Editorial 1. India’s big millets push, why it makes sense to have these grains
Recent Context
- The Union Budget has accorded high priority to millets grains such as jowar, bajra, ragi citing their health benefits.
- During the budgetary speech, Finance minister said that “We are the largest producer and second largest exporter of ‘Sree Anna’ (millets) in the world… The Indian Institute of Millet Research-Hyderabad will be supported as the Centre of Excellence for sharing best practices, research and technologies at the international level,”
India’s millets push
- Two years ago, the UN General Assembly adopted India’s resolution to declare 2023 as the International Year of Millets.
- Through the year, several central ministries and government organisations will work towards promoting this “nutri cereal”.
- Delegates at G20 meetings will be given a “millet experience” through tasting, meeting farmers, and interactive sessions.
- Union Health Minister Mansukh Mandaviya has said that food regulator Food Safety and Standards Association of India (FSSAI) will formulate guidelines to include millets in the food menu of schools, hospitals, and government canteens.
- All India Institute of Medical Sciences are working to set up a “millets canteen” to produce millets-based foods from March onward
- The government also intends to increase procurement of these grains under the public distribution system.
- Agriculture Minister Narendra Singh Tomar said last year that it was time for public distribution programmes to focus on a more diverse food basket to improve nutritional status.
Where are millets produced (and consumed)?
- Jowar is mainly grown in Maharashtra, Karnataka, Rajasthan, Tamil Nadu, Andhra Pradesh, Uttar Pradesh, Telangana, and Madhya Pradesh. In 2020-21,
- the area under jowar stood at 4.24 million hectares, while production was 4.78 million tonnes.
- Maharashtra accounted for the largest area (1.94 mn ha) and production (1.76 million tonnes) of jowar during 2020-21.
- Bajra is mainly grown in Rajasthan, Uttar Pradesh, Haryana, Gujarat, Madhya Pradesh, Maharashtra and Karnataka.
- Of the total 7.75 mn ha under bajra in 2020-21, the highest (4.32 mn ha) was in Rajasthan. The state also produced the most bajra in the country (4.53 million tonnes of the total 10.86 million tonnes) in 2020-21.
- The consumption of millets was reported mainly from these states: Gujarat (jowar and bajra), Karnataka (jowar and ragi), Maharashtra (jowar and bajra), Rajasthan (bajra), and Uttarakhand (ragi).
MSP for millets
- The government declares a Minimum Support Price (MSP) for jowar, bajra, and ragi only. For KMS 2022-23, the MSP for jowar hybrid was declared at Rs 2,970 per quintal, and that for jowar maldandi at Rs 2,990 per quintal. The MSP for bajra and ragi were Rs 2,350 per quintal and Rs 3,578 per quintal respectively
Benefits of millets
- Millets are both eco-friendly and healthier than more commonly consumed grains. They require much less water than rice or wheat, and can be grown in rain-fed areas without irrigation. Belonging to the grass family, millets tend to be more tolerant to drought and extreme weather, and can grow in poor soil and in hilly areas.
- Millets can be a healthier option to keep lifestyle diseases such as obesity and diabetes at bay. Switching out the regular grains can be especially beneficial in India, which is considered to be the diabetes capital of the world. It is projected that the country will have 69.9 million diabetics by 2025. Indians are also at a high risk of cardiovascular diseases at a young age.
- Millets have a much lower glycaemic index a measure of how much blood sugar levels spike after consuming a food item — than processed rice or wheat.
- A low glycaemic diet can help in controlling weight and blood sugar levels, consequently reducing the risk of heart disease or even cancers.
- Millets are also high in fibre content that is known to improve gut microbiota. They result in satiety faster and keeps people fuller for longer, thereby reducing the amount of food consumed.
- They are rich in micronutrients such as iron and zinc, which can help reduce the country’s burden of anaemia.
- The incidence of anaemia increased from 58.6% to 67.1% in children ages 6-9 between the two rounds of the National Family Health Survey in 2015-16 and 2020-21. In women ages 15-49, it increased to 57% from 53.1%.
- Millets also contain niacin, which is linked to lowering triglycerides and increasing HDL or good cholesterol. Millets contain no gluten and suit people with gluten allergy and irritable bowel syndrome.
Could you overdo millets?
- Millet grains should not be polished or processed like rice or wheat — doing so will raise their glycaemic index, and benefits will be lost.
Conclusion: It is the right step of government for the sustainable agriculture production along with it will help in fight against poverty, malnutrition and increase in income of farmer.
Editorial 2. Budget unclean slate
Recent Context:
- Recently Union budget 2023-24 was presented by finance minister in Parliament, much of the discussion on the Union budget has focused on the Centre’s fiscal stance and its spending priorities.
- But the documents accompanying the budget also provide useful nuggets of information about the corporate, household and government sector, and as a consequence the changing structure of the Indian economy.
The following Four broad points emerge in the Budget 2023-24
- First, the larger firms have perhaps never had it so good in recent years.
- Alongside the trend of the rising share of capital and the falling share of labour in national income, within the larger corporate universe, a few big firms now account for an outsized portion of the pie.
- In 2019-20, of the 9 lakh plus companies who had filed returns, 433 firms had reported profits (before taxes) in excess of Rs 500 crore. In 2020-21, the first year of the pandemic, this rose to 517.
- These 517 companies accounted for 62.08 per cent of total profits of the corporate sector in 2020-21. Add to this the 1,558 companies whose profits ranged between Rs 100-500 crore, and together these 2,075 firms (who represent just 0.2 per cent of the entire corporate sector) accounted for 77.41 per cent of all profits.
- In comparison, just a year prior to the pandemic, firms with profits exceeding Rs 100 crore accounted for 75.2 per cent of total corporate sector profits. Data on listed companies suggests that this concentration of profits is likely to have continued in the period thereafter.
- While MSMEs and the larger informal sector have been showing some signs of recovery, it is difficult to know whether this stunning concentration of economic power has reversed.
- Second, for these 517 companies, the effective tax rate works out to around 19.14 per cent, which is much lower than that for the smaller-sized companies.
- For firms with profits in the range of 0-1 crore and 1-10 crore, the tax rate was 24.82 per cent and 23.13 per cent respectively. As per the documents, these tax rate differentials imply that the larger firms have either availed of the higher deductions or incentives under the old tax regime or have shifted to the new regime of lower taxes.
- (In September 2019, the government had allowed firms to pay tax at the rate of 22 per cent, provided they did not avail of exemptions/incentives.
- And further, to attract fresh investments, new firms making fresh investments in manufacturing were taxed at an even lower rate of 15 per cent.)
- There are also indications that this regime has perhaps led to a reduction in tax disputes. The amounts under dispute which had gone up in 2020-21 from the previous year, fell in 2021-22.
- However, despite high expectations, only 3,508 companies had opted for the 15 per cent tax regime during this period. This suggests that lower tax rates were perhaps not a strong enough incentive for fresh private sector investments in the manufacturing sector.
- Third, contrary to expectations, the new personal income tax regime has, so far, not seen much traction. But it is possible that the changes now being proposed will improve its attractiveness. Migration to the new regime will depend on the extent to which individuals take advantage of the existing exemptions.
- Broadly speaking, there are four major exemptions that individuals avail of under chapter VI-A, section 80 of the Income Tax Act these are for investments, health insurance, the new pension scheme, and payment of rent.
- The revenue foregone by the government on these items ranges from Rs 74,937 crore on investments to Rs 4,810 crore on pension, Rs 6,444 crore on health insurance and Rs 1,361 crore on rent.
- Back of the envelope calculations suggest that if a salaried taxpayer is availing of exemptions for investments and medical insurance, then the switching point will perhaps be a little less than Rs 9 lakh.
- However, the more the exemptions are availed, higher will be the income threshold at which the individual will want to switch to the new tax framework.
- But, considering that very few taxpayers actually use all these exemptions the revenue foregone by the government provides some sense of how widely used each of these exemptions are there is a strong possibility that more taxpayers will gravitate towards the new tax regime.
- Though, to what extent, will also be tempered by individual expectations of wanting to avail these exemptions in the future. This will have implications for the consumption spurt that government officials anticipate from this switch.
- Fourth, the larger public sector, comprising of central and state governments and central public sector enterprises, now accounts for a much bigger share of overall investment activity in the economy than before.
- At the end of 2022-23, capital expenditure routed through the Union budget, coupled with the resources of state governments and central PSUs directed towards capital spending, would be just shy of a quarter of all investments (gross fixed capital formation) in the economy.
- Their share is up by roughly 5 percentage points since 2014-15. In the coming year, if state governments were to just match the central government’s budgeted increase in capex state governments have in the past tended to allocate more for capital expenditure than the Centre then it is likely that the share of the public sector in total investments in the economy would inch closer to 30 per cent.
Conclusion:
- Despite record profits accruing to the larger firms despite lower tax rates for both the corporate and the household sectors and despite the ramp-up in capital spending by the public sector, a broad-based recovery in private sector investments and consumption has not materialised.
- Therefore. It is need of hour that private sector should play active role in investment, economic growth and employment generation within the economy with the changing structure of the Indian economy.