(a) Discuss the components of food processing schemes introduced by the Government of India. (10 marks) (b) Do you agree with…

(a) Food processing schemes

India’s food processing schemes aim to reduce post-harvest losses, add value, and connect agriculture with organised industry. PM Kisan SAMPADA Yojana is the umbrella scheme. Its Mega Food Park component (cluster-based processing) took no new projects after 2020-21, and its current components are Integrated Cold Chain and Value Addition Infrastructure, Agro-processing Clusters, Creation/Expansion of Food Processing and Preservation Capacities, Backward and Forward Linkages, Food Safety and Quality Infrastructure for testing, certification and standards, and Operation Greens, expanded from tomato, onion and potato (TOP) to all fruits and vegetables (TOTAL), to stabilise prices and reduce wastage. Pradhan Mantri Formalisation of Micro Food Processing Enterprises (PMFME) supports micro enterprises and self-help groups through credit-linked subsidy, seed capital and common infrastructure under a One District One Product approach, bringing informal units into the formal economy. The Production Linked Incentive for food processing rewards incremental output, encourages modern technology and helps Indian products compete globally. Together, these components create backward and forward linkages, improve farm incomes, strengthen food security, support export competitiveness, reduce regional imbalances in perishable markets, and promote rural non-farm employment in processing clusters.

(b) Foreign Trade Policy 2023-28

I partially agree that the Foreign Trade Policy 2023 (which, unlike earlier five-year policies, has no fixed end date and aims at US$ 2 trillion of goods and services exports by 2030) can boost trade and employment, but a trade surplus is unlikely: India runs a large and persistent merchandise trade deficit that its services surplus only partly offsets. The policy's shift from incentives to remission and facilitation (RoDTEP, automation, an amnesty for pending export obligations), and its Districts as Export Hubs and E-Commerce Export Hubs, can decentralise exports, reduce logistics costs and help MSMEs enter global value chains. SCOMET liberalisation may widen technology exports, while Rupee trade mechanisms can lower currency risk and deepen trade with friendly countries. These measures may generate employment through MSME linkages, services exports and value addition. However, India’s trade surplus depends on import intensity: capital goods, energy and intermediate imports remain high, and export growth may not automatically offset them. Employment gains will depend on skill development, compliance ease and MSME access to credit. Thus, the policy can improve trade competitiveness and jobs, but surplus outcomes require import substitution, energy security, stronger export diversification, better port connectivity, single-window clearance and export credit to support MSMEs and exporters abroad.

(c) PDS structural shortcomings

The PDS remains India’s largest food security programme, but its structure has persistent weaknesses. Since January 2024, foodgrains under the National Food Security Act are free for about 81 crore beneficiaries under PM Garib Kalyan Anna Yojana, and One Nation One Ration Card allows portability; even so, inclusion and exclusion errors persist because the coverage still rests on Census 2011 population data and Aadhaar seeding, biometric authentication and database updates are uneven, causing eligible poor to be denied or ineligible persons to receive benefits. Leakages and diversion remain a concern; official audits and independent studies point to physical stock losses, diversion and ghost beneficiaries, showing that physical supply chains can be inefficient. The system is cereal-centric, focusing mainly on rice and wheat, while protein and micronutrient needs remain unaddressed, limiting nutritional outcomes. Inter-state disparity in Targeted PDS implementation creates unequal access, as states differ in ration network capacity, pricing and monitoring. Digitisation gaps, including poor connectivity, weak last-mile delivery and limited data integration, weaken accountability. These shortcomings require stronger nutrition baskets, better data governance, state-specific delivery reforms and transparent grievance redressal to ensure the PDS reaches the intended poor efficiently, fairly and equitably.

(d) Disinvestment policy

India’s disinvestment policy is important because it helps the government raise resources for infrastructure and social sectors while reducing fiscal pressure. Strategic disinvestment in Central Public Sector Enterprises, now guided by the New Public Sector Enterprise Policy, 2021 (a bare minimum presence in four strategic sectors and privatisation or closure elsewhere) and illustrated by the Air India sale (2022), can improve efficiency, as experience generally shows that private participation brings better governance, technology and market discipline. It also supports Atmanirbhar Bharat by encouraging private investment in strategic sectors such as defence, energy, telecom and manufacturing, where public capacity may be limited. By reducing the government’s equity burden, disinvestment can help contain the fiscal deficit and create space for capital expenditure. It may also improve corporate governance, investor confidence and capital market development. However, the process must balance revenue needs with national interest, worker welfare and strategic autonomy. A transparent, outcome-linked disinvestment framework can make the policy a tool for growth, industrial competitiveness and public interest while avoiding fire sales that undermine strategic assets and public trust.

(e) GST and federalism

GST reforms have restructured Indian federalism by introducing concurrent taxation under Article 246A, where Centre and states levy tax on goods and services. This has strengthened cooperative federalism through the GST Council, where states have a two-thirds voting weight and the Centre one-third, with decisions needing a three-fourths majority, so neither side can prevail alone; the Supreme Court in Mohit Minerals (2022) held the Council's recommendations to be persuasive rather than binding. The 2025 rate rationalisation (two main slabs of 5% and 18%, with a 40% rate for sin and luxury goods) was agreed through this forum. But it has also eroded states’ independent indirect taxation powers and fiscal autonomy. The Fifteenth and Sixteenth Finance Commissions have highlighted vertical and horizontal fiscal imbalances (the Sixteenth retained the states' share of the divisible pool at 41%), as states bear expenditure responsibilities while revenue sharing depends on GST rates and compensation. The discontinuation of revenue compensation has exposed states to shortfalls, especially those with lower consumption or higher fiscal needs. IGST settlement delays further strain state finances and weaken trust in the shared tax system. Thus, GST has improved tax administration and a common market, but it requires timely settlements, adequate compensation or equalisation, greater state fiscal space, a constitutional settlement on GST compensation to preserve federal balance and trust.