CONTENTS
- Conservation Techniques for Sustainable Farming
- Empowering MSMEs Through Timely Payments
Conservation Techniques for Sustainable Farming
Context:
To meet the needs of the growing global population, farmers encounter challenges like soil erosion and water depletion in traditional agriculture. Conservation Agriculture (CA) emerges as an eco-friendly solution, efficiently utilizing natural resources for sustainable farming. CA practices not only enhance revenue but also improve resource efficiency and soil fertility, thereby necessitating an important discussion in this regard.
Relevance:
GS3-
- Agriculture
- Major Crops – Cropping Patterns in various parts of the country
- E-technology in the aid of farmers
- Food Security
Mains Question:
In the face of challenges posed by soil erosion, water scarcity and ecological imbalance, Conservation Agriculture offers a long-lasting and sustainable solution. Comment. (10 Marks, 150 Words).
Traditional Tillage Methods:
- Traditional tillage methods, involving ploughing, harrowing, and cultivating to achieve ideal soil tilth and friability, pose drawbacks despite their benefits.
- It confronts issues such as diminishing soil fertility, ecological imbalances, reduced sustainability, and water scarcity.
- Drawbacks include the depletion of soil organic matter due to exposure to air and sunlight, more frequent breakdown of soil aggregates, soil erosion, elevated production costs from increased fuel consumption and machinery wear and tear, and greenhouse gas emissions from fossil fuel combustion contributing to global warming.
- In response to the adverse effects of traditional agricultural practices, sustainable farming approaches have been introduced, aiming to conserve resources without jeopardizing the environment.
Conservation Agriculture (CA):
Processes Involved:
- Advanced zero-tillage seeders, known as zero ferti-cum-seed drills, are utilized to directly distribute crop seeds into undisturbed soil.
- Land preparation includes herbicide application and weed slashing/rolling. Unploughed fields receive organic agricultural residues, forming mulch that shields the soil from wind and rain, moderates soil temperature, and fosters microbial growth.
- Conservation Agriculture (CA) diverges from traditional practices involving ploughing and soil disturbance, opting for minimal mechanical interference with the soil.
- The primary objectives of conservation agriculture include maintaining a continuous organic soil cover to shield against the adverse effects of sunlight and rain, providing nutrients for the rapid growth of soil micro- and macroorganisms, and modifying the soil’s microclimate for optimal development.
- In CA, crops are rotated strategically to offer a varied diet to soil fauna and microflora and utilize different soil strata for nutrient and water cycling.
Advantages of Conservation Agriculture:
- When compared to no-till systems, managing organic crop residues in Conservation Agriculture (CA) leads to increased soil microbial biomass and nitrogen levels.
- CA stands out as a sustainable crop production method that mitigates soil erosion, water and land degradation, and reduces reliance on external inputs.
- This approach optimizes resource utilization, reduces production costs, and diminishes fossil fuel usage and greenhouse gas emissions.
- Diversified crop rotations promote stable root channels and macropores, enhance water infiltration, and reduce insect incidences.
- The manipulation of crop rotation, integration of organic residues, and adjustments to tillage techniques can significantly influence soil fertility by promoting soil aggregation and enhancing nutrient availability.
- By minimizing petroleum usage, CA improves ecosystem quality, soil and water conditions, decreases greenhouse gas emissions, and contributes to the mitigation of global warming and air pollution. Additionally, it streamlines labor, time, and production costs for farmers.
Conclusion:
Encouraging the adoption of CA requires a shift in the perspectives of farmers, researchers, and technicians toward sustainable production approaches, emphasizing minimal or no tillage combined with effective residue management. Socioeconomic obstacles to CA adoption encompass issues like inadequate residue management and the selection of appropriate sowing devices. Overcoming these can indeed help us in our path of sustainable agriculture along with the multiple benefits of conservation agriculture.
Empowering MSMEs Through Timely Payments
Context:
Micro, Small, and Medium Enterprises (MSMEs) are a crucial segment of the Indian economy, actively participating in both the service and manufacturing sectors. Their importance stems from their substantial impact on India’s GDP, and the government aims to increase their contribution to 50 percent in the near future. Consequently, MSMEs are rightly acknowledged as the backbone of the nation’s economy, playing a central role in its growth by providing employment to millions of unskilled and semi-skilled workers.
Relevance:
GS3-
- Growth and Development
- Mobilization of Resources
- Industrial Policy
Mains Question:
The Government has introduced various innovative measures aimed at enhancing the financial resilience of MSMEs but more needs to be done to ensure their sound fiscal management. Examine. (15 Marks, 250 Words).
Contribution of MSMEs:
- In the realm of economic output, MSMEs hold significant sway, contributing more than 29 percent to the GDP and representing half of the country’s total exports. Moreover, they account for around one-third of India’s manufacturing output.
- With an employment base exceeding 11 crores, there is a concerted effort to elevate this figure to 15 crores in the upcoming years.
Significant Initiatives:
- Recognizing the pivotal role played by MSMEs, both the central Government and the Reserve Bank of India (RBI) have introduced various schemes to support entrepreneurs in this sector.
- The Ministry of Micro, Small & Medium Enterprises (M/o MSME) aims to foster a thriving MSME sector by facilitating the growth and development of the MSME Sector, which includes Khadi, Village, and Coir Industries.
- The Micro Small and Medium Enterprises Development (MSMED) Act, enacted in 2006, was introduced to address policy issues impacting MSMEs, as well as the coverage and investment ceiling of the sector.
- The Prime Minister’s Employment Generation Programme (PMEGP) is a credit-linked subsidy scheme designed to establish new micro-enterprises and create employment opportunities in both rural and urban areas across the country.
- The Scheme of Fund for Regeneration of Traditional Industries (SFURTI) aims to organize artisans and traditional industries into clusters, providing financial assistance to enhance their competitiveness in the current market scenario.
- A Scheme for Promoting Innovation, Rural Industry & Entrepreneurship (ASPIRE) encourages innovation and rural entrepreneurship through Rural Livelihood Business Incubators (LBI), Technology Business Incubators (TBI), and a Fund of Funds for startup creation in the agro-based industry.
- The Interest Subvention Scheme for Incremental Credit to MSMEs, introduced by the Reserve Bank of India, offers relief of up to 2% interest on outstanding fresh/incremental term loan/working capital for all legal MSMEs during its validity.
- The Credit Guarantee Scheme for Micro and Small Enterprises facilitates the smooth flow of credit by providing guarantee cover for collateral-free credit extended to MSMEs.
- The Micro and Small Enterprises Cluster Development Programme (MSE-CDP) seeks to enhance the productivity, competitiveness, and capacity building of MSEs.
- The CHAMPIONS portal aims to assist Indian MSMEs in reaching the national and global league by addressing their grievances and providing support, encouragement, and assistance.
- MSME Samadhan allows MSMEs to directly register cases of delayed payments by Central Ministries/Departments/CPSEs/State Governments.
- The Udyam Registrations Portal assists the government in aggregating data on the number of MSMEs in the country.
- MSME SAMBANDH, a Public Procurement Portal, was launched to monitor the implementation of public procurement from MSEs by Central Public Sector Enterprises.
- Despite the provisions stipulated in the Micro, Small, and Medium Enterprises Development (MSMED) Act of 2006, MSMEs frequently encountered challenges, especially concerning prompt payments from larger enterprises.
- To address this issue, a provision was incorporated in the Finance Act 2023 under section 43B(h) by the then Finance Minister.
- This provision aimed to fortify MSMEs by ensuring timely payments from buyers, highlighting their role as engines of economic growth.
Timely Payments to MSMEs:
- Amid the challenges posed by the COVID-19 pandemic, MSMEs faced significant setbacks due to constrained credit cycles.
- To facilitate their recovery post-pandemic, the Government has implemented ongoing measures to strengthen the MSME ecosystem in India.
- Notably, the Finance Act 2023’s provision, section 43B(h), was extended to amounts payable to micro and small enterprises covered under the MSMED Act 2006.
- This step was taken to enhance the credit cycle of MSMEs, ensuring smoother business operations.
- Section 15 of the MSMED Act establishes a timeframe for buyers to make payments to MSMEs, underscoring the importance of prompt settlements.
- Historically, the underutilization of these provisions was often attributed to the susceptibility of micro and small enterprises compared to their medium and large counterparts.
- The introduction of section 43B(h) aimed to rectify this imbalance by mandating timely payments and imposing penalties for delays beyond specified limits.
- According to this provision, any amount owed by the assessee to a micro or small enterprise exceeding the time limit specified in section 15 of the MSMED Act 2006 would be subject to disallowance.
- Furthermore, interest for late payments, calculated at three times the Repo Linked Benchmark Lending Rate (RBLR), compounded monthly, as outlined in section 15 of the MSMED Act 2006, would also be applicable.
- It is important to highlight that buyer registration under the MSMED Act, 2006, is a prerequisite to avail the benefits outlined in section 43B(h).
- However, this provision does not cover outstanding dues to traders according to the MSMED Act’s enterprise definition.
Implications of Section 43B(H):
- The practical implications of section 43B(h) are diverse. Firstly, it ensures a more streamlined payment cycle for MSMEs, encouraging larger entities to settle dues within the specified timeframe, thereby ensuring financial stability and fostering growth.
- Secondly, it empowers MSMEs with enhanced negotiating power when discussing payment terms with larger counterparts, minimizing disputes and legal complexities.
- To qualify as micro, small, or medium enterprises under the MSMED Act 2006, specific criteria related to net investment in plant and machinery or equipment, as well as net turnover, must be met.
- It’s important to note that only micro and small enterprises are recognized as suppliers under section 43B(h), excluding medium enterprises from its scope.
- The effective implementation of section 43B(h) relies on several factors, including clear communication between buyers and suppliers, adherence to agreed payment terms, and compliance with regulatory requirements.
- Additionally, the provision requires auditors to disclose and report information promptly to ensure transparency and accountability in financial transactions.
- In summary, section 43B(h) represents a significant advancement in strengthening the MSME sector in India by promoting timely payments and improving their financial stability.
Regarding Financing Options for MSMEs:
Efforts are needed to provide financing options tailored to the specific needs of MSMEs. While initiatives like the Mudra scheme aim to bridge the financing gap for MSMEs, continuous innovation and expansion of financial instruments are essential to effectively support their growth ambitions.
Way Forward:
- However, its successful application requires collaboration among stakeholders, proactive adherence to compliance, and robust enforcement mechanisms.
- By creating a conducive environment for MSMEs to flourish, India can unleash their complete potential as drivers of economic growth and job creation.
- Despite the progressive measures, such as the Finance Act 2023’s provision under section 43B(h), challenges persist in achieving comprehensive compliance and effective enforcement.
- It is crucial for stakeholders, including MSMEs, large enterprises, regulatory bodies, and auditors, to work closely together to address these challenges and fully realize the MSME sector’s potential.
- Creating an ecosystem conducive to innovation and technological adoption is essential for enhancing the competitiveness of MSMEs in a rapidly evolving global landscape.
Conclusion:
In conclusion, despite significant progress in bolstering the MSME sector in India, continuous proactive measures are needed to address evolving challenges and unlock the sector’s full potential. Technological advancements, financial inclusion and an encouraging environment in terms of legislations can help the county in streamlining its MSME ecosystem.
