Economy/Economic development For IAS Main’s 2015-16
Q.1 What are the Main objectives of PRADHAN MANTRI KRISHI SINCHAYEE YOJNA (PMKSY). Discuss the need of promoting organic farming with reference to PMKSY. Ans:- The major objective of the PMKSYis to achieve convergence of investments in irrigation at the field level, expand cultivable area under assured irrigation (Har Khet ko pani),improve on-farm water use efficiency to reduce wastage of water, enhance the adoption of precision-irrigation and other water saving technologies (More crop per drop), enhance recharge of aquifers and introduce sustainable water conservation practices by exploring the feasibility of reusing treated municipal based water for peri-urban agriculture and attract greater private investment in precision irrigation system.
The scheme also aims at bringing concerned Ministries/Departments/Agencies/Research and Financial Institutions engaged in creation/use/recycling/potential recycling of water, brought under a common platform, so that a comprehensive and holistic view of the entire “water cycle” is taken into account and proper water budgeting is done for all sectors namely, household, agriculture and industries. The programmed architecture of PMKSY aims at a ‘decentralized State level planning and execution’ structure, in order to allow States to draw up a District Irrigation Plan(DIP) and a State Irrigation Plan (SIP), which will have holistic developmental perspective outlining medium to long term developmental plans integrating three components namely, water sources, distribution network and water use application. The Government of India has taken several farmer friendly initiatives. These, amongst other things, include the following:
• A new scheme has been introduced to issue a Soil Health Card to every farmer.
• A new scheme for promoting organic farming “Pramparagat Krishi Vikas Yojana” has been launched to promote organic farming.
• A dedicated Kisan Channel has been started by Doordarshan to address various issues concerning farmers.
• Government is also encouraging formation of Farmer Producer organizations. Organic farming is a holistic production management system which promotes and enhances health of agro-ecosystem related to bio-diversity, nutrient bio-cycle and soil biological and microbial activities.
It is normally defined as a system of farming without use of chemical inputs (fertilizers/insecticides etc.) and is primarily based on principal of use of natural on farm organic inputs (like farm yard manure, green manure, oil cakes, press mud etc.) and also natural biological pest control and plant protection measures to promote agro-economic system and soil biological activity. It will increase domestic production and certification of organic produce by involving farmers. Therefore it is significant for the farmers as well as economy and environment.
Taking it further, Government is promoting organic farming through various schemes/ programmes under National Mission for Sustainable Agriculture (NMSA)/Paramapragat Krishi Vikas Yojana(PKVY), Rashtriya Krishi Vikas Yojana (RKVY), Mission for Integrated Development of Horticulture (MIDH), National Mission on Oilseeds & Oil Palm(NMOOP), and Network Project on Organic Farming of ICAR.
Q.2 Combination of integrity with MUDRA-capital will be the key to success for small entrepreneurs. Elucidate. Ans:- While there are a number of facilities provided for the large industries in India, there is a need to focus on Micro units, Hence, Micro Units Development Refinance Agency Ltd (MUDRA).,which is wholly owned subsidiary of Small Industries Development Bank of India (SIDBI), has been launched on April 8, 2015 as a Non-Banking Financial Institution (NBFI).The MUDRA is intended to provide refinance support to Last Mile Financiers (LMFs) such as Non-Banking Finance Companies (NBFCs) engaged in financing micro business etc; which are in the business of lending to micro business entities engaged in manufacturing, trading and service activities. MUDRA shall be refinancing the LMFs spread across the country, which cover both urban and rural areas and extend financial assistance to self employment, micro units as per the requirements. There is a perception that large industries create more employment, but reality is that the small enterprises have created more employment in India. And the biggest asset of the poor is his / her integrity, by combining their integrity with capital (MUDRA), it would become the key to their success – iw¡th liQyrk dk daqth gSA For example women’s self help groups in particular; the kind of honesty and integrity showed by these loan takers is seldom seen in any other sector. MUDRA scheme is aimed at “funding the unfunded”. The small entrepreneurs of India are used to exploitation at the hands of money lenders so far, but MUDRA will instill a new confidence in them that the country is ready to support them in their efforts that are contributing so heavily to the task of nation building. The established financial systems will move to the MUDRA-model of functioning, i.e. to support entrepreneurs that give employment to a large number of people using least amount of funds. The roles envisaged for MUDRA would include:
• Laying down policy guidelines for micro enterprise financing business
• Registration of MFI entities.
• Accreditation /rating of MFI entities.
• Laying down responsible financing practices to ward off over indebtedness and ensure proper client protection principles and methods of recovery.
• Development of standardized set of covenants governing last mile lending to micro enterprises • Promoting right technology solutions for the last mile.
• Formulating and running a Credit Guarantee Scheme for providing guarantees to the loans/portfolios which are being extended to micro enterprises.
• Support development and promotional activities in the sector.
• Creating a good architecture of Last Mile Credit Delivery to micro businesses under the scheme of Pradhan Mantri MUDRA Yojana.
The above measures to be taken up by MUDRA are targeted towards mainstreaming young, educated or skilled workers and entrepreneurs. The present initiative of the Government in promoting MUDRA will help in providing self-employment and financial assistance to micro units in the country. Thus, the integrity with MUDRA will be a key to success for small entrepreneurs.