Current Affairs 30 January 2025

Daily Current Affairs Quiz
30 January, 2025

National Affairs

1. Issues with MGNREGA Scheme

What is MGNREGA Scheme?

• MGNREGA’s Importance
  • The Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) has remained relevant for nearly 20 years surviving under different political regimes due to its benefits for rural workers.
• Budgetary Concerns
  • The schemes budget allocation has declined significantly from 3.2% of total expenditure in FY21 to 1.78% in FY25(BE).
• Unmet Financial Requirements
  • Despite being demand-driven, no additional funds have been allocated this year, leading to 4315 crore wage shortages and 5715 crore pending for material costs.
• Implementation Issues
  • The scheme suffers from delay in payment of wages Aadhaar-based issues and no inflation-indexed wages.
• Economic and Social Impact
  • The scheme supports rural workers building much-needed infrastructure, irrigation canals, rural roads, water conservation, and boosts the rural economy.

2. India’s White Revolution

What is the White Revolution?

The White Revolution is a sudden rise in milk production in India making India the worlds largest milk producer. It was spurred on by Operation Flood launched by the National Dairy Development Board (NDDB) in 1970.

Verghese Kurien known as the Father of the White Revolution led this initiative.

Objectives of Operation Flood

• Increase milk production, creating a flood of milk.
• Boost rural incomes through dairy farming.
• Provide milk to consumers at fair prices.

Key Features

• Formation of village milk producers cooperatives for fair distribution of profits.
• Establishment of a National Milk Grid to reduce price variations.
• Adoption of modern animal husbandry techniques and improved cattle feed.

Phases of Operation Flood

• Phase 1 (1970-1980)
  • Financed by selling donated dairy products from the European Union World Food Program.
  • Focused on developing marketing strategies for milk in urban areas.
• Phase 2 (1981-1985)
  • Expansion of milk sheds from 18 to 136 and urban markets to 290.
  • Self sustaining system with 425 million milk producers across 43000 village cooperatives.
  • Rise in domestic milk powder production from 22000 tons 1980 to 140000 tons 1989.
• Phase 3 (1985-1996)
  • Strengthened dairy cooperatives and infrastructure.
  • Expanded dairy networks, connecting over 73930 cooperatives and 35 crore farmers.

Importance of the White Revolution

• It has made India milk self sufficient surpassing USA.
• Middleman malpractices are being checked. That in turn will result in increased profitability of milk products at farm levels.
• Livelihood in the villages have improved thereby the economy.
• Created a stable dairy industry that came to its fruition by AMUL.
• The White Revolution transformed India from a milk deficient country to the world’s top producer. It’s impact on rural livelihoods and nutrition remains one of the greatest achievements in India’s agricultural history.

Equitable Access to Milk Beyond the White Revolution

Success of the White Revolution Milk production in India surpassed that of all other countries to become the world’s largest producer, yet this achievement has not translated to fair access to milk for the Indian population.

• Nutritional Importance
  • Milk provides protein and calcium and delivers important micronutrients, preventing child stunting and undernutrition.
• Consumption Disparities
  • Households in the top income decile consume 34 times more milk than the lowest income decile.
  • Urban households consume 30% more than rural households though the latter are the main producers.
  • Eastern states like Chhattisgarh, Odisha and West Bengal consume much less milk than states like Rajasthan and Punjab.
• Affordability Barriers
  • The recommended daily intake of 300g is unaffordable for 70 of households who would need to spend 1030 of their monthly budget on milk.
• Overconsumption Concerns
  • Wealthier urban households consume excessive dairy, raising risks of obesity and noncommunicable diseases.

Policy Recommendations

• Strengthen Milk Access for Vulnerable Groups
  • Expansion of milk provisions under POSHAN ICDS meals and take home rations.
  • Increase financial allocations and explore innovative funding social bonds CSR and cess on unhealthy foods.
  • Implement milk coupon systems in regions with strong dairy networks.
• Improve Nutrition Awareness
  • Promote milks nutritional value through Anganwadi centres, doctors and selfhelp groups.
  • Learn from Maharashtra and Bihar’s grassroots nutrition campaigns.
• Encourage Balanced Consumption
  • Use media influencers and health professionals to promote moderate milk intake.
  • Launch public health campaigns as the UK did with Change4Life Sugar Swaps, to limit excessive dairy intake.

White Revolution 2.0

Why in News?

Recently, the Ministry of Cooperation unveiled standard operating procedure (SOPs) for White Revolution 2.0, aimed at empowering women farmers and creating job opportunities. 

White Revolution 2.0

White Revolution 2.0 is a program aimed at ensuring increased milk production women empowerment and malnutrition control.
It is a sequel to the original White Revolution touted as Operation Flood that was initiated by Dr Verghese Kurien in 1970. The move transformed India from a milk deficient country into the worlds number one milk producer.

Targets and Goals

• Milk Procurement
  • Targets By the fifth year of White Revolution 2.0 dairy cooperatives will procure 100 million kilograms of milk daily. The target is to increase daily procurement from the current 660 lakh litres per day to 1000 lakh litres.

Key Initiatives Under White Revolution 20

• Margdarshika SOPs Launch
  • Margdarshika SOPs have been implemented to open 20,00,00 new multipurpose primary agricultural cooperatives (MPACs).
  • The cooperatives will be opened in panchayats where there are no cooperatives for agriculture fisheries and dairy related activities.
  • The scheme is being implemented in association with NABARD and the National Dairy Development Board (NDDB).

Empowerment of Women

• Women form an essential part of the dairy sector and more specifically of Gujarat where this industry has earned them 60,000 crore.
• White Revolution 2.0 would be all about women formalization, which would make sure that all their payments were directly deposited into their bank accounts, thus making them economically independent.

Tackling Malnutrition

• This shall ensure easy accessibility of milk and therefore benefit those children of poor and malnourished families.
• This surplus milk will translate to better nutrition, combating malnutrition in more vulnerable sections.

Synergistic Integration with Ongoing and Proposed Plans

• Building on Current Programs
  • White Revolution 2.0 integrates into schemes currently in implementation by the Government of India including the Dairy Processing and Infrastructure Development Fund (DIDF) and the National Programme for Dairy Development (NPDD).
  • As is proposed it will be added to the newer phase called NPDD 2.0 which looks forward to continue the cooperative agenda under the Ministry of Animal Husbandry and Dairying.
• Expansion of Initiative Cooperation Among Cooperatives
  • Cooperation Among Cooperatives initiative has also been expanded on a pan country basis after taking off a well performing pilot in Gujarat.
  • This will enable dairy farmers to avail of interest free cash credit through RuPay Kisan Credit Cards and micro ATMs will be provided for better financial inclusion in rural areas.
• PACS Computerisation
  • The government has introduced SOPs for the upgradation and computerization of PACS so that the PACS become more efficient and transparent in their working.

3. PM Vishwakarma Scheme

The PM Vishwakarma Scheme targets artisans and craftsmen engaged in areas of blacksmithing goldsmithing pottery carpentry and sculpting many of which comprise traditional Indian crafts. This is more of an activity for preservation of cultural heritage of India but integrates these artisans into the formal economy and global value chains. This is a Central Sector Scheme completely funded by the Government of India.

• Ministry
  • Nodal Ministry: Ministry of Micro Small and Medium Enterprises MoMSME.
  • Partner Ministries: Departments Ministry of Skill Development and Entrepreneurship Department of Financial Services Ministry of Finance Government of India.
• Launch Date
  • 17th September, 2023
• Budget
  • Allocations in budget Rs 13000 crore for 5 years 2023 to 2028
• Recognition and Facilitation
  • A PM Vishwakarma certificate and an identity card are issued to the artisans.
  • Collateralfree credit support up to Rs 1 lakh in the first tranche.
  • Till Rs 2 lakh second installment.
  • Interest rate on loans 5 concessional.
  • Skill Development and Empowerment.
• Features
  • Stipend on daily basis for the skill training Rs 500.
  • Rs 15000 grant to acquire modern tools.
• Significance
  • Empowering Traditional Artisans: Recognizes the critical role that Vishwakarmas traditional artisans play in society.
  • Global Supply Chain Integration: Provides support for artisans to be a part of the global supply chain ensuring their survival and growth despite technological advancements.

4. Domestic Workers

Context:

The Supreme Court has called for making the long standing exploitation of domestic workers the thing of the past by way of formulating a comprehensive legal framework that safeguards their rights.

Domestic Workers

Domestic workers are individuals who provide service to private households, such as cleaning, cooking, and caring for children. They can be full-time or part-time, and may even live in or outside the employer’s house.

What do domestic workers do?

• Cleaning
• Cooking
• Washing and ironing clothes
• Caring for children, the elderly, or sick people
• Gardening

What are the challenges domestic workers face?

• They are usually denied legal and social rights.
• They are usually exposed to class, race, ethnicity, or gender-based violence and discrimination.
• They are usually not recognized as workers in some countries.

What is a domestic worker according to the International Labour Organization?

• The International Labour Organization defines a domestic worker as any person who performs domestic work in an employment relationship.

Highlights of the Judgment

• Mass Exploitation due to Legal Void
  • Domestic workers lack legal protection leaving them vulnerable to low wages hazardous work conditions and excessive hours.
• The Court noted that while multiple bills were proposed from 1959 to 2017 none were enacted.

Directive for Government Action

• The Centre must establish an inter ministerial committee consisting of the Labour Women Child Development Law Justice and Social Justice Empowerment Ministries members.
• The committee will have six months to submit its report with proposals for a possible national law.

Lessons from Progressive State Laws

• Tamil Nadu, Maharashtra and Kerala have already enacted dedicated laws for domestic workers offering social security benefits maternity aid education assistance and medical reimbursement.

Growing Demand Rising Vulnerability

• With urbanization surging the need for domestic workers is higher than ever.
• Many belong to marginalized communities SC/ST,OBC,EWS making them easy targets for abuse.

5. Waqf Amendment Bill, 2024

Why in News?

The Indian Parliament has proposed the Waqf Amendment Bill 2024 with the objective of amending the Waqf Act 1995 to introduce better accountability and transparency into the functioning of Waqf boards. The main thrust of the bill is to eliminate unchecked powers enjoyed by Waqf Boards under the present regime which gives them the freedom to declare any property as Waqf without due checks.

Major Changes in the Waqf Act Amendment Bill 2024

• Transparency Provisions
  • The Bill provides for around 40 amendments, which require verification of all property claims by the Waqf Boards thereby making it transparency oriented.
• Women’s Representation
  • Sections 9 and 14 of the Waqf Act 1995, are going to be amended to change the composition of the Waqf Board with women representatives.
• New Verification Process
  • New procedures for verifying Waqf properties in the resolution of disputes and avoidance of misuses which may be overseen by district magistrates,.
• Limited Powers of Waqf Boards
  • The amendments are to the issues of Waqf Boards unlimited powers that have created disputes and claims over surplus land like, the one from the Tamil Nadu Waqf Board claiming Thiruchendurai village largely Hindu in September 2022.

Criticisms of the Waqf Act Amendment Bill, 2024

• Waqf Boards will lose power
  • Amendments curtail the powers of Waqf Boards and their ability to control Waqf properties.
• Injury to Minority Rights
  • It may be said that the amendments may cause an injury to the interest of Muslim communities which have relied on Waqf properties for religious and charitable purposes.
  • Articles 29 and 30 of the Indian Constitution protect the rights of minorities.
• Increasing Government Interference
  • The introduction of district magistrates and added oversight will likely result in excessive bureaucratic interference.
• Erosion of Religious Autonomy
  • The intervention of the government officers in managing Waqf properties is viewed as an invasion of religious autonomy.
• Risk of Higher Conflicts
  • The process of verification itself and the interference of the district magistrates in this regard would give rise to conflicts and tangles.

What is the Waqf Act 1995?

A Waqf is the irrevocable donation of moveable or immovable property for religious pious or charitable purposes as recognized under Muslim law.
Earnings of Waqf properties are used for educational institutions, mosques graveyards and shelter homes.

History

Waqf Act was enacted in 1954 and were repealed in 1995 which subsequently augmented more powers to the Waqf Boards. Again an amendment introduced in the year 2013 empowered the Waqf Boards to pronounce with great authority the properties to be treated as Waqf Property.

• Waqf Properties Administration
  • A mutawali supervises the usage of Waqf properties. The trusts under the Indian Trusts Act 1882 are not perpetual while Waqfs are supposed to be so.
• Waqf Boards
  • Waqf Boards are legal entities that can own hold and transfer property. They can institute or defend suits in Court and supervise the administration of Waqf properties.

The Central Waqf Council CWC was established in 1964 as a supervisory body for Waqf Boards at the State level

Waqf Properties in India

• There are 87 lakh Waqf properties in India spread over an area of 8 lakh acres. That puts the Waqf Board third in the list of the largest landowners in the country.
• These properties fetch the Board a revenue of Rs 200 crore annually.

6. PM Surya Ghar Scheme

Context:

Nearly a year after the Centre launched the ₹75,000-crore PM Surya Ghar scheme, 8.5 lakh households have installed rooftop solar connections, Union Minister for New and Renewable Energy Pralhad Joshi said.

PM Surya Ghar: Muft Bijli Yojana

The Indian government launched the PM Surya Ghar: Muft Bijli Yojana, seeking to enhance the solar rooftop capacity and empower the residential households with the ability to generate their electricity. The program is to be implemented by a National programme Implementation Agency and State Implementation Agencies.

• Launch Date
  • 29th February, 2024
• Budget Allocated
  • Rs 75,021 crore.
• Ministry
  • Ministry of New and Renewable Energy (MNRE)
• Features
  • Subsidies 60% of solar unit cost, if the systems capacity is within 2kW.
  • 40% subsidy on additional system cost for systems between 2 to 3kW capacity.
  • Capacity capped at 3kW.
• Eligibility
  • Indian citizens, suitable-roofing houses, valid electricity connection, no other solar panel subsidies.

7. Labour Code Implementation and Reforms

Context:

Setting the stage for the possible implementation of the four Labour Codes from April 1, a meeting of the officials and Ministers of the Union Labour Ministry and State Labour Ministries has reviewed the progress in drafting of rules under the Codes by the States.

Key Highlights:

• Harmonised Draft Rules by States and UTs
  • All 36 states and Union Territories UTs are expected to pre publish harmonised draft rules in alignment with the four new labour codes by March 31, 2025.
• Current Progress
  • 18 states,UTs have already implemented most reforms.
  • 32 states,UTs have prepublished the draft rules while others are making satisfactory progress.

Objective of the Labour Code Reforms

• Ease of Doing Business
  • The new rules aim to simplify compliance and reduce burdens on businesses.
• Decriminalisation
  • Reforms seek to de-criminalise certain labour related offences making regulations more business friendly.
• Promoting Women Participation
  • The changes are designed to encourage greater female workforce participation.
• Better Employment Outcomes
  • The ultimate goal is to create a more labour friendly ecosystem, fostering better working ,conditions and employment opportunities.

Launch of Occupational Shortage Index (OSI)

• Purpose
  • The Occupational Shortage Index is designed to help match labour market demand and supply leading to more effective employment outcomes by identifying sectors with skill shortages.
• Impact
  • This initiative aims to align workforce training with actual market needs.

E-Shram Microsite for Unorganised Workers

• Multilingual Platform
  • A new multilingual microsite was launched to provide unorganised workers with easy access to welfare programmes from both the central and state governments.
• Goal
  • To ensure seamless registration and access to government support for unorganised workers promoting inclusivity and social security.

Key Benefits of Labour Code Reforms

• Improved Regulatory Framework
  • The reforms will create a more streamlined and efficient system for labour management.
• Support for Businesses
  • By reducing compliance burdens and improving ease of doing business the reforms are expected to foster a more entrepreneur friendly environment.
• Social Security
  • The new regulations are designed to ensure better welfare for workers especially those in the unorganised sector.

Labour Code Reforms Impact on Businesses and Workers

Business Impact

• Simplified Compliance
  • Harmonization of labour codes, streamlines regulations, reducing paperwork and bureaucratic delays.
• Single window Clearance
  • Businesses can comply with a single set of rules reducing paperwork and bureaucratic delays.
• Online Portals
  • Digital submission of compliance records through online portals like the EShram microsite.
• Reduction in Compliance Burden
  • The reforms reduce the administrative burden on businesses particularly SMEs as well who faced complex and overlapping regulations.
• Saving Costs
  • Decriminalization of specific offenses reduces the legal expenses and risks for businesses.

Encouragement of Investment and Growth

• Foreign Investment
  • Simplification of the regulatory regime makes an environment more appealing to foreign investors for the business ecosystem in India.
• Business Growth
  • Streamlined compliance reduces bureaucratic hassle, enabling business growth and new initiatives.

Effects on the Workers

• Better Welfare and Social Security
  • The roll out of E-Shram microsite gives better security to India’s unorganized workers recognizing it as a gender inclusive interface.
• Decriminalization and Empowerment of Workers
  • Government works on shielding the working class from harassment by decriminalizing minor violations of labor laws.

8. Pinaka Multi-Barrel Rocket Launcher

Context:

In a major boost for the indigenous Pinaka multi-launch artillery rocket systems, the PM Narendra Modi-led cabinet committee on security cleared two major deals worth around Rs 10,200 crore for its lethal ammunition.

Pinaka Multi-Barrel Rocket Launcher

Pinaka is a multi-barrelled rocket launcher designed and developed by the Defence Research and Development Organisation (DRDO) for the Indian Army. The rocket has a maximum range of 45 km, and one launcher can fire 12 HE rockets in 44 seconds. Pinaka is mounted on a Tatra truck and was quite effective during the Kargil War in neutralizing Pakistani positions. It has been inducted in large numbers in the Indian Army since then.

Banking/Finance

1. Policy Considerations for Cooperative Banks

Context:

The banking sector unions, under the aegis of the All India Bank Employees’ Association (AIBEA), have sought exemption from income tax on profits of cooperative banks in the upcoming Union Budget.

What are Cooperative Banks?

Key Demands:

• Tax Exemption for Cooperative Banks
  • Cooperative banks are not for profit entities and surplus is distributed among members.
  • Taxing them contradicts cooperative principles and reduces funds for expansion.
• Historical Context
  • Previously exempt from income tax but the UPA government removed the exemption.
• Potential Impact
  • More capital for expansion and digital banking investments.
  • Stronger financial support for rural credit small businesses.
  • Revenue loss for the government making full exemption unlikely.

Recapitalization of Cooperative Banks

• Why Its Needed?
  • Many cooperative banks face capital shortages affecting lending capacity.
  • Requires investment in core banking solutions (CBS) digital infrastructure. It will enable banks to comply with RBI norms and improve financial stability.
• Vaidyanathan Committee Recommendations
  • Recapitalization should be conditional and limited to wellgoverned banks Both Central State governments must contribute Possible Government Response Selective recapitalization for financially sound banks.
  • Funds could be tied to reforms governance enhancements.

Revocation of the 2020 Banking Regulation Amendment (AIBEAs) Objection

• It permits cooperative banks to accept deposits from the public bringing them closer to being commercial banks.
• The amendment was targeted to improve governance transparency.
• A rollback is unlikely as it aligns cooperative banks with modern banking practices.

Source: Business Standard

2. Truth.Fi

Context:

Truth Social parent Trump Media and Technology Group said its board of directors has approved the launch of a financial services and fintech brand Truth.Fi, sending shares of the firm up over 11 per cent in early trading.

The firm board has also authorized an investment of up to $250 million through Charles Schwab as it seeks to diversify its cash holdings, which exceeded $700 million at the close of the previous year. 

What is Fintech?

Economy

1. India’s Economic Slowdown

Context:

Recent GDP estimates reveal that India’s economic growth is weaker than projected. Capital expenditure continues to increase but private consumption and investment remain sluggish. We look at economic trends since 1991 and compare them with the high growth period of 2004-2011 to understand this slowdown.

What is Economic Slowdown?

An “economic slowdown” is described as a period where the rate of economic growth drops dramatically; such a period has been generally marked by growth in GDP at a country, largely associated with declining consumer spending, lower business investments, and increasing unemployment though without the full ferocity of a recession; it describes a halt in economic activity compared to previous periods.

Key Observations on Growth Trends

• 1991-2004
  • Post liberalization growth with rising income inequality.
• 2004-2011
  • High growth with a decline in absolute poverty due to social sector spending.
• 2011-2023
  • Economic slowdown worsened by major shocks like demonetization, GST and COVID19.

What Drives Growth during 2004-2011?

• The bottom 80 rising consumption led to sustained demand growth.
• Increase in social spending with MNREGA rural development schemes and welfare Rising rural wages raise the consumption of mass consumption goods.

Current Economic Challenges

• Weak Private Investment
  • Firms are reluctant to invest due to low demand Capex oriented policies. The government has been focusing on big ticket infrastructure projects but that hasnt triggered the economy as expected..
• Declining Social Sector Spending
  • Fiscal expenditure has become skewed away from direct income support.

What Needs to Be Done?

• Increase Revenue Expenditure
  • More spending on social services such as education health and welfare to raise demand.
• LabourIntensive Capital Investment
  • Infrastructure projects should have employment generation as the top priority.
• Expand Welfare Programs
  • Safety nets of income transfers and employment programs have to be strengthened.

2. National Critical Mineral Mission

Context:

The Indian Cabinet has cleared the National Critical Mineral Mission, with an outlay of Rs.34,300 crore, focusing on attaining self reliance in critical minerals. The ministry will implement this mission over the next seven years i.e. from 2024 to 2031 concentrating on the full value chain from exploration to recovery of critical minerals.

• Ministry
  • Ministry of Mines

Key Highlight:

• Total Investment
  • Rs.34,300 crore including Rs.16300 crore government outlay 2600 crore budgetary support and 18000 crore expected from public sector undertakings PSUs.
• Mission Goals
  • Enhance exploration efforts and support mining of critical minerals.
  • Focus on beneficiation processing and recovery of critical minerals.
  • Create a self reliant strategy for critical minerals in India.
• Incentives Approvals
  • Incentives for exploration and recovery from overburden and tailings in terms of financial.
  • Fast track regulatory approval process for mining projects.
  • Target 1200 exploration projects and over 100 critical mineral blocks for auction by FY31.

Focus on Foreign Resources

• Overseas Acquisitions
  • The government will encourage PSUs and private companies to acquire critical mineral assets abroad including lithium deposits in Argentina.
• International Partnerships
  • Building of critical mineral partnerships with resource rich countries and the incorporation of critical minerals in trade agreements.

Supporting Infrastructure and Innovation

• Establish mineral processing parks and promote recycling of critical minerals.
• Facilitate research and innovation, filing patents and developing a Centre of Excellence on Critical Minerals.

Source: The Hindu

3. India’s 2025 Economic Growth: Moody’s

Context:

Moody’s Analytics has outlined the challenges and expectations for India’s economy in 2025 forecasting a 64 GDP growth despite a weak rupee declining foreign investment and volatile inflation.

Key Highlights:

• Growth Forecast
  • Moody’s Analytics anticipates 6.4% GDP growth for India in 2025 requiring strong policy support to overcome economic headwinds.
• Target Fiscal Deficit
  • The Budget for FY25 will target a fiscal deficit of less than 4.5% of GDP by the next year that is compared to a target of 5.6% in FY24 and an estimated 4.9% in FY25.
• Economic Risks
  • The major risks to India’s economy in 2025 include the following
    • A slumping rupee
    • Deteriorating foreign investment
    • Blurred inflation

Policy Response

• Fiscal and Monetary Adjustments
  • Moody’s suggests fiscal and monetary policies are expected to need changes mainly in the first half of the year to achieve the 6.4% growth target
  • The government is likely to support domestic demand as well as investment key drivers in a growth scenario particularly facing external challenges.

4. Annual Survey of Unincorporated Sector Enterprises

Context:

The unincorporated manufacturing sector in India has not been able to recover employment levels to pre 2020-11 levels according to the latest data from the Annual Survey of Unincorporated Sector Enterprises and the 67th National Sample Survey Experts believe that a combination of policy shocks has impeded growth and employment in this sector.

Key Highlights:

Employment Trends

• Lower Employment in 2023-24
  • Employment in the manufacturing sector continues to be below 2020-11 levels. For example employment for 337 million workers was recorded in 2023-24 while in the previous reference period 2010-11 it was 349 million. The policy shocks such as demonetisation GST and COVID19 lockdowns have prolonged the work of bringing the employment levels back.

Growth in Establishments

• Number of Establishments increased
  • As a consequence while employment has not gotten back to the previous levels the number of manufacturing establishments has managed to rise up to 2014 million in 2023-24 from 172 million recorded in 2010-11.
  • The jump is primarily because of an increase in own account enterprises (OAEs) or in simple words self employed individuals or households who do not hire regular fulltime employees.
  • OAE has increased its share to 883 in 2023-24 from 838 in 2010-11.

Own Account Enterprises OAEs Emergence

• Impact of OAEs on Employment
  • The OAEs are typically characterized by low employment as they represent smallscale operations with no regular hired workers. Thus while the number of establishments has risen overall employment is low.

Policy Impact

• Policy Shocks Their Long Term Impact
  • Experts believe that the unincorporated sector has been suffering the most during the changes in the economys successive economic policy. The factors which have caused stagnation of employment at higher levels in the sector include demonetisation in 2016 the onset of GST and COVID19 lockdowns.

How Do MSMEs Contribute to Employment?

• Role of MSMEs for Employment
  • Micro Small and Medium Enterprises (MSMEs) especially in the unorganised sector are the largest providers of nonfarm employment. However MSMEs in the unincorporated manufacturing sector face difficulties due to the structural challenges and lack of significant growth which affects employment creation.

“Own Account Enterprise” (OAE)

An “Own Account Enterprise” (OAE) refers to a business that is entirely run by its owner(s) without employing any hired workers on a regular basis; essentially, a self-operated enterprise with no paid employees, making it a key component of the informal sector in many economies. 

Key points about OAEs:

• No hired workers:The defining characteristic of an OAE is that it does not employ any workers on a regular basis, meaning the owner(s) perform all tasks themselves. 
• Used in economic surveys:OAEs are commonly tracked in economic surveys to understand the scale and nature of unincorporated businesses, particularly in developing countries. 
• Contrasting with establishments:When compared to “establishments” in economic data, establishments are businesses that do employ at least one hired worker. 

Example scenarios of OAEs:

• A street vendor selling food from a small cart.
• A home-based tailor stitching clothes for customers without employing any assistants.
• A small family-run shop where all family members contribute to operations without hiring additional staff. 

Agriculture

1. Ethanol Price Hike

Context:

The Cabinet Committee on Economic Affairs (CCEA) has revised the ethanol procurement price for public sector oil marketing companies (OMCs) from ₹56.58 per litre to ₹57.97 per litre for the Ethanol Supply Year 2024-25 (November 1, 2024 – October 31, 2025).

What is Ehtanol?

It is obtained by feeding various raw materials or agricultural products through fermentation, and ethanol is used as a fuel. Ethanol is renewable fuel as it can be used in the pepping of gasoline, or it can work as an octane enhancer. This is also called grain alcohol, ethyl alcohol, or simply EtOH.

These are some applications of ethanol in agriculture:

• Fuel-Ethanol
  • This is a high-octane fuel, which could be used for automobiles. Having lower evaporative emissions, it is less flammable compared with gasoline.
• Economic development
  • Ethanol production is turning into an economic engine in India creating value from such agricultural commodities as corn and sugar beets.
• Feedstock
  • Under various feedstocks such as corn, sorghum, barley, sugar cane, sugar beets, crop residues, wood, and grasses, various feedstocks produce ethanol.
• Byproducts
  • Some byproducts include corn oil, protein feeds, and distillers dried grains (DDG). These are produced from processes of ethanol production. The last one is treated as part of animal feed.

2. Privatization of Smaller Fertilizer Companies

Context:

The central government plans to privatize smaller state-owned fertilizer companies in FY26. This follows previous attempts to privatize larger agrochemical firms, which faced resistance. The decision will depend on market conditions and consensus among stakeholders.

Background of Previous Divestment Plans

Earlier Divestment Attempts:

• In 2022, Niti Aayog shortlisted eight fertilizer companies for privatization, but the plan was shelved in 2023.
• The government chose to focus on strengthening domestic production and achieving self-sufficiency in fertilizer production instead of pursuing large-scale privatization.

Fertilizer Companies to be Privatized

• Brahmaputra Valley Fertilizer Corp. Ltd
• The Fertilizers and Chemicals Travancore Ltd
• FCI Aravali Gypsum and Minerals India Ltd
• Madras Fertilizers Ltd
• National Fertilizers Ltd
• Rashtriya Chemicals & Fertilizers Ltd
• The Fertilizer Corp. of India Ltd
• Hindustan Fertilizer Corp. Ltd

Privatization Reasons and Concerns

Prospects of Privatization

• Increased Funds
  • Privatization could raise funds to address food security issues and help reduce the fertilizer import bill.
  • The government is now focusing on smaller firms for privatization, as attempts to privatize larger units failed previously.

Concerns of Privatization

• Efficiency vs Accessibility
  • While privatization may bring greater efficiency to the fertilizer industry, there are concerns about price volatility and reduced accessibility for farmers.
  • Farmers rely on affordable fertilizers to maintain food security, so privatization could potentially increase the cost of fertilizers for them.
• Balancing Approach
  • Experts suggest a more cautious approach that combines strategic reforms, technological upgrades, and better management of fertilizer PSUs without full privatization. This would help maintain government control over a critical sector.

Government’s Role in Subsidy

• Reduction in Fertilizer Subsidy
  • The federal fertilizer subsidy has decreased to ₹1.64 trillion in FY25, down from ₹1.88 trillion in FY24.
  • Subsidies play a crucial role in keeping fertilizer prices affordable for farmers, which in turn supports agricultural productivity and food security.

Fertilizer Industry Impact and Import Bill Reduction

• Self-Sufficiency in Urea Production
  • India aims to achieve complete urea self-sufficiency by FY26 by reviving domestic fertilizer units.
  • Urea imports have already reduced: from 7.57 million tonnes in FY23 to 7.04 million tonnes in FY24.
• Revival of Fertilizer Units
  • Key fertilizer plants like Ramagundam, Gorakhpur, Sindri, Talcher, and Barauni are being revived to boost urea production.
  • These plants are being upgraded through joint ventures to establish new ammonia-urea plants with a production capacity of 1.27 million metric tonnes per annum.

Source: Mint

3. AGRI-FINTECH

Origin

The earliest documented use of the term dates back to 1967, appearing in an article in The Boston Globe titled “Fin-Tech New Source of Seed Money.” This piece reported on a startup investment company established by former executives of Computer Control Company, aimed at providing venture capital and industry expertise.

About

• Ministry:
  • The Ministry of Agriculture and Farmers Welfare (MoA&FW) 
• Agriculture has been the backbone of economies for centuries, but over time, it has faced numerous challenges—from unpredictable weather patterns and changing market demands to issues like financing and inefficient resource use.
• In recent years, Agrifintech, the intersection of agriculture, finance, and technology, has emerged as a powerful force to address these challenges.
• By combining advancements in Fintech (Financial Technology) and AgTech (Agricultural Technology), agrifintech solutions are transforming the agricultural landscape.

What is Agrifintech?

• Agrifintech refers to the use of innovative financial services and technological tools to support and improve the agricultural sector.
• By leveraging fintech solutions such as digital payment systems, mobile banking, blockchain, and data analytics, agrifintech is making it easier for farmers to access capital, manage risks, and optimize productivity.

• The primary objective of agrifintech is to make financial services and technology accessible and affordable to farmers, especially smallholder farmers who have limited access to traditional banking services.
• Agrifintech is playing a crucial role in driving financial inclusion, improving productivity, and creating more resilient agricultural systems.

Read more>>

Facts To Remember

1. Smith storms into 10,000-run club, joins legends Tendulkar, Ponting

Steve Smith joined a select group of batters to reach 10,000 Test runs on day one of the opening Test against Sri Lanka in Galle. Smith started the match on 9,999 runs and pushed for a single off Prabath Jayasuriya to be the 15th player and fourth Australian to the milestone, joining Ponting, Border and Steve Waugh.

2. Tilak rises to No. 2 in T20I rankings; Varun enters top five

Tilak Varma climbed one spot to second, while mystery spinner Varun Chakaravarthy made a massive leap of 25 places to break into the top five in the latest ICC men’s T20I rankings released. 

3. Sri Lanka u-19 ends Australia’s unbeaten run ahead of semifinal

Sri Lanka posted a 12-run victory over Australia in the ICC U-19 Women’s T20 World Cup.

4. US trade deficit hits record high in Dec as imports rise

The US trade deficit in goods widened to a record high in December, likely as businesses front-loaded imports of industrial supplies and consumer goods in anticipation of broad tariffs from President Donald Trumps new administration. 

5. EU seeks ban on imports of Russian primary aluminium

The European Commission proposed banning imports of Russian primary aluminium and restricting sales of video game consoles to Russia in a 16th package of sanctions over its invasion of Ukraine, a document seen by Reuters showed.

6. 30 dead, 60 injured in stampede as crowds surge at Maha Kumbh

Thirty people were killed and at least 60 injured in a stampede at the Maha Kumbh here on Wednesday. Authorities said pilgrims waiting for a dip at the Sangam at the auspicious hour were trampled after a barricade collapsed amid the surge of a massive crowd on Akhara Marg and people rushed to the other side.

7. SEBI bars finfluencers from using live or recent stock market data in educational content

The Securities and Exchange Board of India (SEBI) has barred financial influencers (finfluencers) from using live or recent stock market data in educational content.

8. Digital payments rise 11.1% Y-o-Y in September 2024: RBI data

Digital payments across India recorded a double-digit jump of 11.1 per cent year-on-year (YoY) as of September 2024, according to the Reserve Bank of India’s (RBI) index.

9. India to develop its own AI foundational model: Ashwini Vaishnaw

Electronics and IT Minister Ashwini Vaishnaw has said that India will create its foundational model of AI in the coming months. 

10. Nation pays homage to Mahatma Gandhi on 77th Death Anniversary, Martyrs’ Day

The Nation is paying homage to Mahatma Gandhi on his 77th Death Anniversary and Martyr’s Day Ceremony today. On this occasion, a Sarva-Dharma Prarthana was held at Gandhi Samadhi, Rajghat in New Delhi this morning.

11. Joint Committee on Waqf (Amendment) Bill, 2024 to submit report to Lok Sabha Speaker

The Joint Parliamentary Committee on the Waqf Amendment Bill, under the chairmanship of MP Jagadambika Pal, submitted its report to Lok Sabha Speaker Om Birla today in Parliament House.

12. Rich McCormick to join Ro Khanna as co-chair of bipartisan Congressional Caucus

Democratic US lawmaker Ro Khanna has announced that Republican colleague Rich McCormick will join him as the co-chair of the bipartisan Congressional Caucus on India, replacing Mike Walz, who is now the National Security Adviser to President Donald Trump.