Economy, Agriculture, Cooperatives & the Employment Guarantee of Maharashtra — Practice

Question 1

Where and when was Asia's first cooperative sugar factory set up?

Accepted Answer

At Pravaranagar (Loni) in Ahmednagar, now Ahilyanagar, district, in 1950, led by Vitthalrao Vikhe Patil with D. R. Gadgil.

Question 2

Who is credited with the idea of Maharashtra's Employment Guarantee Scheme?

Accepted Answer

V. S. Page, who argued during the drought of the early 1970s that the state should guarantee work to all who asked for it.

Question 3

What share of India's GDP does Maharashtra account for, according to the Economic Survey of Maharashtra 2025-26?

Accepted Answer

About 14 per cent, the largest of any state.

Question 4

What is the Namo Shetkari Mahasanman Nidhi?

Accepted Answer

A state income-support scheme launched in 2023 that adds a state payment to the central PM-KISAN transfer for eligible farmers.

Question 5

What did the Supreme Court decide in 2021 about Part IXB of the Constitution?

Accepted Answer

It held Part IXB, added by the 97th Amendment, inoperative for state cooperative societies, because cooperatives are a state subject, while upholding it for multi-state cooperatives.

Question 6

Why is agrarian distress concentrated in Vidarbha and Marathwada? (~150 words)

Accepted Answer

Distress in these regions is the product of four overlapping risks. Weather: both lie largely in rain-shadow or low-irrigation areas, so a weak monsoon destroys the crop. Price: their main crops, cotton and soybean, are traded globally, so farm prices swing with world markets and trade policy. Cost: seeds, fertiliser and pest control have become costlier, and pink bollworm has hit cotton yields. Credit: when bank credit falls short, farmers borrow from informal lenders at high rates, so one bad season becomes a debt trap. The response must address all four: protective irrigation and watershed work, faster crop insurance, price stabilisation and procurement, and wider institutional credit, rather than relying on waivers alone.

Question 7

Maharashtra is India's largest state economy but not its most prosperous. Explain. (~150 words)

Accepted Answer

Maharashtra produced about 14 per cent of India's GDP according to its Economic Survey for 2025-26, the largest share of any state. But its per capita income ranked fifth in recent comparisons, behind Telangana, Karnataka, Tamil Nadu and Gujarat, because its large population divides a large output. Income is also concentrated: Mumbai, Thane and Pune produce a very large share of output, while districts such as Nandurbar, Gadchiroli and Washim have among the lowest per capita incomes. Agriculture employs a large share of workers but produces a small share of output, and Adivasi districts lag on nutrition and literacy. Size, therefore, hides regional, sectoral and social inequality, which is why balanced regional development is a standing policy concern.

Question 8

Analyse the role of the cooperative sector in Maharashtra's rural economy and the reasons for its decline in sugar and credit. (~250 words)

Accepted Answer

The movement began at Pravaranagar in 1950 with Asia's first cooperative sugar factory and spread across western Maharashtra. Farmers owned the factories and shared the profit, and around them grew schools, hospitals and roads. Primary agricultural credit societies and District Central Cooperative Banks became the credit spine, and dairy cooperatives such as Gokul and Warana added steady income, making the sugar belt the most prosperous rural region in the state. The decline has four main causes. Overcapacity and low crushing efficiency made many factories unviable. Delayed payment of the Fair and Remunerative Price hurt farmers and damaged trust. Boards became routes to political power, so appointments and lending followed patronage. And district banks lent on political rather than commercial criteria, building up bad loans. Many sick factories were leased or sold to private operators, and the PMC Bank collapse of 2019 exposed weak supervision of urban cooperative banks, leading to the 2020 amendment that placed them under closer RBI supervision. The remedies are professional management with independent audit, ethanol diversification, timely FRP payment and stronger bank supervision. Cooperatives remain valuable where they are run as member-owned businesses rather than political institutions.

Question 9

What lessons does Maharashtra's Employment Guarantee Scheme offer for rural employment policy? (~150 words)

Accepted Answer

Maharashtra's scheme, born in the drought of 1970-73 and given statutory force in 1977, showed that a legal right to work on demand can create a floor under rural incomes in bad years. It built assets such as roads, percolation tanks and soil-conservation works, and was funded partly by special levies, including the professional tax. It became the model for MGNREGA in 2005. Its lessons are that the right works only if wages are paid on time, work is measured honestly, and the assets created are useful and maintained. Where these conditions failed, the scheme became relief without development. Linking it to watershed and orchard development, as Maharashtra did from 1990, improved the value of the work.

Practice — Economy, Agriculture, Cooperatives & the Employment Guarantee of Maharashtra

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