Category: Economy

Food Security in India is still a major issue in India. India attained food self-sufficiency by the late 1980s. It means the availability, accessibility, and affordability of eatable commodities to all people at all times. Whenever there is a problem in food production or distribution of food, the poor people are the most vulnerable.

Food security depends on the government actions and vigilance and the Public Distribution System.It has three dimensions they are availability, accessibility, and affordability.

Availability

The availability of food means that there are enough edible commodities in government hands such as grains such as rice, wheat, etc stored in government granaries, agriculture production within the country is self-sufficient and food imports are good enough.

Accessibility

The accessibility to food, everyone has reached to food easily or within his reach.

Affordability

The edibles should be available at cheap, affordable prices so that every individual has enough finance to buy them.

Importance of food security in India

India has a huge ratio of poor population in the world. This section of the society is always food insecure while the person above the poverty line might face food insecurity at times, during calamity, drought, flood, failure of crops, famine, etc.

Due to such incidents, agriculture production decreases and creates a shortage of agricultural commodities, and the prices also go up. Due to high prices, one might be able to afford it. If such a situation is stretched over a longer time period it might cause starvation and in turn, lead to famine.

These famines in turn cause the spread of disease and even epidemics or pandemics may occur to a decrease in the intake of nutrients. India has had such experiences in the past such Famine of Bengal in 1943 which killed 30 lakh people in the Province of Bengal.

The people who died the most in such famine are poor people such as labourers, fishermen, farmers, etc.

Famines also existed in Kalahandi, Kashipur in Orissa, starvation deaths were reported in Baran Districts of Rajasthan, Palamau district of Jharkhand during recent times.

Therefore food security is important in India.

Schemes for food security in India

Integrated Child Development Scheme (ICDS)

It covers all children under six, pregnant women, and lactating mothers. Targeted Public Distribution System such as ‘free rice scheme in Tamilnadu by Antyodaya Anna Yojana family cards.

Annapurna

Free 10kg of free grains such as rice, wheat, etc for the destitute poor. In employment schemes such as Mgnrega(Mahatma Gandhi National. Rural Employment Guarantee Act 2005) by this act, a job is guaranteed for 100 days a year with minimum wages.

National Food Security Act

It is an act of Parliament that has an objective to provide subsidized food grains to almost two-thirds of countries with 1.2 billion people. This law was signed on 12 September 2013. This is to ensure that all people should get access to food all the time.

Also to ensure food and nutritional security in human life by ensuring adequate access to quality food and reasonable place.

Role of public distribution system in food security in India

It plays an important role in increasing food security and also distributing other rations such as Kerosene, Relief compensation, etc to the poor people. The major commodities are distributed such as rice, wheat, sugar, etc through a chain of shops at a fair price or subsidized price.

It also acts as a key instrument to make the availability of essential commodities at affordable prices throughout the year. The central and state government share the prices of the commodities. Mostly centre procures the commodities from the farmer at MSP(Minimum Support Price) and sells them to the states.

In some states like Tamil Nadu, etc, the state itself procures and sells it to the beneficiaries at subsidized prices.

Issues in food security in India

Due to inflation, the government has to spend more money on PDS. Also, MSP is increasing every year, the government has to spend additional resources to ensure food security. The Public distribution system in Tamil Nadu, Kerala, and other southern states performs significantly better than in the Northern states. This gap needs to be addressed.

High storage cost, storing grains in granaries above the specified level deteriorates the quality and also long the storage time, more damage is done to grains in terms of quality. There are enough storage granaries in the country which leads to huge wastage of grains to pests, rains, and to the Sun.

Conclusion

Indian government must ensure that the essential commodities such as rice, wheat, etc reach everyone should ensure Food security which is a part of Social Justice.

John Rawls Theory of Justice

John Rawls is one of the finest political philosophers of the 20th century. He developed the theory of Justice based on the paradigm called Justice as Fairness.

His framework treats all personal attributes as being morally arbitrary, He demands equality.

For him, equality means, ‘all social values including liberty, opportunity, income, wealth, self-respect are to be distributed equally ‘.

In other words, injustice is ‘simply inequalities that not to the benefit of all ’. If/when any action/attribute of an individual that does not benefit all actually signifies inequality and unfair/unjust character of a society.

This perspective compels us to have a more comprehensive understanding of Justice itself. Let’s see what he says about Justice.

Just think of a moment when you are asked to imagine a new society. It is obvious many would construct a society in which they would place themselves with all power/authority and privileges.

Do you think that anyone will imagine themselves in a pitiable situation? Most likely no one would do that? Why? It is not possible also to imagine people sacrificing their personal ambitions and self-interest in a new society.

People will immediately think of their children and their grandchildren’s welfare. Why would people sacrifice the well-being of themselves and their children?

You may wonder how this simple question would be the basis for John Rawls’s theory of Justice. There are strong foundations for this simple question and its plausible answer.

John Rawls tries to find out an answer to this question. He offers a hypothetical situation for us to imagine.

Yes, let’s imagine ourselves to be in a situation in which we have to make decisions about how society should be organized although we do not know which position we would ourselves occupy in that society.

We may not know which family we would be born in and similarly no knowledge about our caste, class, religion, gender, and region, etc.

Here Rawls argues that if we do not know where we will be and what options would be available for us in the future society, we will most likely support a decision on the rules and organizations of that future society that would be fair for all members.

When we are quite uncertain about our future, we like to facilitate an order in which all members would get a fair deal.

This moment Rawls describes as thinking under a ‘Veil of Ignorance.

We are ignorant about our possible position and status in society; each person would decide the way they generally do – trying to have an optimum self-interest in the new society.

But surprisingly no one knows exactly who he/she would be and what is going to benefit him/her. Each one of us will imagine the future society from the point of view of the worst off.

We usually tend to place ourselves with all privileges and entitlements. Now in the new imagined society, we really do not know where and what we will be.

In such a situation, what strikes people is, what if we, unfortunately, are born in a disadvantaged section of society with few or very minimal opportunities?

Suddenly, we try to create a new system in which even persons from the most marginalized sections get reasonable opportunities and resources.

Even though this is a moment of departure, it is not so easy to erase our identities and think/imagine ourselves under a veil of ignorance.

Similarly, it is not easy to expect people to be self-sacrificing and share their good future with unknown people.

However, the merit of the ‘veil of ignorance’ framework is that it expects people to just be their usual rational selves; they are expected to think for themselves and choose what they regard to be in their interest.

But what is more important here is that wearing an imagined veil of ignorance is the first step towards arriving at a system of fair laws and policies.

It tries to latch its trust in the human agency of rationality among people in the contemporary world.

The ethics of reason will create, for Rawls, a new political structure in which people will think of policies not to optimize their self-interests but rather envisage society as a whole.

This comprehensive and holistic perspective embedded in Rawls’ framework makes it highly pertinent while debating on Justice.

That is to say, it would be in the interest of all sections of the society as a whole must benefit from the policies and rules; not for an exclusive section of society.

Such fairness would be the outcome of rational action, not benevolence or generosity.

John Rawls theory premised upon the arrival of quintessential modern, rational beings to realize the spirit of Justice in our society; a society like ours wherein non-rational identities and sentiments play a major role in organizing the society, may have to toil to truly understand the spirit of Justice as emulated by John Rawls.

Examples for direct tax and indirect tax

Direct Tax

A direct tax is a tax that is levied on a person’s income or wealth. It is paid directly to the government. The burden of Direct tax cannot be shifted. The tax is progressive and is levied according to the paying capacity of the person.

Here the tax is collected more from the rich and less from the poor.

The plans and policies of the Direct taxes are being recommended by the Central Board of Direct Taxes (CBDT), which is under the Ministry of Finance in the Government of India.

Merits of Direct Taxes

1. Equity

Direct taxes are progressive in Nature that is the rate of tax varies according to the tax base. For example, Income tax satisfies the cannon of equity.

2. Certainty

A Canon of certainty can be ensured by direct taxes. Example: Income taxpayer knows the rate and time to pay the income tax.

3. Elasticity

Direct taxes also satisfies the cannon of elasticity. Income tax is more elastic in Nature. Example: When the Income-tax increases, the tax revenue of the government also get increased.

4. Economy

The cost of collection of direct taxes is relatively low. The taxpayers pay the tax directly to the state.

Demerits of Direct Taxes

1. Unpopular

Direct taxes are generally unpopular as it is inconvenient and less flexible.

2. Affected Productivity

According to many economists, direct taxes may adversely affect productivity. Citizens are willing to earn more income as they have to pay more taxes.

3. Inconvenient

The payers find it inconvenient to maintain accounts, submit returns, and pay taxes in lump sums.

4. Tax Evasion

The burden of direct tax is so heavy, that taxpayers always try to evade it. It leads to the generation of black money, which is harmful to the economy.

Examples of direct tax

Income, corporation, property, inheritance, and gift tax

Indirect Tax

Indirect tax is a tax charged on a person who purchases goods and services and then it is paid indirectly to the government.

Here, the burden of tax can be easily shifted to another person. Indirect tax is levied on all persons equally whether he/she is rich or poor.

Types of Indirect Taxes

1. Excise Duty

Payable by the manufacturer but shifts the tax burden to retailers and wholesalers.

2. Sales Tax

Paid by a shopkeeper or retailer, who then shifts the tax burden to customers by charging sales tax on goods and services.

3. Customs Duty

Import duties levied on goods from outside the country. It is ultimately paid for by customers and retailers.

4. Entertainment Tax

It is paid by Cinema theatre owners, who transfer the burden to the cinema goes.

5. Service Tax

Service Tax is charged on services like telephone bills, insurance premiums, food bills in restaurants, etc.

Merits of Indirect Taxes

(1) Wider Coverage

All people, whether rich or poor have to indirect taxes. It covers more people than direct taxes. In India, everybody pays indirect tax whereas only 2% of people pay income tax.

(2) Equitable

The indirect tax satisfies the canon of equity. When higher tax is imposed on luxuries used by rich people.

(3) Economical

The cost of collection of taxes is less because the producer and retailer collect taxes and payments to the government. The traders act as honorary tax collectors.

(4) Checks harmful consumption

The government imposes indirect taxes which are harmful to health. This kind of taxation is called Sin Tax.

Eg: Tobacco, liquor, etc.

(5) Convenient

Indirect taxes are levied on commodities and services. Whenever consumers make a purchase, they pay tax along with the price. They do not feel the pinch of paying taxes.

Demerits of Indirect Taxes

(1) Higher Cost of Collection

The cost of the collection of indirect taxes is higher than the direct taxes. The Government has to spend huge money to collect indirect taxes.

(2) Inelastic

Indirect taxes are less elastic compared to direct taxes. As indirect taxes are generally proportional.

(3) Regressive

Indirect taxes are sometimes unjust and regressive in nature since both rich and poor persons have to pay the same amount as taxes irrespective of their income level.

(4) Uncertainty

The rise in indirect taxes increases the price and reduces the demand for goods. Therefore, the Government is uncertain about the expected revenue collection. So Dalton says under indirect taxes 2+2 is not 4 but 3 or even less than 3.

(5) No civic Consciousness

As the tax is hidden in the price, the consumers are not aware of paying tax.

GST (Goods and Service Tax)

GST is an Indirect Tax that has replaced many Indirect Taxes in India. The Goods and Service Tax Act was passed in Parliament on 29th March 2017.

The Act came into effect on 1st July 2017; Goods & Services Tax in India is a comprehensive, multistage, destination-based tax that is levied on every value addition.

In simple words, Goods and Service Tax (GST) is an indirect tax levied on the supply of goods and services. This law has replaced many indirect tax laws that previously existed in India.

GST is one indirect tax for the entire country. Under the GST regime, the tax will be levied at the final point of sale. In the case of intra-state sales, Central GST and State GST will be charged. Inter-state sales will be chargeable to Integrated GST.

Destination Based

Consider goods manufactured in Tamil Nadu and are sold to the final consumer in Karnataka. Since Goods & Service Tax is levied at the point of consumption, in this case, Karnataka, the entire tax revenue will go to Karnataka and not Tamil Nadu.

Components of GST

The component of GST is of 3 types. They are CGST, SGST & IGST.

CGST: Collected by the Central Government on an intra-state sale (Eg: Within state/ union territory)

SGST: Collected by the State Government on an intra-state sale (Eg: Within state/union territory)

IGST: Collected by the Central Government for inter-state sale (Eg: Maharashtra to Tamil Nadu).

Nature of Sales tax, VAT, and GST

1. Sales tax was multipoint tax with cascading effect.
2. VAT was multipoint tax without cascading effect.
3. GST is one point tax without cascading effect.

Advantages of GST

1. GST will mainly remove the cascading effect on the sale of goods and services. Removal of cascading effect will directly impact the cost of goods. Since tax on tax is eliminated in this regime, the cost of goods decreases.
2. GST is also mainly technologically driven. All activities like registration, return filing, application for refund and response to notice need to be done online on the GST Portal. This will speed up the processes.