Farm Income Mission
- In the last year of its mission to double farmers income, the Centre admits that no actual assessment of farm income has been carried out since 2013.
- The government did not provide any details on what the base year for this goal is or what the targeted income to be achieved by the 2022 deadline was.
- Shiv Sena MP Krupal Balaji Tumane raised the issue in the Lok Sabha, asking what the base year was on the basis of which doubling would be calculated and if the government has fixed any income target for farmers for 2022.
- The Agriculture Ministry did not answer either question, instead responding with a brief on the Committee for Doubling Farmers Income, constituted in April 2016, and the strategies it recommended.
- In response to his request for State-wise, year-wise income data, and the annual growth percentage required to achieve the 2022 targets, the Ministry responded that the National Sample Survey Office’s last survey on agricultural households was conducted in 2013. “There has been no further assessment of the farmers income thereafter,” it said.
- Seven strategies had been identified: improvement in crop and livestock productivity, savings in production cost through efficient use of resources, higher cropping intensity and diversification towards high-value crops, better price realisation and a shift to non-farm jobs.
Source: The Hindu (Farm income mission off target; February 15)
Privatisation Of Public Sector Banks
- Some of the financial sector proposals unveiled by Finance Minister Nirmala Sitharaman in the Union budget are bold.
- Two public sector banks are set to be privatized.
- The Budget has proposed to set up a new structure to deal with the vexed issue of bad loans.
- To help finance long gestation infrastructure projects, a new Development Financial Institution (DFI) will be set up.
- Privatisation of bank is an acknowledgement that the government does not have the resources to keep recapitalising public sector banks.
- The government may have to bring legislative amendments to go ahead.
- Expanding the privatisation programme to other public sector banks will require the government to convince the bank employee unions.
- A bad bank to tackle the issue of bad loans will be set in the motion soon.
- An asset reconstruction and management company will be set up to take over the bad loans of banks. This will clear the banks’ balance sheets.
- Banks’ non-performing loans is expected to rise to 13.5 per cent at the end of September 2021, up from 7.5 per cent in September 2020.
- Several issues will need to be addressed:
- Who will fund the bad bank?
- At what prices will the transactions between the bad bank and the banks take place?
- Will the process be transparent?
- The budget has allocated Rs 20,000 crore to create a Development Financial Institution.
- India has experimented with DFIs before, and the experience has not been encouraging.
- DFIs like ICICI and IDBI were converted into universal banks.
Source: The Indian Express (Remaking the bank; Editorial/February 3)