9th January Current Affairs

1.Year End Review 2020 of Ministry of Labour and Employment

Employee centric initiatives

EPFO ensures hassle free service delivery through UMANG during COVID-19 pandemic- 

  • The Unified Mobile Application for New-age Governance (UMANG) has been a big hit among subscribers enabling them to utilize services during COVID-19 pandemic from the comfort of their homes in hassle free manner. During the period from April to September 2020, a total of 19.20 lakh claims were filed online through UMANG App.
  • This was a whopping 274% increase compared to pre-Covid-19 period from October 2019 to March 2020, where only 5.14 lakhs claims were submitted through the App.
  • Instead of developing its own App, EPFO joined UMANG curtailing costs and enhancing facility of centralised services. EPFO services are most accessed service on UMANG app.

Pension Payment Orders (PPOs) and UAN cards on Digilocker:

  • PPOs issued from the year 2017 onwards and UAN cards have been made available on Digilocker which is Government of India’s cloud based platform for storage, sharing and verification of documents and certificates. This initiative will enable a large number of pensioners and PF members to download their documents and avail timely benefits.

EPFO leverages CSC network for submission of Jeevan Pramaan by pensioners

  • By leveraging the last mile network of over 3.65 lakh Common Services Centers, EPFO has provided its 67 lakh pensioners, a facility to submit Digital Jeevan Pramaan closer to their residence.
  • In addition to CSC centers, EPS pensioners can also submit Jeevan Pramaan through 138 regional offices and 117 district offices and pension disbursing banks. A multi-agency model adopted by EPFO empowers EPS pensioners with choice and autonomy to select the service delivery agency as per their convenience.

Employer centric initiatives

Integration of data of J&K Provident Fund with EPFO’s database: –

  • The data pertaining to erstwhile Jammu and Kashmir Provident Fund Organisation was successfully migrated and integrated with EPFO’s database.
  • This seamless assimilation has enabled employers of the Union Territories of Jammu & Kashmir and Ladakh in filing their monthly returns and ensured social security cover to workers of these UTs. Further, for successful implementation, large scale training to EPFO officials and employers has also been imparted.

Measures to implement EPF relief package under PMGKY

  • As a part of the relief package under PMGKY, Govt. of India has proposed to pay 24% of the monthly wages into EPF accounts subject to certain conditions.
  • Benefits amounting to Rs. 2570 crores have been credited upfront to Aadhaar seeded UANs under the package till 30.09.2020, covering 44.69,662 employees from 2,81,939 establishments. Detailed guidelines alongwith FAQs were issued to implement the aforesaid package with wide publicity thereof through EPFO website, press releases, webinars, SMS to employers, and facebook & twitter handle of EPFO.
  • Since the lockdown, EPFO offices have organized 8,585 webinars with 81,120 stakeholders, disseminating crucial information regarding various services provided by EPFO including benefits under PMGKY.

Reduction in rate of contribution:

  • The reduction in statutory rate of contribution from 12% to 10% for wage months May, June and July, 2020 for all class of establishments covered under the EPF & MP Act, 1952 announced on 13.05.2020 by the Central Government as part of Atma-Nirbhar Bharat package has been notified vide SO 1513 (E) dated 18.05.2020. Reduction in rate of EPF contributions is intended to benefit 4.3 crore employees and employers of 6.5 lakh establishments to tide over the immediate liquidity crisis to some extent.

Ensuring a transparent and objective compliance mechanism:

  • e-Inspection was launched by Hon’ble Chairman, CBT and MOS (I/C), L&E with the purpose of enhancing ease of doing business and promoting transparency and objectivity in EPFO’s compliance machinery.
  • It reduces cost of compliance for non-wilful defaulters as it allows employers to either declare closure of their business with supporting documents or disclose the amount in default with reasons and proposal to remit the un-paid amount. Initially, a pilot run was successfully conducted in two Regional offices at Agra & Karnal.
  • Now, e-Inspection forms have been deployed in the login of employers of 30552 establishments, who have not filed ECR for 07 to 12 months during the period up to wage month Jan, 2020. It has been ensured that no period during the pandemic or lock-down is involved in the e-Inspection notices.
  • Through e-inspection facility, information regarding the status of establishments and the unpaid amount would be available to EPFO and depending upon the nature of responses, further action can be taken to secure compliance. ROs have been instructed to ensure hand-holding of employers, particularly the smaller businesses, to make use of the facility since they lack professional support in such work areas.

Virtual hearing facility for quasi-judicial cases

  • During the 227th meeting of CBT, EPF held on 09.09.2020, Hon’ble Minister of State (I/C), L&E launched virtual hearing facility for quasi-judicial cases under EPF&MP Act, 1952 which would enhance ease and convenience for employers and employees to appear in hearings from remote locations of their choice.
  • The system entails savings on time, travel and expenditure for parties, ensures compliance to social distancing norms and fast tracks assessment of worker’s dues to generate better confidence in the quasi-judicial mechanism. Detailed instructions were issued for strict implementation of the mechanism in all field offices of EPFO.

Other Milestones:

Signing of Social Security Agreement with Brazil: – 

  • A Social Security Agreement was signed with Brazil on 25.01.2020 (official communication from MEA received in February). This is the 20th such agreement signed by India and Brazil is the 19th country with which India has signed a Social Security Agreement. This agreement will go a long way in providing Social Security benefits to international workers of both countries.

EPFO conferred Digital Technology Sabha Award under “Enterprise Category”-

  • EPFO won Digital Technology Sabha Award for developing Auto claim settlement process to respond to need during the pandemic. This project was developed in house and it helped to bring down Covid-19 claim settlement time to 72hrs.

EPFO wins Gold award from SKOCH India for EPFiGMS

  • EPFO was conferred the SKOCH Digital India & e-Governance Award 2020 under the Category – Services Delivery – Government to Citizens (G2C) for its in-house grievance resolution portal- EPFiGMS.
  • With the help of the portal, lodging of grievances and their resolution has become seamless and during the lockdown, when the facilitation and PRO centres of PF offices were not fully functional, EPFiGMS was a tool to mitigate the problems of stakeholders, eliminating the need to visit offices.

Contribution to PM CARES Fund

  • Employees of EPFO stand committed in the service of the Nation in every possible way during these testing times. They have come forward to support the Govt. in tackling this pandemic by voluntarily contributing one day’s salary amounting to around Rs. 2.5 crores to the PM CARES Fund.

Major Steps taken in ESIC in year 2020

Convergence/Synergy between National Health Authority (Ayushman Bharat) and Employee’s State Insurance Corporation

  • Employee’s State Insurance Corporation (ESI Corporation) has entered into a partnership with National Health Authority (NHA) running Ayushman Bharat – Pradhan Mantri Jan ArogyaYojana (AB PM-JAY) which will create an ecosystem wherein beneficiaries of ESI Scheme of selected districts in newly implemented area shall be able to access services at AB-PMJAY empanelled hospitals.
  • Also, ESI Corporation shall be able to provide medical services to PMJAY beneficiaries through its underutilized Hospitals.For this purpose, 15 ESI Corporation Hospitals are being empanelled with PMJAY. MoU for above mentioned services have already been signed between ESI Corporation and NHA- PMJAY. To start with, the pilot project of this scheme has already been successfully completed in two districts – Ahmednagar (Maharashtra) and Bidar (Karnataka).
  • Integration of Panchdeep Module with PMJAY for real-time eligibility check before availing services through ‘Ayushman Bharat’ in specified two districts has been done.

Opening of ESIC Hospitals to Non-Insured Persons:

  • ESI Corporation, in recent years, has taken initiatives to provide health services to people other than its insured persons by granting approval to open its underutilized hospitals (less than 60% bed occupancy) to general public on nominal user charge basis. At present, 7 ESIC Hospitals are providing medical services to general public.

Extension of Atal Beemit Vyakti Kalyan Yojna with relaxed eligibility conditions and enhanced relief payment:

  • ESI Corporation extended the scheme of Atal Beemit Vyakti KalyanYojana for another one year i.e. from 01.07.2020 to period 30.06.2021 with relaxation in eligibility for the period 24.03.2020 to 31.12.2020 for providing the benefit to IPs who become unemployed due to Covid-19 induced lockdown.
  • The Relief payment has been enhanced to 50 % of the average per day earning at the place of earlier relief payment of 25% of average per day earning.

Ease of doing business:

  • For the ease of doing business, the new entities which are getting registered as companies through the Agile Platform of Ministry of Corporate Affairs are also facilitated to register under ESI Act, in a single go through common transactions. The integration of Panchdeep with MCA portal has been made effective.

Consumer Price Index Numbers for Rural Labourers and for Agricultural Labourers [CPI (RL/AL)] (Base: 1986-87=100):

  • Based on the retail price data collected from 600 sample villages, CPI Numbers for Rural labourers and its subset Agricultural Labourers are being compiled for 20 States and All-India on base 1986-87=100 on a monthly basis.
  • Labour Bureau compiled & released CPI Numbers for Agricultural & Rural Labour (Base 1986-87=100) up to the month of September, 2020.

Base Updation of Consumer Price Index Numbers for Industrial Workers (CPI-IW):

  • Labour Bureau has completed the process of updating the CPI-IW series to a more recent base period i.e. 2016=100.
  • A total of 88 centres have been covered in the new series of CPI-IW, which have been approved by the Standing Tripartite Committee (STC) of Ministry of Labour & Employment and Group of Technical Advisory Committee on Statistics of Prices and Cost of Living (TAC on SPCL).
  • In the new series of CPI-IW, a sample size of 48384 working class families belonging to existing 7 sectors (Factories, Mines, Plantation, Railways, Public Motor Transport Undertakings, Electricity Generation and Distribution, Ports and Docks) has been covered under the Working Class Family Income & Expenditure Survey and 18816 working class families belonging to these sectors have been covered under Repeat House Rent Survey.
  • The new Series was also placed before the Standing Tripartite Committee (STC) and National Tripartite Forum represented by Apex Level Trade Union Leaders, Employer’s Associations Representatives and State Representatives both from Central Ministries as well as States.

Statutory and Voluntary Returns under Four Labour Codes:

  • Ministry of Labour & Employment has amalgamated all Central Labour Laws / Acts into four labour codes.
  • In addition to the present mandate of Labour Bureau, it has now been proposed to designate Labour Bureau as the Nodal agency for collation of administrative statistics for labour returns under all the four Labour Codes.

Pradhan Mantri Rojgar Protsahan Yojana (PMRPY)

  • Pradhan Mantri Rojgar Protsahan Yojana (PMRPY) was launched on 9th August, 2016 with the objective to incentivise employers for creation of new employment.
  • Under the scheme, Government of India is paying Employer’s full contribution i.e. 12% towards EPF and EPS both (as admissible from time to time) for a period of three years to the new employees through EPFO.
  • The scheme is targeted for employees earning uptoRs. 15,000 per month and also aims to cover a large number of informal workers to the formal workforce. The terminal date for registration of beneficiary through establishment was 31stMarch, 2019.
  • Initially, Government was paying 8.33% EPS contribution of the employer for all sectors in respect of these new employees. The benefits of the scheme were also extended to the Textile Sector under Pradhan MantriParidhanRojgarProtsahanYojana (PMPRPY) for made-ups and apparels sector where the Government was paying additional 3.67% EPF contribution of the employer in respect of these new employees this bringing the total incentive to 12%.
  • The scope of the scheme was enhanced w.e.f.1.4.2018 with the approval of CCEA to provide the benefit of full 12% employers contribution for all sectors.
  • This scheme has a dual benefit, where, on the one hand, the employer is incentivised for increasing the employment base of workers in the establishment, and on the other hand, a large number of workers will find jobs in such establishments.
  • A direct benefit is that these workers will have access to social security benefits of the organized sector. All the beneficiaries under this scheme are Aadhaar Seeded.

Hiqhlights of Important Achievements and programmes:


Chairpersonship of Governing Body of International Labour Organization:

  • Shri Heeralal Samariya, the then Secretary (L&E) was elected as the Chairman of the Governing Body of International Labour Organization for the period from June 2020 to June 2021.  After his superannuation, Shri Apurva Chandra, Secretary @&E) has been elected in his place. He chaired the 340th Session of the Governing Body of ILO held virtually during 2- 14 November 2020.

International Labour Day, 01.05.2020

  • On the occasion of the International Labour’s Day, Shri Santosh Kumar Gangwar, Hon’ble Minister of State (Independent Charge) for Labour & Employment held a Webinar with the Central Trade Union Organization and Employers’ Organization on 1st May 2020 at Shram Shakti Bhawan, New Delhi.
  • Senior officers of the Ministry of Labour & Employment, Representatives of various Central Trade Unions and Employers’ organizations have taken part in the Webinar and discussed various issues related to
  • Protection of the interest of Workers and Migrant Workers in view of COVID-l9,
  • Measures to generate Employment,
  • Measures to be adopted for restarting economic activities and
  • Measures to improve situation of MSME to enable them to discharge their liabilities under Labour Laws.

 ILO Global Summit

  • The Virtual ILO Global Summit was held from 1-9 July.  Shri Santosh Kumar Gangwar, Hon’ble Minister of State (Independent Charge) for Labour & Employment participated in the ILO Regional Event held on 2 July, 2020 and the Constituent Day held on 09 July, 2020.

G-20 Labour And Employment Ministries’ Meeting held under the Saudi Arabian Presidency

  • Indian delegation led by Shri Santosh Kumar Gangwar, Minister of State for Labour and Employment (independent charge) attended the G-20 Labour and Employment Ministers’ meeting held virtually under the Saudi Arabian Presidency on 10th September 2020. The G20 Labour and Employment Ministerial Declaration was adopted by the G20 Labour and Employment Ministers. The priority areas for discussion included:
  • Adapting Social Protection to Reflect the Changing Patterns of Work
  • Better Preparing Youth for the Transitions to Work
  • Achieving Gender Equality in the World of Work
  • Exploring Behavioral Insights Application for Robust Labor Market Policies.

BRICS Labour and Employment Ministerial Meeting held under the Russian Presidency

  • An Indian delegation led by Shri Santosh Kumar Gangwar, Minister of State for Labour and Employment (independent charge) attended the BRICS Labour and Employment Ministers’ meeting held virtually under the Russian Presidency on 9th October, 2020. The BRICS Labour and Employment Ministerial Declaration was adopted by the BRICS Labour and Employment Ministers. The priority areas for discussion included: (i) Development of a preventative safety and healthy work culture (ii) Poverty alleviation through social and economic transformations (iii) Future of work in the digital economy

ILO Centenary celebration event and its publications

  • To celebrate the International Labour Organization Centenary year, an event was organized by the Ministry of Labour and Employment on 22nd January, 2020 at New Delhi in which “ILO Commemorative Postage Stamp’ was released. Also, two books namely “100 years of India’s partnership with ILO” and “lndia and the ILO chronicle of a shared Joumey-1919” were released during the function.

Governance reforms through use of Information and Communication Technology:

  • SAMADHAN Portal – An e dispute portal SAMADHAN for filing industrial disputes by workmen/employer related to employment was launched by Secretary on pilot basis in February, 2019. Thereafter, on 17th September, 2020, the Portal was launched on Pan India basis.
  • The Portal is so designed that it would integrate all the stakeholders (Viz. Employee/Employer, Conciliation Officer, Appropriate Government and CGITs) in the dispute under one roof. This initiative has ushered in a new era of Industrial Relations by hassle free and timely disposal of IDs in a very simple, useful and transparent manner resulting into a simplified, standardized and streamlined process which is faster and easier to monitor.
  • The paradigm shift in governance of Industrial Dispute statute will ensure maintenance of peaceful work culture in the industry so that industrial growth doesn’t suffer and rights of the employee are protected.

2.Year End Review 2020 – Ministry of Panchayati Raj

The major highlights of the Ministry of Panchayati Raj during the year 2020 are as follows:

SVAMITVA (Survey of Villages and Mapping with Improvised Technology in Village Areas)

  • Towards the objectives of socio-economic empowerment of the rural mass and making them self-reliant, a Central Sector Scheme, “Survey of Villages and Mapping with Improvised Technology in Village Areas’ was launched by the Prime Minister on 24thApril 2020. The scheme aims to provide the ‘record of rights’ to village household owners possessing houses in inhabited rural areas in villages and issuance of property cards to the property owners.

e-Gram Swaraj e-Financial Management System

  • In order to strengthen e-Governance in Panchayati Raj Institutions (PRIs), eGramSwaraj, a Simplified Work Based Accounting Application for Panchayati Raj, was launched on the occasion of National Panchayati Raj Day on April 24, 2020. It has been developed amalgamating the functionalities of all the applications under e-panchayat Mission Mode Project (MMP).
  • e-GramSwaraj assists in enhancing the credibility of Panchayat through inducing greater devolution of funds to PRI. It brings better transparency through decentralized planning, progress reporting and work-based accounting. Furthermore, the application provides a platform for effective monitoring by higher authorities.
  • In this endeavour, the Ministry of Panchayati Raj has put in place an e-Financial Management System (e-FMS) comprising of Panchayat Planning, Physical Progress, Financial Progress, and Asset Management with Local Government Directory (LGD) forming the base for such a robust system along with the Public Financial Management System (PFMS), Special Planning and Geotagging.

People’s Plan Campaign (PPC)- Sabki Yojana Sabka Vikas

  • Inspired by the visible and quite satisfactory performance of the Gram Panchayats, Gram Sabhas and other stakeholders involved in the PPC during 2018-19 and 2019-20 and to provide sustainability to the Gram Panchayat Development Plan (GPDP) formulation process into a participative and transparent exercise, the process of GPDP preparation for the financial year 2021-22 again has started in Campaign mode from 2ndOctober, 2020 as PPC-2020-21.

AuditOnline: Online Audit of Panchayat accounts

  • As a critical Institutional reform, Ministry has launched the AuditOnlineapplication on 15th April, 2020 for carrying out online Audits of Panchayat accounts. AuditOnline not only facilitates the auditing of accounts but also provisions for maintaining audit records that have been carried out.
  • This application also seeks to streamline the process for audit inquiries, draft local audit reports, draft audit Paras etc. One of the main unique aspect of AuditOnline; is that it is a completely configurable application i.e. the application can be modified/configured as per States‘Audit process flow, so that the State Auditors using the application can easily carry out the audit exercise using
  • To begin with; it was decided to carry out the audit of Panchayat accounts for 14thFinance Commission (XIV FC) for the year 2019-20. Accordingly, States were informed that mandatory audit of at least 20% GPs need to be carried out. The accounts of Panchayats are being maintained on eGramSwaraj (erstwhile PRIASoft – accounting MIS), a work based accounting software developed under e-Panchayat Mission Mode Project. Majority of the States have adopted eGramSwaraj and have been accounting for expenditure incurred under XIV FC. Almost, all States are on-board AuditOnline to carry out audit of 20% of the GPs.
  • Few States decided to carry out audit of more than 20% GPs viz. Telangana (40%) and UP (100%). All States are required to complete the audit process by 31stDecember 2020. However, from next year i.e. 2021-22; 100% GPs have to be audited using AuditOnline.

Finance Commission Grants to Rural Local Bodies

  • The Fifteenth Finance Commission (XV FC) in its interim report for the period of FY 2020-21 has recommended grants of Rs.60,750 crore for Rural Local Bodies (RLBs). This is the highest annual allocation of Finance Commission Grants to RLBs so far.
  • Earlier, Fourteenth Finance Commission (XIV FC) recommended an award of Rs.2,00,292.20 crore to the Gram panchayats constituted under Part IX of the Constitution for 26 States for the award period 2015-20.
  • Non Part IX Areas where Panchayats do not exist were not recommended XIV FC Grants. Now, the XV FC Grant-in-aid will be devolved to all tiers of Panchayats including the Traditional Bodies of Non Part IX States and Fifth and Sixth Schedule areas, in 28 States.
  • The Grants are provided in two parts, namely,
  • a Basic (Untied) Grant (50%) and
  • a Tied Grant (50 %)
  • While the basic grants are untied and can be used by RLBs for location-specific felt needs, except for salary or other establishment expenditure, the Tied Grants are earmarked for the national priority focus areas of Drinking Water Supply and Sanitation.

Garib Kalyan Rozgar Abhiyan (GKRA)

  • Government of India had launched GKRA in six States of Bihar, Jharkhand, Madhya Pradesh, Odisha, Rajasthan and Uttar Pradesh to provide gainful employment to the migrant labourers who had returned to their native villages due to the outbreak of COVID-19 pandemic. As a part of the Abhiyan, Ministry of Panchayati Raj undertook facilitation of two activities namely, (i) ‘Construction of Gram Panchayat Bhawans’ and (ii) ‘Works under Central Finance Commission Grants.

National Panchayat Awards 2020

  • Despite constraints and limitations, there are many outstanding performers among Panchayats all over the country. Thus, Ministry of Panchayati Raj has been incentivizing best performing Panchayats/States/UTs through awards and financial incentives since the year 2011 under its Incentivization of Panchayats Scheme in recognition of their good work for improving delivery of services and public goods. The awards are given on the National Panchayati Raj Day celebrated on 24thApril annually.
  • National Panchayat Awards 2020 were conferred under various categories namely, Deen Dayal Upadhyay Panchayat Sashaktikaran Puraskar [to 213 Panchayats in 28 States/UTs], Nanaji Deshmukh Rashtriya Gaurav Gram Sabha Puraskar (to 27 Gram Panchayats in 27 States/UTs), Gram Panchayat Development Plan Award (to 28 Gram Panchayats in 28 States/UTs), Child-friendly Gram Panchayat Award (to 30 Gram Panchayats in 30 States/UTs) and e-Panchayat Puraskar (8 States).
  • For National Panchayat Awards 2021(Appraisal year 2019-20) online nominations for all three tiers of Panchayati Raj Institutions have been invited from State Governments/Union Territory (UT) Administrations under the four categories namely, Deen Dayal Upadhyay Panchayat Sashaktikaran Puraskar, Nanaji Deshmukh Rashtriya Gaurav Gram Sabha Puraskar, Gram Panchayat Development Plan Award and Child-friendly Gram Panchayat Award.

3.Issues over Digital Taxes

News: Digital services taxes adopted by India, Italy and Turkey discriminate against U.S. companies and are inconsistent with international tax principles, the U.S. Trade Representative’s office has said.

Digital Services Taxes

  • The “digital services tax” (DST) is a levy on the overall revenues earned by the supplier of specific digital services. The DST should not be confused with the so-called “Netflix tax,” which one may find in some western countries. The Netflix tax is essentially a “value-added tax” on digital services where the consumer bears the entire tax burden on the value of the final product.

Equalization Levy

  • India has earlier expanded the scope of the Equalization Levy, or digital tax, to the sale of goods and services in the country by overseas e-commerce firms.
  • The Equalization Levy was introduced for the first time in 2016 as 6 per cent tax on revenues earned by non-residents from online advertising and related services.
  • The burden of this tax eventually fell on local firms advertising on these platforms.
  • In March 2020, the government expanded the scope of this levy to include the sale of goods and services in the country by overseas e-commerce operators.
  • The transactions were to be taxed at 2 per cent if businesses earned more than Rs 2 crore.
  • Globally, the rate of digital tax varies from 1.5 per cent (in Poland and Kenya) to 15 per cent (Paraguay). In Europe, the tax rate varies from 3 per cent (France, UK, Spain) to 7.5 per cent (Hungary).

USTR’s Investigation Report:

  • The DST in India is discriminatorybecause it exempts Indian companies and targets non-Indian firms. This hits US firms which dominate the technology industry. 119 companies that it identified as likely liable under the digital services tax, 86, or 72%, were American.
  • USTR estimates that the aggregate tax bill for US companies could exceed USD 30 million per year. The USTR has determined that India’s DST is unreasonable or discriminatory and burdens or restricts US commerce and thus is actionableunder Section 301 (US Trade Act).

India’s Stand:

  • India has described the equalization levy as a fair, reasonable and non-discriminatory taxaimed at all offshore digital economy firms accessing the local market and has denied it targets US companies.
  • It seeks toensure a level-playing field with respect to e-commerce activities undertaken by entities resident in India as well as those not residents in India or without permanent establishment in India.
  • The government of India will examine the determination/decision notified by the USin this regard, and would take appropriate action keeping in view the overall interest of the nation.
  • There was no retroactive element or extra-territorial application involved in the levy which applied only on the revenue generated from India.
  • It is a recognition of the principle that in a digital world,a seller can engage in business transactions without any physical presence, and governments have a legitimate right to tax such transactions.

A populist fuss by the US

  • The US is a bit confused and so is the exiting President. They are not able to decide what they want to do.
  • It is being argued that it could lead to tariffs before Donald leaves office or early in the administration of President-elect Biden.
  • This arguably another populist measure that Trump administration wants to leave behind.

4.World Food Price Index

News: World food prices rose for a seventh consecutive month in December 2020, with all the major categories, barring sugar, said the United Nations Food and Agriculture Organization (UN-FAO).

Need for such Index:

  • High food prices have contributed to a surge in inflation
  • There are social and economic advantages from high food prices for example higher prices are an opportunity to improve farmers’ incomes and to stimulate investments in farming.
  • For developing countries that are major exporters of food, the rise in world prices helped to bring about an improvement in the terms of trade and a strong balance of payments.

World Food Price Index

  • The FAO Food Price Index is a measure of the monthly change in international prices of a basket of food commodities. It consists of the average of five commodity group price indices [cereal, vegetable, dairy, meat and sugar], weighted with the average export shares.
  • The index has become a critical and timely monthly indicator of the state of international food markets, gauging the change in food commodity prices over time in nominal and real terms.


  • That said higher food prices for domestic consumers created fresh problems of poverty and hunger.
  • Lower-income families spend a higher proportion of their budgets on food.
  • Higher prices hit them hardest causing a fall in real living standards.
  • This means that food price inflation can act as a tax on the poor and have a regressive effect on the distribution of income.

Food and Agriculture Organization:

  • FAO is a specialized agency of the United Nationsthat leads international efforts to defeat hunger.
  • World Food Dayis celebrated every year around the world on 16th The day is celebrated to mark the anniversary of the founding of the FAO in 1945. India released a commemorative coin of Rs. 75 denomination to mark the 75th Anniversary of the FAO (16th October 2020).
  • It is one of the UN food aid organisations based in Rome (Italy).Its sister bodies are the World Food Programme and the International Fund for Agricultural Development (IFAD).

Initiatives Taken:

  • Globally Important Agricultural Heritage Systems (GIAHS).
  • Monitors the Desert Locust situationthroughout the world.
  • TheCodex Alimentarius Commission or CAC is the body responsible for all matters regarding the implementation of the Joint FAO/WHO Food Standards Programme.
  • TheInternational Treaty on Plant Genetic Resources for Food and Agriculture was adopted by the Thirty-First Session of the Conference of the Food and Agriculture Organization in 2001.

Flagship Publications:

  • The State of World Fisheries and Aquaculture (SOFIA).
  • The State of the World’s Forests (SOFO).
  • The State of Food Security and Nutrition in the World (SOFI).
  • The State of Food and Agriculture (SOFA).
  • The State of Agricultural Commodity Markets (SOCO).