Reducing Post-Harvest Losses in India: A Role for the Railways
Introduction
- India ranks second in global agricultural production but eighth in exports.
- This is due to factors like low productivity, quality issues, and inefficient supply chains leading to post-harvest losses.
- Annual post-harvest losses are estimated at ₹1,52,790 crore (Ministry of Food Processing Industries, 2022).
- Perishable commodities like fruits, vegetables, livestock products are most affected (up to 59% loss).
Reasons for Post-Harvest Losses in Perishables
- Inadequate storage, transportation, and marketing infrastructure.
- Time pressure for perishable produce after harvest.
- Small and marginal farmers (86%) struggle with economies of scale and market access.
- Food price volatility due to supply chain constraints.
Role of Railways in Perishable Transport
- Indian Railways is a major freight carrier, connecting rural and urban areas.
- The Food Corporation of India uses railways for 90% of food grain movement.
- Initiatives like Kisan Rail and parcel special trains target perishables.
- Kisan Rail success story: Grape growers in Nashik increased profits using Kisan Rail.
Enhancing the Role of Railways
- Increase awareness and accessibility of railway schemes for farmers.
- Invest in specialized refrigerated wagons for temperature-controlled transport.
- Establish rail-side facilities for safe cargo handling and minimize spoilage/contamination.
- Streamline loading/unloading processes to reduce transit times.
- Address staffing shortages through recruitment and training.
Benefits of Utilizing Railways
- Reduces post-harvest losses and improves farmer incomes.
- Environmentally friendly: Railways generate 80% less carbon dioxide than road transport.
Recommendations
- Adopt a systems-based approach integrating different transport modes.
- Public-private partnerships to improve operational efficiency and infrastructure.
- Modernize farm-to-market infrastructure and support value addition (Budgetary allocation for agriculture 2024).
- Conclusion
Integrating railways with agricultural logistics can significantly reduce post-harvest losses, improve farmer livelihoods, and benefit the environment.
Intergenerational Equity as Tax Devolution Criterion
Introduction
Tax devolution from the Union to States is a key topic in Indian politics and economics. The Finance Commission (FC) determines the horizontal distribution of tax revenue among states every five years.
Traditionally, the focus has been on intragenerational equity (fair distribution among states.) But being an important determinant, intergenerational equity (fairness across generations) should also be considered.
Intergenerational Fiscal Equity
- Definition: Every generation pays for the public services it receives and avoids burdening the future with debt.
- Two ways for government to raise revenue: tax and borrowing.
- Borrowing to finance current expenditure shifts the burden to future generations (through higher taxes to repay debt).
- The Ricardian Equivalence Theory suggests households save more when governments borrow, enabling future generations to pay higher taxes.
- However, in India, developed states with higher tax revenue receive less in transfers, while less developed states rely more on transfers.
Intragenerational vs. Intergenerational Equity
- Example: High-income states (e.g., Tamil Nadu) finance more of their expenditure with their own taxes compared to low-income states (e.g., Bihar).
- Low-income states receive more transfers but finance a smaller portion themselves.
- This creates a situation where:
- High-income states pay more taxes but receive fewer transfers, leading to higher deficits.
- Low-income states rely more on transfers and have lower deficits.
Balancing Equity and Efficiency
- The FC currently uses factors like population, area, and per capita income to distribute transfers (equity focus).
- Factors like tax effort and fiscal discipline get less weight (efficiency focus).
- The argument is that current equity indicators are not ideal.
- Including more fiscal variables (e.g., tax collection, spending efficiency) could incentivize better fiscal behaviour by states.
Conclusion
- The FC should consider fiscal responsibility of states when distributing transfers.
- Rewarding tax effort and spending efficiency can promote intergenerational equity and sustainable debt management.
- Balancing both intra and intergenerational equity is crucial for a fair and efficient fiscal system.
