peace in the global order.
•“If any country in the world is the largest contributor to global peacekeeping, then it is India. In many restive areas of the world, Indian peacekeepers are present,” he said. Interacting with the media, the Foreign Secretary said that peacekeeping in the Southeast Asian region is for the United Nations to decide.
•Mr. Jaishankar said a range of issues like the violence in the Rakhine state of Myanmar, the situation in Afghanistan, and India-U.S. defence cooperation were discussed between Mr. Modi and Mr. Trump. “Consequences of the violent outcome of the conflict in the Rakhine province of Myanmar were discussed,” said the Foreign Secretary.
•In his meeting with Mr. Trump, Mr. Modi also spoke positively about the commitment of the U.S. leadership to India and said, “Wherever President Trump has travelled in recent days and wherever he had an opportunity to speak on India, he has spoken optimistically and highly. I also assure that India will try its best to fulfil the expectations that the U.S. and the world has from it.”
📰 On maternity benefits
It is time for the government to shoulder the financial responsibility
•The amendments to the Maternity Benefit Act, which were introduced this year, in particular the provision of 26 weeks of paid maternity leave and the mandatory crèche facility, are path-breaking, but there are concerns over their feasibility. Recently, the Labour Ministry placed the financial burden of implementing these measures squarely on the employers; this legitimises these concerns.
•The amendments seek to improve infant mortality rate (34 per 1,000 live births) and maternal mortality rate (167 per 100,000 live births), but the challenge lies in their implementation. The measures introduced, particularly the crèche facility, are cost-intensive and may deter employers from hiring or retaining pregnant women. A 2014 International Labour Organisation report specifically cautions against making employers solely liable for the cost of maternity benefits for this reason. It advocates that maternity benefits should be provided either through compulsory social insurance or public funds. In fact, the Standing Committee on Labour in 2007 had suggested that the government should create a corpus fund to partially sponsor the costs to be incurred by the employer to provide maternity benefits. However, no government has shown the will to change this status quo even though the state and society have much to gain from ensuring effective implementation of maternity benefits.
•To illustrate, one of the key goals of any maternity benefit policy is to facilitate breastfeeding by working mothers. Studies have shown that health benefits that accrue to both the mother and her child by breastfeeding are more than matched by economic returns at family, enterprise and national levels. A 2017 report released by the Global Breastfeeding Collective, led by UNICEF and the World Health Organisation, has termed breastfeeding the “best investment in global health” generating $35 in global return for every dollar invested. A ‘Global Breastfeeding Scorecard, 2017’ released by the Collective shows that India spends an abysmal $0.15 (less than ₹10) per child to ensure that it meets the breastfeeding guidelines. The report suggests that as things stand, India is poised to lose an estimated $14 billion in its economy, or 0.70% of its Gross National Income, due to a high level of child mortality and growing number of deaths in women from cancers and Type II diabetes, directly attributable to inadequate breastfeeding.
•It is time for the government to shoulder the financial responsibility of providing maternity benefits. This could be implemented by enabling employers to seek reimbursement of the expenses incurred by them in this respect. In addition, the government must find innovative and cost-effective ways to ensure that working women are not forced to discontinue breastfeeding. A simple method is to express breast milk and store it to be given to their children while they are away. The only provision that needs to be provided by employers to facilitate this would be a clean and private pumping room.
📰 Eastern promise
India must balance diverse alliances as it strengthens its East Asia pivot
•Prime Minister Narendra Modi’s visit to the Philippines to attend the ASEAN-India summit, the East Asia Summit and the Regional Comprehensive Economic Partnership summit has put India centre-stage in the Asian region now referred to as “Indo-Pacific”. Equally, it puts the “Indo-Pacific” and ties with the U.S. centre-stage in India’s Act East policy, in all three spheres: political, strategic and economic. Mr. Modi’s arrival in Manila was preceded by the first meeting of the India-U.S.-Japan-Australia quadrilateral, a grouping first mooted in 2006 by Japanese Prime Minister Shinzo Abe. It ended with statements on cooperation for a “free, open, prosperous and inclusive Indo-Pacific region”, a direct signal that it will counter China’s actions in the South China Sea if necessary. Next, Mr. Modi’s meeting with U.S. President Donald Trump saw a similar emphasis on cooperating in the Indo-Pacific, a term now widely adopted by the U.S. The ‘Quad’ doesn’t just pertain to maritime surveillance, it also aims at enhancing connectivity in accordance with “the rule of law” and “prudent financing” in the Indo-Pacific together, a reference to American plans to build an “alternative financing model” to China’s Belt and Road Initiative. Finally, Mr. Modi’s speech to ASEAN vowed to bring India’s economic and business ties with the region up to the level of their “exceptionally good political and people-to-people relations”. This sets the stage for closer engagement ahead of the 25th year Commemorative Summit to be held in Delhi in January 2018, with ASEAN leaders also expected to attend Republic Day festivities.
•The clarity in India’s purpose in East Asia at this juncture is important, but the next steps are equally vital. To begin with, despite a government statement to the contrary, it is impossible to avoid the conclusion that the Quad, also called a “coalition of democracies” of the Indo-Pacific, is a front aimed at countering China’s influence. As the only member of the proposed coalition that is also part of another security arrangement involving China and Russia, the Shanghai Cooperation Organisation, India’s ability to balance its interests will be tested. Finally, while there will be much to navigate on the political front, Mr. Modi would be keen to keep a sharp focus on the economic tailwinds during his engagements in Manila. The 10 ASEAN countries account for about 11% of India’s global trade. For the past few years India has joined the ASEAN “plus six”, including China, Japan, South Korea, Australia and New Zealand, to discuss the RCEP free trade agreement. Talks have often run into rough weather over India’s stand on visas and services access, while also holding out against free trade that could give China an unfair edge in goods trade. Mr. Modi’s work is cut out as he clarifies India’s pivot in east Asia.
📰 The forgotten people: on Sri Lankan refugees
India and Sri Lanka should take up repatriation of Tamil refugees at the earliest
•In recent months, the focus of the media has been on the Rohingya refugees in India. But the plight of Sri Lankan refugees, who have been here for nearly 35 years, appears to have gone out of the public consciousness.
•The pathetic condition of shelters, restrictions on movement, and limited scope of livelihood opportunities affect the community of one lakh-odd Sri Lankan refugees, who have been living in Tamil Nadu ever since the anti-Tamil pogrom in Sri Lanka in July 1983. Besides, statelessness is a major problem for a section of refugees whose roots are from central parts of Sri Lanka, generally called hill country.
•The refugees also suffer from social and psychological problems as reports of suicides, school dropouts and child marriage show. Many middle-aged refugees worry about their children’s future, given the fact that 40% of camp refugees are below 18 years. As 28,500 refugees are said to be stateless, the Sri Lankan government, in 2003 and 2009, amended its laws to enable easier repatriation. Tamil political parties on the other side of the Palk Strait would love the refugees to return so that the strength of elected representatives from the Tamil-majority Northern Province will go up in the Sri Lankan Parliament.
•Yet, the voluntary reverse flow of refugees has happened only incrementally. Even the end of the Eelam War in May 2009 and the decision of Indian authorities in January 2016 to waive visa fees and overstay penalty on a case by case basis for willing persons have not made a huge difference. In the last eight and a half years, hardly 10% of the refugee population (9,238 people) went back through a scheme implemented by Indian officials along with the office of the United Nations High Commissioner for Refugees (UNHCR). There is perhaps good reason for the refugees’ reluctance to return.
Improvement in lifestyle
•Around 62,000 refugees, living in 107 camps across Tamil Nadu, have been receiving various relief measures of the Central and State governments. In addition, in recent years, the Tamil Nadu government has taken steps for scores of young boys and girls of the refugee community to join professional courses, particularly engineering. This has benefitted eligible candidates among 36,800 non-camp refugees in the State too.
•Regardless of the quality of housing and the nature of their jobs, several camp refugees have experienced a perceptible improvement in their lifestyle. Besides, a new generation has been raised completely in Tamil Nadu and it would not be a surprise for many among them to regard Sri Lanka as an alien country, however nostalgic their parents may be for Jaffna or Mullaitivu.
•The refugees know well that if they go back to Sri Lanka, they will not get many of the benefits they have been enjoying in Tamil Nadu. What especially bothers them is “lack of or no livelihood opportunities”, as found in a survey of refugee returnees by the UNHCR, Colombo, in 2015. This situation may not improve in the near future given the state of the Sri Lankan economy.
•The refugees from the hill country are landless. Unless they are given some quantum of land, they will be not be inclined to go back. One has to keep in mind the current situation in the hill country region too where the Tamils are no longer interested in working on tea plantations.
Change in status quo
•At present, for both India and Sri Lanka, the repatriation of refugees does not seem to be a priority. But they cannot afford continuing with the status quo either, as Tamil Nadu holds the distinction of hosting the largest number of refugees in India. It would be in the interests of the two countries to thrash out the issue sooner than later. While for India a long-standing problem would be resolved, for Sri Lanka it would be a step towards ethnic reconciliation.
•In fact, political changes in Tamil Nadu in the last year provide a window of opportunity for India to revive talks with Sri Lanka. The two governments can come out with a comprehensive package on voluntary repatriation, after involving representatives of the refugee community, the Tamil Nadu government and Sri Lanka’s Northern Provincial Council.
•For refugees who want to stay back, India can consider providing them citizenship, as it did for refugees from Pakistan and Afghanistan. Of course, it has the right not to grant citizenship to trouble-makers. If everything goes off smoothly, authorities can finally close down camps in Tamil Nadu, bringing an end to an episode that has lasted longer than the civil war of Sri Lanka.
📰 Record diplomatic bodies’ UIN: Centre
•The government has clarified that sales or supply to foreign diplomatic missions or UN organisations will not have any additional effect on the supplier’s tax liability and so such supplies must be recorded along with the Unique Identification Number (UIN) of the recipient.
•This clarification follows several foreign diplomatic missions complaining that their suppliers are refusing to record their UIN during transactions.
•“Recording of UIN while making such sales will enable foreign diplomatic missions/UN organisations to claim refund of the taxes paid by them in India,” the government added. “Therefore, it is advised that under no circumstance any supplier should decline to record the UIN of the diplomat/official on the tax invoice.”
•The Hindu last month reported that foreign diplomats posted in New Delhi have complained to the Ministry of External Affairs that the Goods and Services Tax regime has modified the tax-exempt status of the foreign missions, and also that the UIN system meant that a country with an embassy as well as a consulate would have to acquire different UIN numbers for the embassy as well as the consulates.
•The diplomats also complained that the UIN system infringed on the confidentiality of diplomatic practices and privacy of foreign diplomats posted in India.
📰 JPC on land Bill to seek eighth extension
‘Unanimity on at least 27 of 29 clauses’
•The Joint Parliamentary Committee (JPC) on the Land Acquisition Bill, 2015, will seek the eighth extension in the upcoming Parliament session. The Bill that seeks to alter the 2013 Act brought in by the UPA regime was put on the back burner just months after the Narendra Modi government introduced it in the Lok Sabha in May 2015.
•“Today, we have taken a unanimous decision to seek an extension for the JPC. Out of 29 clauses, we have achieved unanimity on at least 27. More consultations are required for the remaining clauses,” one of the committee members told The Hindu on Monday.
•The JPC was set up in May 2015 to examine the Bill after it was opposed by many political parties, including allies of the ruling BJP. The Bill seeks to remove the consent clause for acquiring land for five purposes — industrial corridors, public-private projects, rural infrastructure, affordable housing and defence.
Delay questioned
•The members have been questioning the relevance of the committee. “The government hailed it as a big-ticket reform and then developed cold feet. So now instead of killing the Bill, they are delaying it in JPC,” an MP said.
•The Congress members have stopped attending the JPC after submitting a disparaging note on the future of the Bill. The Bill has been on a roller coaster ride with the Centre thrice issuing an ordinance.
📰 Liquor sale ban exemption applies nationwide, says SC
• The Supreme Court on Monday found itself surprised by a doubt raised by the Madras High Court about the December 2016 ban on sale of liquor within 500 metres along national and State highways.
•The bone of contention is a July 11 order of the apex court which clarified that stretches of highways running through municipal areas were exempted from the ban.
•But what has puzzled the Madras High Court is whether the exemption granted to municipal areas in the July 11 order pertained to only municipal areas in Chandigarh and none other.
•The question had popped up in the HC because the petitioner in the case was an NGO based in Chandigarh called Arrive Safe Society.
•The Madras HC asked the Tamil Nadu government to approach the Supreme Court and get a clarification.
•“The High Court says municipal areas in the SC order means only areas in Punjab and not in Chennai. The Chief Justice Bench of the HC wants a clarification whether the exemption applies only to Chandigarh,” senior advocate Mukul Rohatgi, for Tamil Nadu, addressed a Bench led by Chief Justice of India Dipak Misra.
•“Well, why should the HC think that? If our order applies for municipal areas in Chandigarh it will apply equally for municipal areas across the country,” Chief Justice Misra responded orally.
•Justice D.Y. Chandrachud, who had authored the highway ban verdict and is now part of the CJI’s Bench, observed that the exemption from ban applies to municipal areas across the country.
•Justice Chandrachud added that the very purpose of the July 11 order was to prevent interim applications and orders like this one.
•The point of focus of the present confusion was a particular paragraph in the July 11 order which said, “The purpose of the directions contained in the order dated December 15, 2016 is to deal with the sale of liquor along and in proximity of highways properly understood, which provide connectivity between cities, towns and villages. The order does not prohibit licensed establishments within municipal areas. This clarification shall govern other municipal areas as well. We have considered it appropriate to issue this clarification to set at rest any ambiguity and to obviate repeated recourse to IAs (interlocutory applications), before the court.”
•“The phrase ‘other municipal areas’ in the order means municipal areas across the country. The interpretation is that,” Justice Chandrachud orally observed.
•Chief Justice Misra reserved the case for orders.
•The Madras High Court’s Division Bench of Chief Justice Indira Banerjee and Justice M. Sundar had recently felt that the State government should approach the apex court through an appropriate application and obtain further clarification on the specific issue as to whether it was entitled to open State-run liquor shops on highways passing through city and town limits without declassifying them.
•They had been hearing a public interest litigation petition filed by advocate K. Balu.
•The Supreme Court had clarified in the July 11 order that its nationwide ban on sale of liquor within a distance of 500 metres along national and State highways does not extend to municipal areas.
•The court had clarified that the 500-metre ban does not prohibit licensed establishments within municipal areas.
•The apex court explained that the December 15, 2016 ban on liquor sale only extends along and in proximity of highways which provide connectivity between cities, towns and villages.
•This clarification from the apex court had effectively made infructuous any pending litigation in High Courts on declassification of State or national highways to district roads by State governments or local authorities. In short, stretches of highways running within city limits are now, by default, exempt from the liquor ban.
•The court’s clarification had come as a huge relief for bar and hotel owners who were forced to shut down operations post the December 15 ban. Thousands were left jobless after these establishments were closed down.
•On March 31, the court had dismissed their plea for modification of the ban and confirmed that the ban was not restricted to just liquor vends alongside the highways but also to other larger establishments, including pubs and hotels
•In May, the Tamil Nadu Bars and Clubs Owners Association had described to the court the “crippling effect” of the ban in the State. Senior advocate Arvind Datar had conveyed how businesses literally crumbled and over two lakh employees were rendered jobless.
•The apex court order was based on a special leave petition filed by Arrive Safe Society challenging a notification issued by the Chandigarh administration on March 16, 2017 – post the Supreme Court’s ban order on December 15, 2016 – declaring three stretches of State highways as “major district roads.” These roads are inter-sectoral and run within the city. The NGO had claimed the notification was issued to “circumvent” the ban.
📰 Food prices spur CPI inflation to 3.58%
Acceleration in Oct. retail price gains also driven by fuel and light segment as crude oil climbs globally
•Retail inflation accelerated to 3.58% in October on the back of rising food and fuel prices, according to official data released by the Ministry of Statistics and Programme Implementation on Monday.
•Inflation as measured by the Consumer Price Index (CPI) was 3.28% in September and as low as 1.46% in June. The food and beverages component of CPI saw a growth of 2.26% in October, the fastest pace since March, and up from 1.76% in September. This was mainly driven by a sharp uptick in vegetable prices.
•Inflation in the fuel and light segment came in at 6.36%, up from 5.56% in September.
•“The food influence is seasonal, but global crude prices are firming up and that will have a longer term adverse impact on Indian inflation,” said D.K. Srivastava, chief policy advisor at EY India. “The RBI will remain conservative and I don’t think there is any possibility of a rate reduction.”
•Within the food segment, vegetable inflation quickened rapidly to 7.47% in October, from 3.92% in September. Price changes in almost all other key food segments — fruits, oils and fats, spices, pulses, and sugar and confectionery — hovered around the same levels as in September. Inflation in the milk and milk products category quickened to 4.30% in October from 3.87% in the previous month.
•“Retail inflation has moved up in October on expected lines and is likely to breach the 4% mark in the coming months,” Rishi Shah, Senior Economist at Deloitte India, wrote in a note. “Important to remember that the RBI now looks at an inflation target range of 4% plus/minus 2%. It seems that pay revision in the public sector and a change in the tax regime has had some effect on prices while there has been some increase in vegetable prices due to erratic rains affecting supply.”
•“Increasing inflation prints, rising crude oil prices coupled with uncertainty on account of U.S. central bank’s policy are likely to result in the RBI keeping rates unchangedin the upcoming policy meeting in December,” Mr. Shah added.
•In October, the RBI’s Monetary Policy Committee had said that retail inflation was broadly moving along expected lines and projected that the rate would quicken to 4.2% to 4.6% over the following six months.
•Oil prices are currently at about $64 a barrel, far higher than the average $50-55 a barrel seen over the last 18 months or so.
•Core inflation, which excludes food and fuel inflation, eased marginally to 4.55% in October, from 4.60% in the previous month, breaking a three-month quickening streak.
•Inflation in the other major categories of the CPI remained stable. The rate of growth of prices in the clothing and footwear category speeded up a tad to 4.76% in October, from 4.63% in September. Inflation in the housing sector accelerated to 6.68%, from 6.10% in the preceding month.
📰 Loan waiver is not the solution
We need to revisit the credit policy with a focus on the outreach of banks and financial inclusion
•Since Independence, one of the primary objectives of India’s agricultural policy has been to improve farmers’ access to institutional credit and reduce their dependence on informal credit. As informal sources of credit are mostly usurious, the government has improved the flow of adequate credit through the nationalisation of commercial banks, and the establishment of Regional Rural Banks and the National Bank for Agriculture and Rural Development. It has also launched various farm credit programmes over the years such as the Kisan Credit Card scheme in 1998, the Agricultural Debt Waiver and Debt Relief Scheme in 2008, the Interest Subvention Scheme in 2010-11, and the Pradhan Mantri Jan-Dhan Yojana in 2014.
•It is encouraging to see a robust increase in institutional credit from ₹8 lakh crore in 2014-15 to ₹10 lakh crore in 2017-18. Of this, ₹3.15 lakh crore is meant for capital investment, while the remaining is for crop loans, according to the Ministry of Agriculture and Farmers Welfare. Actual credit flow has considerably exceeded the target. The result is that the share of institutional credit to agricultural gross domestic product has increased from 10% in 1999-2000 to nearly 41% in 2015-16.
Clamour for loan waiver
•While the flow of institutional farm credit has gone up, the rolling out of the farm waiver scheme in recent months may slow down its pace and pose a challenge to increasing agricultural growth. The Uttar Pradesh governmenthas promised a ₹0.36 lakh crore loan waiver covering 87 lakh farmers, whereas the Maharashtra government has announced it’s writing off ₹0.34 lakh crore covering more than 89 lakh farmers. The demand for a loan waiver is escalating in Punjab, Karnataka, and other States. This clamour is only poised to increase as the 2019 general election comes closer.
•There is a serious debate on whether providing loans to farmers at a subsidised rate of interest or their waiver would accelerate farmers’ welfare. At the global level, studies indicate that access to formal credit contributes to an increase in agricultural productivity and household income. However, such links have not been well documented in India, where emotional perceptions dominate the political decision quite often. A recent study by the International Food Policy Research Institute reveals that at the national level, 48% of agricultural households do not avail a loan from any source. Among the borrowing households, 36% take credit from informal sources, especially from moneylenders who charge exorbitant rates of interest in the 25%-70% range per annum. More importantly, the study using the 2012-13 National Sample Survey-Situation Assessment Survey (schedule 33) finds that compared to non-institutional borrowers, institutional borrowers earn a much higher return from farming (17%). The net return from farming of formal borrowers is estimated at ₹43,740/ha, which is significantly greater than that of informal sector borrowers at ₹33,734/ha. Similarly, access to institutional credit is associated with higher per capita monthly consumption expenditures.
•A negative relationship between the size of farm and per capita consumption expenditure (a proxy for income) further underscores the importance of formal credit in assisting marginal and poor farm households in reducing poverty. Indeed, access to formal institutional credit also tends to enhance farmers’ risk-bearing ability and may induce them to take up risky ventures and investments that could yield higher incomes. Going by the NSS schedule 18.2 (debt and investment), rural households’ investments in agriculture grew at a high rate of 9.15% per annum between 2002 and 2012. While 63.4% of agricultural investments are done through institutional credit, landless, marginal and small farmers’ investment demand is met through informal sources to the tune of 40.6%, 52.1%, and 30.8%, respectively. Statistics show that nearly 82% of all indebted farm households (384 lakh) possess less than two hectares of land compared to other land holders numbering 84 lakh households. Those residing in the less developed States are more vulnerable and hence remain debt ridden.
Not helping farmers’ welfare
•Clearly, a major proportion of farmers remain outside the ambit of a policy of a subsidised rate of interest, and, for that matter, of loan waiver schemes announced by respective State governments. In other words, this sop provides relief to the relatively better off and lesser-in-number medium and large farmers without having much impact on their income and consumption. This anomaly can be rectified only if the credit market is expanded to include agricultural labourers, marginal and small land holders. It is, therefore, important to revisit the credit policy with a focus on the outreach of banks and financial inclusion.
•Second, the government along with the farmers’ lobby should desist from clamouring for loan waivers as it provides instant temporary relief from debt but largely fails to contribute to farmers’ welfare in the long run. To what extent this relief measure can help bring farmers out of indebtedness and distress remains a question. This is because farmers’ loan requirement is for non-agricultural purposes as well, and often goes up at the time of calamity when the state offers minimal help. If governments are seriously willing to compensate farmers, they must direct sincere efforts to protect them from incessant natural disasters and price volatility through crop insurance and better marketing systems.
•Third, it should be understood that writing off loans would not only put pressure on already constrained fiscal resources but also bring in the challenge of identifying eligible beneficiaries and distributing the amount.
•The report of the Committee on Doubling of Farmers’ Income, Ministry of Agriculture and Farmers Welfare, has rightly suggested accelerating investments in agriculture research and technology, irrigation and rural energy, with a concerted focus in the less developed eastern and rain-fed States for faster increase in crop productivity and rural poverty reduction. Additional capital requirements estimated for 20 Indian States are ₹2.55 lakh crore (₹1.9 lakh crore on irrigation and rural infrastructure by State governments and ₹0.645 lakh crore by the farmers) at 2015-16 prices by 2022-23. Public and private investments are required to grow at an annual rate of 14.8% and 10.9% in the next seven years. A diversion of money towards debt relief, which is in fact unproductive, will adversely impinge on state finances, may dissuade lending by the banks, and hence prove counterproductive to the government’s broader mandate of doubling farmers’ income by 2022-23.
