What to Read in Indian Express Editorial( Topic and Syllabus wise)

Editorial 1 : Stopping Short of the Farm

Context: Union Budget 2025-26 and the Agriculture Sector

 

Introduction: Key Initiatives in the Budget

• Focus on 100 Districts: Special emphasis on augmenting agricultural productivity, promoting sustainable farming practices, and crop diversification.
• Kisan Credit Card (KCC) Expansion: Credit access increased from Rs 3 lakh to Rs 5 lakh to support farmers financially.
• Pulses Mission: Aimed at achieving atma nirbharta (self-sufficiency) in tur, moong, and urad production.
• Makhana Board in Bihar: Established to promote the cultivation and marketing of makhana (foxnut).
• High-Yielding Crop Varieties: Introduction of 109 climate-resilient varieties of 32 field and horticulture crops.
• Mission for Vegetables and Fruits: Rs 500 crore allocation to enhance production, strengthen supply chains, and boost processing.
• Agriculture Infrastructure Fund: Allocation increased from Rs 600 crore in FY25 to Rs 900 crore in FY26 to improve post-harvest infrastructure.

 

Budget Allocation and Inflation Impact

• Total Allocation: Rs 1.49 trillion for agriculture and allied sectors, marking a 4% increase over the previous year.
• Inflation Concerns: With inflation projected at 4-5% in FY26, the real value of the allocation may decline slightly.
• PM-Kisan Scheme: Allocation remains stagnant at Rs 60,000 crore since 2019, leading to a decline in real terms.
• Missed Opportunity: Failure to integrate PM-Kisan with the direct transfer of fertiliser subsidies, which has a larger budget than the Ministry of Agriculture.

 

Structural Challenges in Agriculture

• Declining Share in GDP vs. Rising Workforce Dependency
  1. Agriculture’s share in GDP has declined to 17.7%, while its share in the workforce increased from 42.5% (2018-19) to 46.1% (FY24).
  2. This reverse trend highlights the inability of non-agricultural sectors to absorb surplus labour, depressing real wages in farming.
• Low R&D Investment
  1. R&D expenditure remains below 0.5% of agri-GDP, far short of the 1% required for sustainable growth.
  2. Marginal increase in R&D allocation in FY26 may limit productivity gains and climate resilience.
• MSP-Centric Policies and Crop Diversification
  1. Heavy reliance on rice and wheat due to MSP procurement policies crowds out high-value crops like pulses, oilseeds, and horticulture.
  2. Lack of crop-neutral incentives hinders sustainable diversification.
• Post-Harvest Losses
  1. Significant losses in fruits (8.1%) and vegetables (7.3%), amounting to 37% of total post-harvest losses (Rs 1.53 trillion annually).
  2. Inadequate cold chains, processing facilities, and logistics infrastructure exacerbate the problem.

 

Global and Market Challenges

• Import Dependence: Shortages in pulses, oilseeds, cotton, and maize lead to rising imports.
• Fragmented Value Chains: Farmers receive only 30% of consumer spending on fruits and vegetables due to inefficiencies in the value chain.
• Logistical Bottlenecks: Limited processing capacity and poor market linkages hinder price discovery and farmer incomes.

 

Way Forward: Opportunities and Recommendations

• Strengthening Market Linkages
  1. Integrate e-NAM with the ONDC platform to improve price discovery and reduce middlemen inefficiencies.
  2. Focus on expanding warehousing and cold storage infrastructure to reduce post-harvest losses.
• Promoting Labour-Intensive Sectors
  1. Encourage skill upgradation in labour-intensive sectors to absorb surplus agricultural labour and improve productivity.
  2. Deregulate MSMEs to boost employment creation outside agriculture.
• Private Sector Participation
  1. Incentivise private investment in oilseed production, processing facilities, and marketing infrastructure.
  2. Expand the Agriculture Infrastructure Fund to attract more private capital.
• Subsidy Rationalisation and Investment-Driven Growth
  1. Shift from subsidy-heavy interventions to investment-driven growth strategies.
  2. Rationalise subsidies to free up resources for infrastructure development and R&D.

 

Conclusion: While the Union Budget 2025-26 makes some progress in addressing agricultural challenges, the overall approach remains incremental rather than transformational. A paradigm shift is needed, one that moves away from subsidy-heavy interventions towards investment-driven growth, greater private sector participation, and technology-led efficiency improvements. The path to making Indian agriculture more resilient and globally competitive requires bold reforms in subsidy rationalisation, infrastructure development, and market linkages.

Editorial 2 : Navigating Uncertainty

Context: After budget, what India’s economy needs amid global uncertainties.

 

Introduction: The Union Budget has been presented in a macro environment characterised by declining growth, a falling savings rate, slower corporate earnings and rising household debt. The Budget tried to strike a balance between fiscal expansion and consolidation.

 

Macroeconomic Context and Budgetary Stance

• Economic Slowdown: Quarterly GDP numbers indicate a slowdown, necessitating calibrated fiscal measures to support growth and ensure macroeconomic stability.
• Fiscal Consolidation: The budget adheres to the fiscal responsibility framework, targeting a fiscal deficit of 4.4% of GDP for 2025-26.
• Revenue and Expenditure Trends
  1. Marginal increase in tax-to-GDP ratio expected in 2025-26.
  2. Decline in revenue deficit continues, reflecting improved fiscal discipline.
  3. Total expenditure projected to decline to 14.6% of GDP in 2025-26.

 

Objectives of the Budget

• Accelerate Growth: Stimulate economic recovery and address the current slowdown.
• Secure Inclusive Development: Ensure equitable growth across sectors and regions.
• Invigorate Private Sector Investments: Encourage private capital inflows and business confidence.
• Uplift Household Sentiments: Enhance disposable income and spending power of the middle class.
• Enhance Middle-Class Spending Power: Provide tax relief and improve household financial stability.

 

Key Measures and Reforms

• Taxation Reforms
  1. Income Tax Slab Revisions: Significant upward revisions to provide tax relief to the middle class.
  2. Simplification of Tax Structure: Aimed at easing compliance and broadening the tax base.
  3. Rationalisation of Customs Duties: Streamlining duties to support domestic industries.
• Fiscal Expansion Tools
  1. Disposable Income Boost: Increased disposable income for taxpayers through revised income tax slabs.
  2. Expenditure-Side Relief: Targeted spending to support lower-income households.
• Sectoral Reforms
  1. Focus on key sectors such as urban development, mining, financial services, power, and regulatory frameworks.
  2. Emphasis on Centre-state coordination for next-generation reforms, particularly in state domains.

 

Challenges and Concerns

• Growth and Inflation Dynamics
  1. Nominal GDP Assumption: Budget assumes 10.1% nominal GDP growth for 2025-26, implying real GDP growth of 6% and inflation at 4% or lower.
  2. Inflation Risks: Elevated inflation levels pose challenges to achieving the assumed nominal GDP growth.
• Household Indebtedness and Savings
  1. Rising Household Debt: Household-debt-to-GDP ratio has not returned to pre-Covid levels and continues to rise.
  2. Declining Savings Rate: Shift from safe savings to risky assets like stocks and speculative investments.
  3. Macroeconomic Risks: Increased financialization of the economy raises concerns about financial stability.
• Private Sector and Investment Challenges
  1. Slower corporate earnings and subdued private sector investments require proactive interventions beyond the budget.
  2. Need for deregulation and improved ease of doing business to boost investor confidence.

 

Way Forward: Policy Recommendations

• Strengthening Fiscal and Monetary Coordination
  1. Ensure alignment between fiscal, monetary, and financial sector policies to address household indebtedness and savings challenges.
  2. Promote safe saving opportunities to reduce speculative investments and enhance financial stability.
• Encouraging Household Savings
  1. Introduce policies to incentivise household savings and reduce excessive financialisation.
  2. Monitor rising personal loans and address household financial stress through targeted measures.
• Centre-State Collaboration
  1. Establish a consultative mechanism for implementing next-generation reforms, particularly in state domains.
  2. Focus on deregulation and sectoral reforms to catalyse growth and improve economic resilience.
• Inflation Management
  1. Implement measures to bring inflation down to 4% or lower to support nominal GDP growth assumptions.
  2. Address supply-side constraints and global geopolitical headwinds impacting inflation.

 

Conclusion: The government needs to take a balanced view of the changing preference of financialisation in the economy. This concern was raised by the Economic Survey 2024-25 as well. A policy consideration that would encourage household savings, reduce excessive financialisation and provide safe saving opportunities for the households would ensure greater financial stability and would also help navigate global shocks better in the current uncertain environment.