#6 Policy Mandala: Nutritional Rice Update, Global Ratings, and Infrastructure Gains
Welcome to the sixth edition of Policy Mandala. In this edition, we have structured this Policy Mandala on a 3-1 structure, where we discuss 3 recent policies and 1 book recommendation. Enjoy reading!
Analysis Mandala: Deepening Policy Understanding
Below, we discuss three recent policy updates from the past week(s), and analyze them for you: From the nutritional debate around rice fortification, to India’s homegrown Global Rating Agency, and PM Gati Shakti’s infrastructure boost. Let’s go!
Analysis #1: Rice changes its nutrition: a double-edged sword?
Last week, the government announced the mandatory fortification of rice for the public distribution system. But what does that mean?
Think of rice fortification as giving our beloved grain a vitamin boost. It involves adding essential micronutrients—like vitamins and minerals—during processing to tackle nutrient deficiencies, aimed at enhancing the nutritional quality of rice.
Sounds great, right? After all, our humble rice is about to become a nutritional powerhouse.
Let’s get into more details before we make any judgments.
To understand the implications of this policy, let’s take a quick trip down memory lane. Sixty years ago, India faced a major food security crisis. Thanks to the Green Revolution, we transitioned from scarcity to surplus, now producing around 305 million metric tonnes of food grains (2021-22 season). While this was a monumental achievement, we have also set the stage for new challenges.
As India embraced modern agricultural practices, especially external seeds, and centralized procurement, it began losing its rich tapestry of food crops.
Just a few decades back, we had over 110,000 indigenous rice varieties, but now we’ve lost over 93.6% of our rice heritage, with only a handful of varieties still in mass cultivation. Much of this decline can be attributed to the dominance of major agribusiness corporations like Monsanto-Bayer, which controls about 30% of the global seed market. Their focus on high-yield varieties, along with the centralized procurement system, prioritized quantity over quality in rice: kind of like choosing the biggest fruit instead of the juiciest.
As the most consumed staple grain in India, rice caters to over 65% of the population, but the average rice grain is now devoid of essential micronutrients. This has created a dire situation, where one in two women is anemic, and one in three children suffers from stunted growth, as per the NFHS-5. These alarming stats show that merely having food isn’t enough; we need nutrition-specific interventions.
The government is now stepping up with mandatory rice fortification, committing over 17,000 crores to enhance the nutritional intake of 80 crore citizens with fortified rice enriched with nutrients like iron, folic acid, and vitamin B12. Isn’t this a rice revolution?
However, while fortification sounds like a superhero swooping in to save the day, it has its drawbacks.
Leaning too heavily on it could threaten our agricultural diversity by promoting monocultures, and the technology of rice processing often benefits larger agribusinesses, sidelining small farmers. So, while the government’s move to fortify rice aims to combat malnutrition, it raises critical questions. Should we invest in fortification as a quick fix, or prioritize increasing seed diversity for a more holistic approach to food security and nutrition? Finding the right balance will be crucial for India's long-term health and well-being—because who wouldn’t want to eat their way to a healthier future?
Analysis #2: India gets an In-house Global Rating Agency: Is it Time to Celebrate?
Can You Get a Loan?
Well, it depends.
Often, the answer lies in one little number: your credit score. Lenders scrutinize your history and financial status to decide if you’re worthy of their cash. Now, replace lenders with International funds, and you with a country, and that’s where Sovereign Rating Agencies come into play.
Historically, these agencies have been mainly located in the Global North, or “the land of developed countries.” This often translated to biases where they seemed to lack insights into the nuances of developing nations, underestimating their potential while overestimating their risks. Case in point? India’s sovereign rating has been stuck in neutral for 15 years, even while boasting one of the highest economic growth rates among major nations. Talk about a missed opportunity!
But fear not, Here comes CareEdge Global IFSC Ltd., the first Indian rating agency to dive into the Global Sovereign Ratings Scale. This subsidiary of CareEdge Ratings brings over three decades of experience in analytics and a deep understanding of various industries.
Last week, they rolled out sovereign ratings for 39 countries Big start.
This initiative offers hope for the Global South. With an independent sovereign credit rating agency, developing nations now have a shot at fair, bias-free assessments.
CareEdge aims to compete internationally, stacking its ratings against existing agencies like:
Dagong Global (China)
Japan Credit Rating Agency (Japan)
Australian Ratings (Australia)
Global Credit Ratings (South Africa)
SR Rating (Brazil)
Sure, we might be late to the ratings party, but, better late than never.
The challenge ahead is for CareEdge to build credibility through transparency, innovative financial models, and, most importantly, unbiased ratings. The big question remains: Will CareEdge resist the temptation to align its ratings with government expectations or corporate interests? Only time will tell.
For now, let’s celebrate this milestone and keep our eyes peeled for the real test of integrity in credit ratings.
Analysis #3: India’s Gati gets Shakti: Infrastructure gets a boost!
For decades, India leaned on its services sector as a sweet spot for development. But now, the government is shifting gears towards manufacturing and industrial growth. And what’s driving it? Infrastructure.
A key measure in this is the logistics costs—basically, how much money we’re spending just to move stuff around. India’s logistics costs have been a heavyweight—13-14% of GDP, compared to the global 8-9%. Ouch!
Why? Majorly because of Poor Infrastructural Investments and because major ministries preferred to work in silos than to coordinate efforts.
Enter PM Gati Shakti (PMGS) in October 2021, a massive ‘systemized’ coordination exercise ensuring that around 44 Central Ministries and 36 States/UTs streamline infrastructure projects in a unified manner, merging programs like Bharatmala, Sagarmala, UDAN, etc, aiming for a multi-modal transport system with a Whole-of-Government approach.
Now, the exciting part—three big updates dropped in the last two weeks, and that’s why we chose to cover this in Policy Mandala:
Geospatial Platform: A technology upgrade bringing 1,614 data layers (land, forests, highways, etc.) together to make planning faster, and more efficient. Big Data is here.
District Master Plan: A portal for district authorities to work with central/state officials to fill infrastructure gaps and plan for the future. The portal has already been made live for 28 aspirational districts, with a full rollout expected in 18 months.
Border Area Development: The Border Roads Organisation launched 75 critical road and bridge projects along the Tibet border (China), improving national security, and ensuring fewer "bumpy rides" at the borders.
But wait, there’s more.
PMGS is also the new secret weapon for social programs. The Food and Public Distribution department is saving ₹20 crores a month just by mapping optimal routes for Ration godowns—talk about smart deliveries. Even, the Tribal Affairs Ministry is using the data to map 45 lakh vulnerable tribal groups across their habitats.
And there is more, the government also plans to open up part of PMGS data to private players to optimize their operations. They might soon get in on the fun too, with MoUs signed with Nepal and Sri Lanka to share the Gati Shakti blueprint. A real Vishwa Mitra (World’s Friend) moment.
But is it all too good to be true? Maybe. The real test could be India’s ranking in the World Bank's Logistics Performance Index (LPI), as it aims for a top 25 spot by 2030. Until then, let’s cheer for a policy that’s as slick as it sounds.
Book Mandala
In this section, we suggest a book to be read/listened each week, for the inner policy enthusiast in you :)
Book: Factfullness
Author: Hans Rosling, Anna Rosling Rönnlund, Ola Rosling
About the book: Factfulness is a rollercoaster ride that constantly challenges the reader to examine their common misconceptions about the world. The book emphasizes a fact-based worldview, showing that despite challenges, global progress is significant while identifying ten human instincts that distort our understanding of the world.
Our Take: Hans Rosling’s book is a must-read for policy scholars, researchers, and policymakers. It offers a refreshing perspective on global development and encourages informed decision-making based on data rather than fear. While most of our policy papers start by highlighting the global gap we are solving, Factfulness offers hope in seeing the long-term positive impacts that past decisions may have had in building the current world.