1) Centre Sets Minimum Support Price for Kharif Crops: The Indian government has approved the Minimum Support Price (MSP) for kharif crops for the 2023-24 season, aiming to provide fair remuneration to farmers.
However, concerns have been raised by farmers’ organisations regarding the increase not keeping up with rising input costs.
Concerns of the Farmers:
- Inadequate Cost Consideration: cost of production used by the CACP to calculate the MSP (A2+FL costs) does not include all the expenses incurred by the farmers such as rent of land, interest on loans, family labour, etc.
- Lack of Market Reflection: MSP does not reflect the actual market conditions and the inflationary trends.
- Doubts over Procurement Mechanism: doubts over the availability of adequate infrastructure and storage facilities.
- Regional Disparities and Crop-Specific Issues: MSP benefits only a few crops and a few states, while leaving out many other crops and regions.
2) Surplus Liquidity: Recently, the net liquidity in the banking system in India increased to Rs 2.59 lakh crore on June 4, 2023. However, the surplus liquidity in the banking system is likely to decline to around Rs 1.5 lakh crore over the next few days from the current level of Rs 2.1 lakh crore.
- Surplus liquidity occurs where cashflows into the banking system persistently exceed withdrawals of liquidityfrom the market by the central bank.
- Causes: Advance tax and goods and services tax(GST) payments, the deposit of withdrawn Rs 2,000 notes, redemption of government bonds, higher government spending, the sale of dollars by the RBI to defend the rupee from depreciation.
- Impact: It may lead to increased levels of inflation, interest rates in the market will remain low.
- RBI’s measures: The RBI, under its Liquidity Adjustment Facility,infuses liquidity in the banking system via repos and sucks it out using reverse repos after assessing liquidity conditions.
3) India’s Energy Transition Through States: India’s energy transition through states plays a crucial role in achieving national targets and fulfilling global climate commitments. The upcoming G20 forum presents an opportunity for the country to propose a multiple energy pathways approach to accommodate diverse contexts.
Importance of states:
- Implementing National Targets: Tailoring strategies to local contexts, decentralized implementation.
- Addressing Legacy Issues: States play a pivotal role in addressing legacy issues plaguing the electricity sector.
- Pioneering Policy Innovations: Laboratories of innovation, influencing national policies.
- Harnessing State Resources: Leveraging localized resources, promoting distributed generation of renewable energy.
- Importance of a State-level Framework: Comprehensive understanding of energy transition plans, evidence-based policy choices, inclusive stakeholder engagement.