- The three farm laws were touted as an important step in the agricultural revolution. Is their withdrawal a regressive step? Critically analyse. (15 Marks)
- Cryptocurrencies are gaining a lot of popularity in recent times. In light of this, enumerate its advantages and disadvantages. (10 marks)
Q1. The three farm laws were touted as an important step in the agricultural revolution. Is their withdrawal a regressive step? Critically analyse. (15 Marks)
- Farm Laws Repeal Bill, 2021 was introduced to repeal the three farm laws which otherwise aimed at reorganizing the agriculture sector from input led model to the one in line with the principles of market economy.
- Farm laws could have diversified cropping patterns by promoting other crops as per market demand, into export-oriented and high-value crops. Repealing of the three laws is regressive because the laws aimed at:
Giving marketing freedom to farmers- It would have ensured that farmers get proper price with the freedom to sell where they want to.
- Incentive to private investments- APMC acts of state governments disallowed farmers to deal directly with corporate buyers and exporters. But these acts had provisions for contract farming by allowing private market to deal freely without approval of the local mandi or the payment of a mandi tax.
- Better Storage infrastructure- Private investment can improve storage and warehousing by amending Essential Commodities Act, 1955.
- Was in line with doubling farmers income by 2022 and reducing agricultural distress and rural migration.
- Better integrated market with competition and efficiency will reduce farm subsidies and writing off farm loans thus more resources for the government to use.
But due to some issues and long agitation, repeal of the farm laws was done. It was the way forward because:
Reducing scope of APMCs didn’t translate into more private investments in agriculture as seen in Maharashtra which delisted fruits and vegetables to no avail.
- APMC Acts were annulled in Bihar but still private investment didn’t increase, and on the contrary exploitation of farmers by traders increased after 2006.
- Grievance redressal was there in the farm laws but it was at the level of SDM with no scope of appeals. This generated fear of impartiality.
- Federal principles were violated when the centre used concurrent List entry 33 to intervene into entry 14, entry 26 and entry 27 of the State List.
- Fear of transformation of a currently formal and regulated APMC market into an informal and unregulated market.
- Mishandling of Farmers protest.
- Farm reforms are long overdue and the Government must take into confidence all stakeholders for them to be fully effective. Any reform has to be more consultative, transparent and better communicated to the potential beneficiaries.
Q2. Cryptocurrencies are gaining a lot of popularity in recent times. In light of this, enumerate its advantages and disadvantages. (10 marks)
- Cryptocurrency is a digital asset spread through a network of computers in a decentralised manner thus protecting them from any government interference. It is a virtual currency working as a medium of exchange where ownership records are stored in blocks.
- There are many cryptocurrencies in use like Bitcoin, Ethereum, Cardana, Solana etc with many advantages like -
- Anti-inflationary- Due to high demand, its prices have remained on high growth because people tend to hold rather than trade.
- Strong and inclusive growth- Like use in constructive activities like health records, land reforms and education sector.
- Investment destination- price of cryptocurrency keeps rising more than gold and other financial instruments.
- Fast and cheap transactions- funds transfer is easy because there is no need for a third party like in case of debit and credit cards.
- Security- some cryptocurrency systems come with a user ‘wallet’ or account address which is accessible only by private key and is known only to the owner.
- Disadvantages include-
- Anonymous nature makes them vulnerable to misuse like terrorist activities, money laundering, insurgency etc.
- Not accepted globally and highly volatile.
- High cost and energy used in data mining which makes its mining more prevalent in developed countries.
- Carbon footprint is very high due to the need of large servers.
- Paying taxes in cryptocurrency can result in huge fiscal issues due to volatility. Suppose dollar 100 in taxes is collected but it reduces to half its value in a couple of days.
- Cryptocurrency is gaining popularity and a lot of investors are opting for it, but regulation of transactions is the need of the hour to ensure security and legality. This will ensure the proceeds are not used for illegal activities and are also used for constructive activities.