11 April 2023

DAILY QUESTIONS & MODEL ANSWERS

Q1. Privatizing Public Sector Enterprises (PSE) is not always the best option; it necessitates ongoing strategic planning and requires the revenue it generates to be used purely for the purpose of creating new assets. Comment. (250 words)

Paper & Topic: GS III – Indian Economy

Model Answer:

Introduction:

• The lackluster performance of many PSEs and the resulting significant fiscal deficits have brought the issue of privatization to light. Privatization should increase efficiency by putting PSEs up against market competition.
• The “transition to private legal forms” or the “partial or complete denationalization of assets” are two examples. There are many instances in which the word “privatization” is employed.

Body:

India wants to promote privatization using two strategies:

• the selling of government shares in public sector initiatives.
• the opening of previously closed sectors to private activity.

Many forms of public sector companies:

• a chronic sickness from which there is no cure.
• unstable financially, but reversible.
• prospering companies.

Having issues with privatization:

• First off, there aren’t many Indian private businesses that can buy public sector firms.
• It would be a better use of their limited financial and managerial resources for the vast majority of privately held businesses that are being put up for sale through the bankruptcy process.
• Consequently, it becomes imperative to motivate these successful multinational firms to make investments and grow in both brownfield and greenfield markets.
• A sale to foreign entities, corporations, or funds at fair or below-fair valuations has negative implications from the perspective of being “Atma Nirbhar.”
• India requires greenfield foreign investment, not takeovers, to continue.
• Employers in the public sector permit hiring preferences.
• With privatization, would halt and unnecessarily produce social unrest.

How to Proceed:

Beyond recovery after being ill for a very long time:

• The administration should wrap them up quickly and extend a hearty handshake to the workforce.
• After the machinery is, the remaining valuable land will be auctioned for scrap.
• The smart sale of these land parcels in small amounts in the coming years would provide considerable returns.
• The task would require specialized efficient capacity due to its magnitude and difficulty.
• These companies could be split off from their parent line organizations and consolidated under a single holding company.
• Only rapid asset sales and disposal should be the responsibility of this holding company.

For people who are in financial hardship but are capable of escaping it:

• In order to attract investor interest, new management should be given the legal latitude in personnel management, and Air India should ideally be made debt-free.
• As valuation rises, the government may further reduce its ownership and get more money.
• The government would generate significant money if managed properly.

For profitable businesses:

• Even if its shareholding drops below 51%, the government may still act as promoter and exercise control while selling further shares.
• The goal should be calibrated divestment to gain maximum value rather than being target driven to achieve a reduced fiscal deficit number in order to please rating agencies.
• In order to give the management more freedom to pursue their objectives and the security to take measured risks in the business sector, the term of management may also be prolonged and made more stable.

Conclusion:

• Reexamining privatization is appropriate at this time. This approach alone won’t be sufficient, nor will loan write-offs or populist gifts during election seasons. The long-term interests of the typical Indian should not be put above the desire of fast money.

Q2. The growth of livestock and dairy products can assist rural communities in improving their socioeconomic situation, particularly the working poor and landless labor. Discuss the progress of India’s dairy industry in light of current developments.

Paper & Topic: GS III – Indian Agriculture

Model Answer:

Introduction:

• The tremendous increase in milk supply brought about by concerted, collaborative efforts is referred to as the “White Revolution.” 48 years after Operation Flood, which elevated India to the position of top milk producer in the world, the country is still looking for the next big innovation in agricultural output and production. Dairy companies’ sales of milk and products related to milk have changed as a result of White Revolution 2.0, reviving the potential for a product-market mix.

Body:

Milk production in India:

• India surpassed all other countries in both milk production and consumption in 2019.
• The nation’s milk production will increase from its current level of 176 metric tonnes (mt) to 330 million metric tonnes (mt) in 2033–2034, according to Niti Aayog.
• Since 1998, India has surpassed the United States to produce 17% of all dairy products worldwide. Operation Flood, which started in the 1970s, made all of this possible.
• According to industry research company IMARC, the milk and dairy products business exceeded Rs7.9 lakh crore in 2017.
• In 2016, the milk sector alone was worth Rs. 3 lakh crore, and by 2021, it is anticipated to be worth Rs. 7.3 lakh crore.
• Milk consumption per person in India increased from 126 grams in 1960 to 359 grams in 2015.

Government initiatives for the dairy sector:

• Program for National Bovine Breeding.
• Mission Gokul Rashtriya.
• Agricultural Genetics National Center.
• The real Mark.
• National Breeding Centers for Kamdhenu.
• website for e-Pashuhaat.
• Program for National Dairy Development (NPDD).
• Program for Dairy Enterprise Development (DEDS).
• National Dairy Plan I (NDP-I).
• Fund for the Development of Infrastructure and Dairy Processing (DIDF).
• promoting the operation of dairy cooperatives and farmer producer associations (SDCFPO).

Difficulties encountered:

• Indian cattle and buffalo are some of the least productive.
• Parallel to this, there aren’t many organized dairy farms, and major funding is needed to improve the dairy industry’s standing worldwide.
• One of the main concerns is raising farm animal output.
• In an effort to increase the genetic potential of various species, only a small percentage of attempts to crossbreed native species with foreign populations have been successful.
• Also, the industry will be under a lot of pressure to respond to the demands of the expanding markets. Even if additional chances for consumers to engage in international trade will be made available by globalization, strong standards for food safety and quality will still be required.
• Access to markets is crucial for accelerating commercialization. Lack of market access may deter farmers from using more cutting-edge equipment and high-quality inputs.

What must be done:

• The amount of market share that dairy companies can achieve will depend on how well they employ their resources and expertise in light of the opportunities and risks presented by emerging market economies.
• Contract/corporate dairying and developing global dairy commerce need to enlist dairy supply chains actors to expand their reach and “on-the-go” product positioning into the target market.
• Using relationship/value-based marketing, dairy companies using digital technology must identify their complementary partners and competitors in order to co-create through process and product innovation.
• Big dairy corporations and start-ups may collaborate to offer technical advancements that enhance the freshness of milk and make it easier to store milk or milk products.
• promotion of cattle markets and provision of incentives for cow production through panchayat-level education and training for small- and medium-sized farms.

Support for produced milk’s logistics:

• improved veterinary facilities, especially those for artificially inseminating calves, and encouraging private sector businesses to buy dairy products made in rural areas
• Small and medium-sized farmers who want to buy cattle can apply for low-interest loans.
• encouraging rural women to engage in animal husbandry to prevent cattle from diseases like Anthrax, Foot and Mouth, Peste des Ruminants, etc.
• By offering good village-level youth training, devoted leadership, and competent management of farmer institutions, you may support the growth of dairy entrepreneurs.
• Agriculture practices, cleanliness, the quality of feed and drinking water, as well as the kind and quality of pipes, must all be taken into account in order to produce nutritious milk.

Conclusion:

• The actions of the government can ensure the dairy sector’s enduring growth and raise the incomes of millions of small and marginal dairy farmers. If the food processing sector, agriculture, research, and patents are all connected together with animal husbandry, India has the potential to become the world’s nutritional powerhouse. The crucial answer, unwavering objective, and enduring hope for both India and the rest of the world is livestock husbandry.