In News:

According to the latest World Bank estimates, India’s extreme poverty has sharply declined from 27.1% in 2011-12 to 5.3% in 2022-23, based on an updated $3/day consumption threshold adjusted for 2021 purchasing power parity (PPP). In absolute terms, the number of extremely poor people has reduced from 344.47 million to 75.24 million, indicating 269 million people were lifted out of extreme poverty during this period.

The progress is more striking when viewed under the previous poverty line of $2.15/day (2017 prices). Under this standard, the extreme poverty rate fell from 16.2% to 2.3%, translating to a drop in the number of poor from 205.93 million to 33.66 million—a reduction of 172 million individuals.

Even as the poverty threshold was raised globally, India managed to outperform most developing countries. The lower-middle-income (LMIC) poverty rate, measured at a higher threshold of $4.20/day, also fell substantially—from 57.7% in 2011-12 to 23.9% in 2022-23. This decline reduced the number of people under LMIC poverty from 732.48 million to 342.32 million over 11 years.

The fall in poverty occurred despite high inflation during the decade. When adjusted for domestic inflation, even the $3/day threshold (new benchmark) is higher than the inflation-adjusted $2.60/day from previous estimates, making the achievement more credible.

The World Bank estimates also reveal stark differences in poverty distribution:

• The top five populous states—Uttar Pradesh, Maharashtra, Bihar, West Bengal, and Madhya Pradesh—accounted for 65% of extreme poverty in 2011-12, but still made up 54% in 2022-23.
• Rural India still shows significant poverty, with 90% of rural individuals reporting average monthly per capita expenditures below Rs 5,763, and the bottom 5% class spending just Rs 1,677.
• Urban poverty is relatively lower, with 25.78% in the bottom 40%, compared to 45.44% in rural areas.
• Educational attainment remains a strong poverty determinant; in 2022-23, 35.1% of Indians without schooling lived below the LMIC poverty line, compared to 14.9% with post-secondary education.

In terms of non-monetary deprivation, India also recorded improvement. As per the Multidimensional Poverty Index (MPI), which considers factors such as access to education, electricity, water, and sanitation, multidimensional poverty fell from 53.8% in 2005-06 to 15.5% in 2022-23. NITI Aayog estimates it to be 11.28%, down from 29.17% in 2013-14.

To ensure continued tracking, NITI Aayog is planning a new income-based extreme poverty measure with broader consultation. Meanwhile, the Household Consumption Expenditure Survey (HCES) 2023-24 indicates a 45.4% rise in rural consumption and 38% in urban consumption, reinforcing the World Bank’s findings.

Conclusion

India’s remarkable poverty reduction over the last decade reflects successful economic reforms, social welfare schemes, and increased consumption. However, regional, educational, and rural-urban disparities persist, necessitating continued policy focus, data refinement, and inclusive growth strategies.

Introduction: Groundwater Crisis and Agriculture

• India's Agricultural Dependence on Groundwater: India is a leading producer of water-intensive crops like rice, wheat, and pulses. The country’s agricultural sector heavily depends on groundwater for irrigation, especially for paddy cultivation.
• Over-exploitation of Groundwater: Groundwater extraction for irrigation is increasingly unsustainable, threatening agricultural sustainability in the long term.

Rising Groundwater Usage and Its Implications

• Population Growth and Groundwater Use: Between 2016 and 2024, global population grew from 7.56 billion to 8.2 billion, and India’s population rose from 1.29 billion to 1.45 billion. Concurrently, groundwater used for irrigation increased from 38% in 2016-17 to 52% in 2023-24, exacerbating the water crisis.
• Over-extraction in Major Paddy-Producing States: States like Rajasthan, Punjab, and Haryana have witnessed severe over-exploitation of groundwater for irrigation.
  • Rajasthan: Highest groundwater salinisation (22%) despite receiving the highest average rainfall (608 mm) among these states.
  • Punjab and Haryana: Lesser groundwater salinity due to canal irrigation and micro-irrigation systems.

Impact of Excessive Fertilizer Use on Groundwater Quality

• Soil Salinity and Groundwater Contamination: Excessive use of fertilizers, particularly for paddy cultivation, increases soil salinity and contributes to groundwater contamination.
• Toxic Chemicals in Groundwater: Nitrate contamination, caused by nitrogen-based fertilizers, and uranium contamination due to phosphate fertilizers are key concerns in states like Maharashtra, Telangana, Andhra Pradesh, and Tamil Nadu.
• Health Risks: Contaminated groundwater poses health risks such as thyroid disorders, cancer, and dental fluorosis, along with reduced agricultural productivity.

Projected Impact on Future Groundwater Availability

• Unsustainable Groundwater Levels: The Central Groundwater Board (CGWB) reports that if current practices continue, over half of the districts in Punjab could face groundwater depletion. Similarly, 21-23% of districts in Haryana and Rajasthan may experience a similar crisis.
• Population Growth and Water Scarcity: With India’s population expected to reach 1.52 billion by 2036, the need for sustainable groundwater management becomes even more critical.

Government Initiatives for Groundwater Management

• National Mission for Sustainable Agriculture (2014): Promotes sustainable practices like zero tillage, cover cropping, and micro-irrigation for efficient water and chemical use.
• Pradhan Mantri Krishi Sinchai Yojana (2015): Aims to boost irrigation efficiency through drip and sprinkler irrigation methods.
• Atal Bhujal Yojana (2019): Targets efficient groundwater management in water-stressed states like Gujarat, Haryana, Rajasthan, Maharashtra, and Uttar Pradesh.
• Success of Government Initiatives: CGWB data shows that the percentage of districts with unsustainable groundwater levels dropped from 23% in 2016-17 to 19% in 2023-24.

Role of State Governments in Groundwater Management

• State-Level Initiatives: States with unsustainable groundwater levels must take proactive measures to manage water resources efficiently.
  • Example - Odisha: Odisha's Integrated Irrigation Project for Climate Resilient Agriculture emphasizes irrigation efficiency and climate-smart practices, supported by World Bank funding.
• Encouraging Resource-Efficient Agriculture: States with safe groundwater levels, like Chhattisgarh, Bihar, Jharkhand, Telangana, and Odisha, should adopt water-efficient practices to protect groundwater resources.

Conclusion: Ensuring Agricultural Sustainability and Water Security

• Need for Urgent Action: Scaling up efforts to improve irrigation practices and groundwater management is crucial to securing India’s agricultural future.
• Global Food Security: Protecting groundwater resources will not only ensure water security within India but also contribute to global food security amid climate challenges.
• Blueprint for Sustainable Agriculture: States like Odisha are providing a model for sustainable water management, which can be replicated across water-stressed regions in India.

Why in the News?

The Commerce and Industry Ministry is in the final stages of formulating the proposed national e-commerce policy, and at this point, no additional draft policy will be released to solicit input from stakeholders.

Context:

• Electronic commerce (e-commerce) is emerging as a pivotal driver of India's economic growth and development.
• Estimates indicate that, with grocery and fashion/apparel leading the way, the Indian e-commerce sector is poised to reach a valuation of $99 billion by 2024, with projections soaring to $300 billion by 2030.
• Recognizing this immense potential, the government is diligently monitoring the evolving landscape of electronic business, calling for a regulatory framework to safeguard the interests of buyers, sellers, marketers, and distributors.
• In 2019, a draft National E-Commerce policy was drafted and made available to the public for scrutiny.
• In response to this draft policy, numerous foreign governments, including the United States, have submitted comments, highlighting concerns affecting U.S. businesses.
• In August 2023, the Department for Promotion of Industry and Internal Trade (DPIIT) conducted extensive discussions with representatives from e-commerce companies and domestic trade associations concerning the proposed policy.
• A government official noted that a consensus has been reached among the involved stakeholders regarding the proposed policy.

Key Highlights of the National E-Commerce Policy:

• On February 23, 2019, the Ministry of Commerce and Industry unveiled the draft National E-Commerce Policy (DPIIT 2019).
• Aim:
• The national e-commerce policy seeks to establish a regulatory framework that simplifies business operations within the sector.
• Boosting Exports:
• This policy recognizes the substantial export potential within India's e-commerce sector.
• Projections indicate that by 2030, India's e-commerce exports could range from 200 billion USD to 300 billion USD annually.
• Given the anticipated growth in global cross-border e-commerce exports, expected to reach 2 trillion USD by 2025, India aims to harness this opportunity.
• Regulatory Body and FDI:
• The possibility of creating a regulatory authority for the e-commerce sector is under consideration, though its implementation may require time.
• Local trade associations have been advocating for an empowered regulatory body to enforce e-commerce regulations and address violations.
• While 100% foreign direct investment (FDI) is
• permissible in the marketplace model, the inventory-based model does not allow FDI.
• Addressing Trader Concerns:
• Traders have voiced concerns regarding e-commerce rule violations, such as steep discounts and preferential treatment for specific sellers.
• The policy aims to clarify these concerns and enhance transparency in FDI regulations for e-commerce.
• Furthermore, the Consumer Protection (e-commerce) Rules 2020 and proposed amendments will align with the e-commerce policy to maintain consistency.
• Comprehensive Framework:
• The e-commerce policy will function as a comprehensive framework for the sector, ensuring harmony among various governing statutes.
• The sector is presently regulated by the FDI policy, the Consumer Protection Act of 2019, the Information Technology Act of 2000, and the Competition Act of 2002.
• The policy intends to streamline these regulations, creating an environment conducive to the e-commerce industry's growth.

Advantages Highlighted in the Draft E-Commerce Policy:

• Enhanced Information Provision: One notable strength of the draft e-commerce policy lies in its emphasis on comprehensive information provision.
• It mandates that firms furnish clear details about product specifications, images, return and exchange policies, payment methods, and grievance redressal procedures.
• This ensures consumers have access to transparent information, fostering a healthy e-commerce market.
• Clear Grievance Redressal Mechanisms: The policy advocates for the establishment of transparent grievance redressal mechanisms, including the appointment of nodal officers, specified timeframes, and defined processes.
• These measures benefit consumers by facilitating seamless pre- and post-purchase processes.
• Seller Transparency: The policy requires platforms to disclose seller information, including names, locations, and contact details.
• This transparency empowers buyers to engage with sellers beyond the confines of a platform if they choose to do so.
• Fair Data Use: Platforms are prohibited from exploiting the vast data at their disposal to gain an unfair advantage over sellers or exhibit preferential treatment among sellers
• This regulation plays a crucial role in safeguarding the welfare of sellers.

Criticism of the Draft E-Commerce Policy:

• Infringement on Other Ministries' Mandates: The proposed rules appear to encroach upon the mandates of other ministries.
• For instance, the 'fallback-liability' provision holds platforms responsible for any mis-spelling by third-party sellers, contradicting the Finance Ministry's FDI rules that limit platform inventory management.
• Additionally, it removes the immunity granted specifically to marketplaces under the IT Act.
• Redundancy in Regulatory Oversight: The Ministry of Corporate Affairs argues that rules addressing the abuse of competitive positions are unnecessary since the Competition Commission of India already oversees such matters.
• Restrictive Measures on Related Parties: The policy restricts related parties from engaging in commercial activities on platforms, with related parties defined as entities with common shareholders owning more than 5% or over 10% ownership.
• While well-intentioned, this clause may not align with regulatory objectives.

Mains Question:

• Examine the objectives of India's National E-commerce Policy about consumer protection and seller support. Analyze the criticisms and challenges posed by its potential impact on other ministries and restrictions on related parties. (15M)