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

 

Editorial 1 : Farm Income Transformation

Context

The limited success of the national objective to double farmers’ incomes highlights structural weaknesses in Indian agriculture, while the Beed experiment demonstrates how focused, science-based interventions can deliver transformative income growth.

Introduction

The vision to double farmers’ real incomes by 2022–23 was announced during a period of agrarian distress, reflecting the central role of agriculture in India’s socio-economic stability. However, research evidence indicates that this target was only partially achieved, making it necessary to draw lessons from successful local models such as the Krishikul initiative in Beed, Maharashtra.

National Experience: Structural Limits to Income Growth

• The absence of a comprehensive and independent national evaluation has limited clarity on actual income outcomes across regions.
• Available research suggests that income growth remained significantly below the stated target due to persistent structural constraints.
• Indian agriculture continues to be dominated by low-value and climate-sensitive crops. This dependence exposes farmers to rainfall shocks, price volatility, and unstable incomes year after year.

Beed’s Krishikul Model: Evidence from the Ground

• Farmers in Beed were encouraged to transition from traditional crops to high-value fruit cultivation.
• This diversification significantly improved per-acre returns and reduced vulnerability to price fluctuations.
• An independent TISS evaluation in 2024 reported more than a tenfold increase in farmers’ per-acre income.
• Average earnings rose from ₹38,700 to nearly ₹3.9 lakh within a relatively short transition period.

Scientific Farming and Farmer Capacity Building

• The initiative relied on scientific methods such as high-density plantation to maximise land productivity.
• These practices enabled farmers to generate higher output and income from limited landholdings.
• Krishikul functioned as a training and experimentation hub for farmers. Continuous handholding helped farmers adapt to new crops, inputs, and cultivation practices.

Water Security as the Foundation of Income Stability

• Before intervention, groundwater levels in Beed had declined to nearly 400 feet below the surface. Such extreme water stress made cultivation of high-value crops nearly impossible.
• Groundwater recharge through farm ponds, check dams, and aquashafts raised the water table substantially.
• Improved water availability ensured assured irrigation and long-term sustainability of orchards.

Credit Access and Risk Mitigation

• Banks were encouraged to extend credit through a first-loss default guarantee mechanism.
  This reduced lending risks and increased institutional confidence in financing farmers.
• Access to formal credit enabled farmers to invest in orchard establishment and input costs.
  It also reduced dependence on informal lenders and high-interest borrowing.

Beyond Production: Value Chain Integration Challenges

• Despite production gains, farmers currently receive only 25–33% of the consumer’s rupee.
  Weak market linkages and multiple intermediaries continue to erode farm incomes.
• Investments in aggregation, storage, processing, and cold-chain infrastructure are essential. Such measures can stabilise prices, reduce wastage, and enhance farmers’ share in final consumer prices.

Scaling Up: Lessons from the White Revolution

• The White Revolution demonstrates how a local innovation can be scaled nationally with strong institutional backing.
• Political leadership and the creation of NDDB played a decisive role in transforming the dairy sector.
• A similar approach is required to scale successful horticulture models across states.
  Smallholders can drive growth if supported by appropriate institutions and policies.

Role of the State: From Proof of Concept to Policy

• NGOs can pilot innovative models but lack the capacity to scale them nationwide. Government intervention is essential for providing resources, expertise, and policy alignment.
• A coordinated Centre–State–NGO–private sector partnership is required.
  Such collaboration can integrate production, infrastructure, finance, and market reforms.

Conclusion

The Beed experience clearly demonstrates that farmers’ incomes can be increased manifold through a combination of scientific farming, water security, and institutional support. Scaling such models nationally requires strong political will, coordinated policy action, and sustained investment, offering a realistic pathway to long-term rural prosperity.

 

Editorial 2 : State Spending Capacity

Context

Enhanced borrowing flexibility and Centre-supported loans have expanded states’ fiscal space in recent years, but future capital spending will depend on borrowing limits and Finance Commission decisions.

Introduction

In recent years, questions have arisen regarding how states breached the 3% fiscal deficit limit and whether expanding welfare schemes have constrained capital expenditure. The editorial explains that higher deficits were largely enabled by additional borrowing relaxations granted by the Centre and the Finance Commission, while capital expenditure has remained resilient despite rising social welfare spending.

Borrowing Flexibility and Higher Fiscal Deficits

• States were allowed borrowing beyond their base limit of 3–4% of GSDP during FY2021–FY2025. Additional borrowing of 0.5–1.1% of GSDP was permitted to support growth during economic stress.
• This flexibility explains why several states recorded fiscal deficits above 3%. The relaxation was policy-driven rather than a result of fiscal indiscipline.

Role of Central Loans in Expanding Fiscal Space

• The Centre extended GST compensation loans worth ₹2.6 trillion in FY2021–FY2022. These loans helped states manage revenue shortfalls caused by GST implementation and the pandemic.
• States also received ₹3.7 trillion under 50-year interest-free capex loans during FY2021–FY2025. These loans were over and above normal borrowing limits and directly supported capital spending.

Reform-Linked Borrowings and Power Sector Reforms

• Several states availed additional borrowings by completing Centre-prescribed reforms.
  Total reform-linked borrowings amounted to ₹1.1 trillion during FY2021–FY2025.
• Power sector reforms alone enabled states to borrow an additional ₹1.3 trillion.
  This incentive-based approach linked fiscal flexibility with structural improvements.

Carry-Forward of Unutilised Borrowings

• States were allowed to carry forward unused borrowing limits from FY2021 to FY2022. This provision helped sustain spending amid fragile post-pandemic recovery conditions.
• The 15th Finance Commission further allowed carry-forward within its award period. This softened fiscal constraints and widened spending space in recent years.

Welfare Spending and Revenue Deficit Management

• States have significantly increased social welfare spending, including cash transfers.
  Cash transfers to women across 11 states rose to ₹1.5 trillion in FY2026 from ₹120 billion in FY2023.
• Despite this rise, revenue deficits widened only marginally.
  States adjusted spending under other heads or rationalised older schemes to manage fiscal pressure.

Capital Expenditure Remains Resilient

• Contrary to concerns, welfare spending has not crowded out capital expenditure.
  States’ combined capital expenditure and loans grew at a strong CAGR of 18.5%.
• Capital spending by 28 states doubled to ₹8.4 trillion during FY2021–FY2025.
  This reflects continued emphasis on growth-supporting expenditure.

Future Fiscal Space and the 16th Finance Commission

• States’ future spending capacity will depend heavily on the 16th Finance Commission’s recommendations.
  Decisions on resource sharing, borrowing limits, and carry-forward provisions will be crucial.
• The continuation or withdrawal of borrowing flexibility will shape state-led growth.
  Reduced fiscal space could constrain capital expenditure despite development needs.

Conclusion

States’ fiscal expansion in recent years has been enabled by exceptional borrowing flexibility and Centre support, allowing them to balance welfare spending with capital investment. Going forward, the ability of states to sustain growth-oriented expenditure will largely depend on the framework laid down by the 16th Finance Commission, making its recommendations critical for India’s medium-term economic trajectory.