2-Sep-2021: Union Agriculture Minister addresses the 16th sustainability summit 2021 of the Confederation of Indian Industry (CII)

The Union Minister of Agriculture and Farmers Welfare, Shri Narendra Singh Tomar said that the government is committed to addressing various challenges faced by the agriculture sector including climate change. Due to severe climate imbalance, some regions are facing droughts while others are struggling to control floods. The Minister said the government is serious about such adverse climatic conditions and our scientists are also working very diligently to develop innovative seed varieties which are compatible with such climatic conditions. Shri Tomar said this while addressing the 16th sustainability summit 2021 of the Confederation of Indian Industry (CII) as the Chief Guest today.

Shri Tomar said that the Azadi Ka Amrit Mahotsav is being celebrated on the call of Prime Minister Shri Narendra Modi to mark the completion of 75 years of independence. During COVID crisis, India on its part has extended all possible support to other countries. He said the vaccination drive against Coronavirus is also going on in full swing in the country and 66 crore doses have been inoculated in the country so far.

The minister added that despite the Covid 19 pandemic, Indian Farmers with their hard work could achieve bumper production. India being an agricultural country, the contribution of the agriculture sector to the GDP has always been significant. Shri Tomar said that under the Pradhan Mantri Kisan Samman Nidhi, so far about 1,57,000 crore rupees have been deposited in the bank accounts of more than 11 crore farmers of the country.

The Minister said that the Prime Minister has launched the Production Linked Incentive (PLI) scheme, which will prove beneficial for other industries including food processing. In order to make agriculture profitable for small and medium farmers, infrastructure is being developed near the farms as part of the concrete steps of the government. In this regard, Agriculture Infrastructure Fund of Rs one lakh crore rupees has been created, through which projects are being sanctioned. Projects of more than Rs four thousand Crore have been approved. 10 thousand Farmer Producer Organizations (FPOs) will be formed in the country under the new scheme of the Center, the work of which has started. The scheme will provide better market to the farmers and enhance their income. It is a matter of pride for the country that we have cracked into the top ten list of agricultural produce exporters and we want to further enhance it. For the benefit of the farmers, the agriculture sector is being connected with state-of-the-art technology. Along with more than seventy Kisan Rail in the country, farmers are also being benefited through Udaan Yojana.

Shri Tomar said that the Central Government, which is committed for the upliftment of the farmers, has brought the Agriculture Reforms Act, which will bring about a radical change in the field of agriculture. With the new farm laws, the whole country will be an open market for the farmers. The private sector can also now invest in modern agri-business platforms, setting up post-harvest facilities like godowns-cold storage. This will pave the way for better facilities for the farmers at lower charges. It is very important for the development of agriculture sector. These reforms have created substantial investment opportunities and have tried to bridge the gaps. Shri Tomar said that India shares cordial relations with Denmark, it has been the constant endeavor of Prime Minister Shri Modi ji that both the countries share knowledge and technology of each other.

The conference was also addressed by Denmark's Environment Minister Ms. Lea Wermelin and CII Director General Mr. Chandrajit Banerjee and Chairman of the Advisory Council (Center of Excellence for Sustainable Development) Mr. Sanjiv Puri. Many entrepreneurs virtually participated in the program.

5-Jun-2019: CII brings out Fiscal Performance Index to assess quality of Budgets

The Confederation of Indian Industry (CII) unveiled a new assessment of Fiscal Deficit that better measures the Government’s revenue and expenditure balance. The composite Fiscal Performance Index (FPI) developed by CII is an innovative tool using multiple indicators to examine quality of Budgets at the Central and State levels.

It is important to study diverse sources of revenue and expenditure heads to truly assess the fiscal situation of a nation. A single criterion such as the ‘fiscal deficit to GDP ratio’ does not tell us anything about the quality of the Budget. Hence, the Government should use multiple indicators to measure the quality of Budgets at the Central and the State levels rather than a single indicator.

According to CII, such a comprehensive measure of fiscal conditions can better help target Government’s social and capital expenditures keeping in mind fiscal stability. It would also contribute to strategy formulation to manage economic development with macroeconomic prudence.

As per the CII FPI, expenditure on infrastructure, education, healthcare and other social sectors can be considered beneficial for economic growth. At the same time, tax revenues are sustainable sources of revenues for the Government as compared to one-time income sources.

In view of the results obtained from our analysis, we recommend that the Fiscal Responsibility and Budget Management (FRBM) Act which sets targets for the governments to reduce fiscal deficits should not solely focus on one component. Instead, a holistic performance of all entities viewed from all angles of expenditure quality, revenue receipts quality, and fiscal prudence should be taken into consideration.

The proposed composite index of fiscal performance evolved by CII comprises of six components for holistic assessment of the quality of Government Budgets. These include:

1. Quality of revenue expenditure: measured by the share of revenue expenditure other than interest payments, subsidies, pensions and defence in GDP,
2. Quality of capital expenditure: measured by share of capital expenditure (other than defence) in GDP,
3. Quality of revenue: ratio of net tax revenue to GDP (own tax revenue in case of States),
4. Degree of fiscal prudence I: fiscal deficit to GDP,
5. Degree of fiscal prudence II: revenue deficit to GDP and
6. Debt index: Change in debt and guarantees to GDP

The index is constructed using UNDP’s Human Development Index methodology. By construction, a higher value of index is indicative of an improved performance and vice versa.

CII has constructed the FPI for the period 2004-05 to 2017-18 for both the Central and State budgets (for States, the end year is 2016-17).

At the Centre, the CII analysis shows that fiscal consolidation was highest in 2007-08 while 2009-10 emerged as the worst year. After staging a recovery in 2010-11, FPI deteriorated from 2011-12 onwards till 2014-15 despite the fiscal deficit index posting an improvement. This was mainly due to poor performance of the tax revenue and expenditure quality indices (both revenue and capital).

The index started to improve from 2015-16 onwards and reached a high in 2016-17, before dipping again in 2017-18. The dip in 2017-18 was underpinned by a sharp moderation in capital expenditure despite recording an improvement in the fiscal deficit index.

At the State level, the CII calculations show that the States which are presumed to be good in fiscal health (based on fiscal deficit to GDP ratio) and fall in the high-income category such as Maharashtra, Gujarat, Haryana, etc. are not necessarily doing well on the composite fiscal performance index front.

This clearly is indicative of the inadequacy of one single criterion such as the fiscal deficit to GDP ratio in judging the overall quality of Budgets of the State governments. These States have performed poorly on the Expenditure Quality and Revenue Quality Index as compared to the other States.

On the other hand, among the low-income States, Madhya Pradesh, Andhra Pradesh, Uttar Pradesh and Bihar have shown a consistently good performance on the FPI over the years mainly due to good performance in Expenditure Quality Indices (Revenue and Capital). However, the performance of these States on the Fiscal Deficit Index has remained below average.