Fair and Remunerative Price (FRP)
Fair and Remunerative Price (FRP)
What is FRP
- The price declared by the government, which mills are legally bound to pay to farmers.
- Governed by The Sugarcane Control order, 1966.
- Mandates payment within 14 days of the date of delivery.
- Option of signing an agreement with farmers, to allow them to pay the FRP in installments.
How FRP is fixed
- FRP is based on the Rangarajan Committee report.
- It is determined based on the recovery of sugar from the cane.
- The Central Government announces FRP on the recommendation of the Commission for Agricultural Costs and Prices (CACP).
- In addition to Fair and Remunerative Price, State Advised Prices (SAP) are announced.
- The price level of FRP has shown a gradual increase over a period of time.
Significance of implementing Fair and Remunerative Price
- Thousands of farm laborers are associated with the cane growers.
- FRP provides economic benefits to growers.
- Fixation of FRP of sugarcane facilitates production, availability, and supply of cane to sugar factories.
Challenges in FRP
- Inconsistent government pricing policies.
- Delayed payments by sugar mills.
- Conflicts with World Trade Organization (WTO) rules.
Financial Stability and Development Council (FSDC)
Financial Stability and Development Council (FSDC)
FSDC is an autonomous body established by an Executive Order. It serves as a non-statutory apex body under the Ministry of Finance, created on the recommendation of the Raghuram Rajan Committee (2008) on financial sector reforms.
Members
- Finance minister - Chairman of the FSDC.
- Heads of the Financial Sector Regulators:
- Reserve Bank of India (RBI)
- Insurance Regulatory and Development Authority (IRDA)
- Securities and Exchange Board of India (SEBI)
- Pension Fund Regulatory and Development Authority (PFRDA)
- Finance Secretary
- Chief Economic Advisor
- Secretary of the Department of Financial Services
- Minister of State responsible for the Department of Economic Affairs (DEA)
- Secretary of the Department of Electronics and Information Technology
- Revenue Secretary
- Chairman of the Insolvency and Bankruptcy Board of India (IBBI)
Functions
- Macroprudential and financial regularities in the entire financial sector of India.
- Strengthening and institutionalizing the mechanism of maintaining financial stability, financial sector development, inter-regulatory coordination, and monitoring macro-prudential regulation of the economy.
Responsibilities
- Bringing about stability in the financial sector.
- Development of the Financial Sector.
- Coordination of Inter-Regulatory bodies.
- Promoting financial literacy.
- Ensuring financial inclusion.
- Macroprudential supervision of the economy including the functioning of large financial conglomerates.
- Coordinating India’s international interface with financial sector bodies such as the Financial Action Task Force (FATF) and Financial Stability Board (FSB).
Practice Question – Prelims
Consider the following statements:
1. Prime Minister of India is the Chairman of Financial Stability and Development Council (FSDC).
2. FSDC is a statutory body functioning under the Ministry of Finance.
Which of the statements given above is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
Panchayati Raj System
Practice Question – Mains GS - II
Panchayati Raj system in India requires second-generation reforms to secure grassroots development through democratic grassroots governance. Comment.
Panchayati Raj System
Challenges in Panchayati Raj System
The introduction of democratic governance in India through the 73rd and 74th Constitution Amendments initiated a process with standardized features, including elections every five years, reservations for historically marginalized communities and women, creation of participatory institutions, establishment of State Finance Commissions (SFCs), and creation of District Planning Committees (DPCs).
Systemic Failures in Panchayat Raj System
- No perceptible hand-holding and support by the States.
- Dependency on state machinery for their functioning.
- Postponing elections or failure to constitute SFCs and DPCs.
Fiscal Weakness of Village Panchayats
- Low local government expenditure, which is only around 7% compared to 24% in Europe.
- Own source revenue is only around 2%.
Second Generational Reforms
- Gram Panchayats should be responsible for asset creation, operation, and maintenance.
- Involving them in the planning process.
- Directly sending money for poverty alleviation to gram panchayat accounts.
- Financial incentives to states for encouraging effective devolution of fund, function, and functionaries at the grassroots level.
- Participation in the gram and ward Sabha in planning intermediate and district levels.
- Making social audit a mandatory feature.
- Empowerment of panchayat members.
Conclusion
The Panchayati Raj system has played a significant role in decentralizing power and promoting local democracy in India. Second-generation reforms are imperative to address existing shortcomings and secure grassroots development through democratic grassroots governance.
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