India’s highly diverse economy is now the toast of the world: almost everybody wants a finger in the pie. It is not just a great place to invest and rake in big profits; it is not just a huge market, potentially very big indeed with great spenders; it is not just a great place to manufacture from pins to planes with high quality and low costs; it is not just a destination not to be missed for intellectual property to be outsourced; it is nearly the Mecca of those with bags full of money and wishing to keep them flowing, if not overflowing, for a long time to come. They come to India to cut costs and ship the final product back home or elsewhere in the world and yet not lose sleep over mundane concerns because Indian managers from the shop floor to the highest levels are competent enough to take charge of all kinds of problems: they can tackle them as they come; they can foresee them and stop them from arising at a critical moment. The workmen’s skills are being upgraded all the time. That is why foreign direct investment is rising by the day. That is why foreign institutional investment in the stock markets is steady, if not surging to hot money flow levels, which cause concerns that it could be pulled out as rapidly as it came. The Finance Minister proudly announced that in the first quarter of the financial year from April 1 to the end of June, the economy, rather the gross domestic product, had grown at a healthy 8.9 per cent compared to the same quarter a year ago. This was possible even though petroleum imports were very costly, at an average price of $67 per barrel against almost $44 per barrel a year earlier. Even though petroleum prices now range around $60 per barrel, there is unlikely to be much change in the second quarter of the financial year as prices had gone up to $77 per barrel earlier this year have declined about 17 per cent now. Even though agriculture production had grown by 3.4 per cent, shortages of grains and lentils or pulses are being experienced. As their prices have risen beyond acceptable levels, measures are being taken by importing wheat, pulses, edible oils and even milk powder to try and bring the prices down. Milk producers are selling milk to private entities with the result that cooperatives like Mother Dairy and Amul are being forced to use imported milk powder to keep the supply chain going without interruption. Yet they had been forced to raise the price of milk by one rupee per litre. The shortage of milk in a country, which is the largest producer of it in the world, is an eye opener. Is it because Indians are taking more milk and milk products like ice cream, cheese, yogurt and many varieties of sweets? It would appear to be so. It could be a measure of better health, better purchasing power, increased awareness of the goodness of milk and all that goes with it. Yet, something is amiss somewhere. Even though farm production had reached a plateau of 200 million tons of grain a year in the closing years of the 20th century and early part of the New Millennium and was rising marginally or declining slightly because of natural calamities like drought and floods, leave alone cyclones and unexpected and sudden downpours, playing havoc with town and country, even a 3.4 per cent increase in agricultural growth in the first quarter is something to be impressed about. Yet, it is not so. Because deeply indebted farmers are taking their lives by committing suicide as it is the only way out of distress. This is happening in Andhra, Maharashtra , Orissa, Kerala, Karnataka and some other states. If the farmers cannot pay back their loans to banks or even interest, they have nowhere to go except to the moneylenders. Now the government is trying to save him from going to the moneylender more often by waiving interest or even debt or rescheduling it, but he is not being saved in the case of old debts from the clutches of the moneylender; that guy has to be allowed to collect his pound of flesh. There is no legal safety net from that burden. So the farmers will continue to die, perhaps in fewer numbers. There is no complete protection even if fresh loans are granted under the massive new package of Rs 17,000 crores that the Prime Minister and Mrs Sonia Gandhi as Chairperson of the United Progressive Alliance have finalized. They have asked experts to look into the farmers’ problems in totality and come up with concrete solutions. One estimate is that almost 80 million farm families are below the poverty line. It depends on the size of the family: three, five or more. If one were to arrive at a mean figure of four, at least 320 million are too poor to feed themselves, shelter themselves or clothe themselves property. That is almost one third of all Indians. The Government is trying to make Herculean efforts to save them by giving them job guarantees for 100 days of work per family or to redeploy them in cottage industries, poultry, dairy farming or work in industry, no matter how temporary. The Prime Minister would like farmers to take to cash crops like horticulture, which yield good or high prices to ensure that the farmers can support themselves. If the implication that grain production drops as a result, then grains would be imported, if productivity per hectare cannot be quickly increased. However, increased production in every bit of highly fragmented land among increasingly divided families-farms are indeed too small for any scientific practices-is absolutely necessary. That is where corporate involvement and oversight, but not ownership of land, is inevitable. The Prime Minister has reminded them of their responsibility towards equitable social and economic development of the farmers. The process may have started in a small way, but the corporate sector will have to play a key role in this area for its own good because that is where it can sell its goods, to the farmers in the villages by empowering them. Retail giants like the one being floated by Reliance Industries are already engaged in a dialogue with the farming community and the State Governments in leasing wasteland. While the farmers could be helped with quality seeds, fertilizers, bio pesticides, and perhaps even tractors on hire, wasteland is proposed to be used to grow jatropha to produce biofuels. If all this happens, and India ’s infrastructure is built up rapidly with joint public private participation, the next five years could show some excellent results and possibly a degree of poverty reduction. Power generation is already beginning to pick up at the rate of more than 5 per cent from earlier levels of one or two per cent a year.

Article source: www.loanarticles.co.uk