ASIA PACIFIC INSTITUTE OF MANAGEMENT STUDIES

SUBMITTED TO— SUBMITTED By—Pooja Verma SECTION-H

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INDIA AT GLANCE

General Information• India is a Union of States with parliamentary system of Government• Land area: 3.29 million square kilometers• Capital: New Delhi• Population: 1.027 billion (March 1, 2001)• Climate: mainly tropical with temperature ranging from 10o – 40o C in most parts• Time zone: GMT + 5 1/2 hours• Major international airports: New Delhi, Mumbai, Chennai, Kolkata, Bangalore, Hyderabad, Thiruvananthapuram• Major ports of entry: Chennai, Ennore, Haldia, Jawaharlal Nehru, Kolkata, Kandla, Kochi, Mormugao, Mumbai, New Mangalore, Paradip and Tuticorin, Vizag.

Basic Economic Statistics• GDP at current prices (2007-08): $ 1.16 trillion• GDP (PPP) (2006) = US $4156 (5th largest in the world)• GDP growth rate (2007-08) : 9%• Exchange rate: Rs.49.77/$ (as on October 29, 2008)• Foreign Exchange reserves: US $273.89 billion (as on 17.10.2008)• Exports (2007-08): US $159 billion, Growth Rate: 25.8 %• Imports (2007-08): US $239.65 billion, Growth Rate : 29%• Foreign Direct Investment (2007-08): US $32.44• Portfolio Investment (2007): US $17.23 billion

Investment OutlookA number of studies in the recent past have highlighted the growing attractiveness of India as an investment destination. According to the study by Goldman Sachs, Indian economy is expected to continue growing at the rate of 5% or more till 2050. Indian economy is slated to become the fourth largest economy by 2050. Some other conclusions are listed below:

• 2nd most attractive destination - ATKEARNEY Business Confidence Index, 2007• India can sustain 10% growth rate-OECD Survey, 2007India is the second most attractive location for foreign direct investment-UNCTAD's World Investment  Report, 2008.

• PriceWaterHouseCoopers report, March 2008 states that India will be 90% of the US economy by 2050.

ECONOMIC SECTORS IN INDIA

Service Sector Auto & Auto Components Sector

Construction Sector Fertilizers Sector

Aviation Sector Banking and Financial Sector

Engineering Sector FMCG Sector

Cement Sector Chemicals Sector

Media Sector Cement Industry

Paper Sector Chemical Industry

Pharmaceuticals Sector Construction Industry

Real Estate Sector Engineering Industry

Retail Sector Fertilizer Industry

Shipping Sector Paper Industry

Software Sector Pharmaceutical Industry

Steel Sector Real Estate Industry

Sugar Sector Shipping Industry

Aviation Industry Software Industry

Banking and Finance Industry Steel Industry

Media Industry Sugar Industry

US Industrial Sector Textile Industry

Defining Economic Growth

Economic growth is growth in the level of national income. There are various measures of national income, but the one used in the Economy model is gross domestic product. We measure growth as the percentage change in GDP. However, it is very important that we only take the percentage change in real GDP. This means the change in GDP after inflation has been taken into account.

The simplest definition of economic growth is an increase in real gross domestic product (GDP) (that is, GDP adjusted for inflation). The growth rate of real GDP is the percentage change in real GDP from one year to the next. We can express the rate of growth in, for example, the period 2007-2008, as follows:

Growth rate of GDP = [GDP(20007) - GDP(2008)]/ GDP(2007) × 100

Agriculture in India

One of the biggest success stories of independent India is the rapid strides made in the field of agriculture. From a nation dependent on food imports to feed its population, India today is not only self-sufficient in grain production but also has substantial reserves. Dependence of India on agricultural imports and the crises of food shortage encountered in 1960s convinced planners that India's growing population, as well as concerns about national independence, security, and political stability, required self-sufficiency in food production. This perception led to a program of agricultural improvement called the Green Revolution. It involved bringing additional area under cultivation, extension of irrigation facilities, the use of improved high-yielding variety of seeds, better techniques evolved through agricultural research, water management, and plant protection through judicious use of fertilizers, pesticides and cropping practices. All these measures had a salutary effect and the production of wheat and rice witnessed quantum leap.

To carry improved technologies to farmers and to replicate the success achieved in the production of wheat and rice a National Pulse Development Programme, covering 13 states, was launched in 1986. Similarly, a Technology Mission on Oilseeds was launched in 1986 to increase production of oilseeds in the country and attain self-sufficiency. Pulses were brought under the Technology Mission in 1990. After the setting up of the Technology Mission, there has been consistent improvement in the production of oilseeds. A new seeds policy has been adopted to provide access to high-quality seeds and plant material for vegetables, fruit, flowers, oilseeds and pulses, without in any way compromising quarantine conditions. To give fillip to the agriculture and make it more profitable, Ministry of Food Processing Industries was set up in July 1988. Government has also taken initiatives to encourage private sector investment in the food processing industry.

However, there are still a host of issues that need to be addressed regarding Indian agriculture. Indian agriculture is heavily dependent on monsoons. The monsoons play a critical role in determining whether the harvest will be rich, average, or poor. The structural weaknesses of the agriculture sector are reflected in the low level of public investment, exhaustion of the yield potential of new high yielding varieties of wheat and

rice, unbalanced fertilizer use, low seeds replacement rate, an inadequate incentive system and post harvest value addition.

There is an urgent need for second green revolution in Indian agriculture and taking it to a higher trajectory of 4 per cent annual growth. Following steps need to be taken to achieve this objective:

Doubling the rate of growth of irrigated area; Reclaiming degraded land and focusing on soil quality; Improving water management, rain water harvesting and watershed

development; Bridging the knowledge gap through effective extension services; Diversifying into high value outputs, fruits, vegetables, flowers, herbs

and spices, medicinal plants, bamboo, bio-diesel, but with adequate measures to ensure food security;

Providing easy access to credit at affordable rates.

Agriculture Industry Products

Bakery & Confectionery ProductsBakery, Biscuits, Chocolate Chip, Chocolates, Cocoa, Confectionaries, Confectionery, Cookies, Deoiled Cake, Drinking Chocolates, Bread, Cakes, Malted Foods, Sweets, Pastry, Toffees

Cattle Feed Supplements Cattle Feed, Animal Feed, Animal Feeding Stuffs, Fodder

Child Care & Nursery Products Baby Care Products , Baby Feeding Products

Dry Fruits & Nuts Dry fruits, Cashew Kernels , Cashew Nut, Cashews, Almonds, Roasted Dry Fruits, Peanuts, Groundnut, Walnut Kernels, Walnuts, Indian Peanuts, HPS Groundnuts

Dyes & Color Additives AZO Dyes, Bleaching Machinery, Colours, Color Additives, Colour Additives, Cottex Dyeing, Dye intermediates, Dye Makers, Dyes, Dyestuffs, Cationic Dyestufs, Acid Dyes, Reactive Dyes, Pigments, Fabric Dyeing, Textile Dyeing, Vet Dye

Edible Oil & Allied Products Coconut Oil, Cooking Fats, Cooking Oil, Cumin Seed Oil, Edible Oil , Castor Oil , Celery Seed Oil , Ajowan Oil , Margarine Oil , Refined Oil , Refined Vegetable Oil , Rice Bran Oil , Sesame Oil , Sunflower Oil , Mustard Oil , Groundnut Oil , Herb Oil, Vanaspathi Ghee, Vegetable Oil , Vegetable Oil , Oil Products, Table Margarine

Fertilizers Bio Fertilizers, Chemical Fertilizers, Agriculture Fertilzers, Natural Fertilizers, Non-hazardous Bio Fertilizers, Non-toxic Fertilizers, Organic Fertilizers, Organic Manure, Fertiliser Mixtures, Fertilisers, Fertilizer Mixtures, Fertilizers, Urea Fertilizers

Flowers, Floriculture & Dried FlowersDried Floral Items , Dried Flowers , Dry Flower , Bouquets, Cane Flowers , Lotus Pods , shola Flowers , Palm Leaf , Floriculture, Flowers, Foliage, Handmade Flowers

Food Processing Plants, Machinery & Equipment Bakery Equipment, Dairy Equipments, Dairy Farms Equipment, Food Grain

Machine, Food Processing Equipment, Frying System, Spray Dryers

Fresh, Dried, Preserved & Dehydrated Fruits and VegetablesBananas Dried , Bananas Fresh , Beans, Cherry, Cucumbers, Dried Fruits , Dried Truffles , Dried Vegetables , Carrots, Lemon, Mandarins, Mangosteens, Meslin, Shallots, Spinach, Mixed Vegetables , Mushroom, Mushroom Spawn , Oranges Fresh , Papaya, Pineapple, Potatoes Fresh , Preserved Fruits , Preserved Vegetables , Radiata Dried, Fresh Apples , Fresh Asparagus , Fresh Fruits , Fresh Grapes , Fresh Oranges , Fresh Vegetables , Gherkins, Grapes, Fresh Turnips

Liquors, Mineral Water & Beverages Beverages, Bewerages, Brandy, Aerated Water , Aerated Waters , Alcoholic Beverage , Liquors, Rum, Sandpiper, Schweppes, Soft Drinks , Spring Water , Mineral Water , Fat Liquors , Gin, Vodka, Whisky, Wine, Indian Liquor, Indian Wine

Marine Food Supplies Dried Beche-de-mer, Dry Fish, Aqua Foods, Marine Food, Marine Products, Sea Cucumber, Sea Food, Shrimps, Prawns, Frozen Marine Products, IQF

Meat & Poultry Food Bacon, Egg, Livestock, Lyoners, Meat, Mortadella, Peppero, Poultry Feed , Poultry Food , Frozen Meats , Ham

Milk & Dairy Products Cheese Spread , Condensed Milk , Curd , Dairy Products , Dairy Whitener , Dry Yeast, Butter, Cheese, Ice Cream , Ice Cream Corns , Shrikhand, Milk, Milk Cans , Milk Powder , Milk Products , Paneer, Extract Powder , Flavoured Milk , Yeast

Natural Dried, Live and Grafted Plants Live Plants , Natural Dried Plants , Natural Plants grafted Plants

Other Miscellaneous Agro Products Bajra, Barley, Dried Marine Products , Cane, Jaggery, Agro Commodities , Agro Product , Jaggery Powder , Sorbitol, Soya Meals , Starch, Sugar, Namkeens, Natural Honey , Onions, Papad, Flour, Foodstuffs, Glucose, Gluten, Groundnuts, Honey

Pet-Use Products, Feeds, Pet Furniture & Allied Products Dog Biscuits , Raw Hide Bones , Pet Feeds , Pet Products , Pet-Use Products , Equestarian Goods , Equestarian Harness

Pickles, Chutneys, Ketchups & SaucesChilly sauce , Chutney, Chutnies, Ketchups, Lemon Pickles , Mango Pickles , Sauces, Soya Sauce , Synth Vinegar , Mustard Sauce , Pepper Sauce , Pickles, Garlic Sauce , Tomato Ketchups , Tomato Sauce

Processed Food & Snacks Canned Fish , Canned Food , Malt Extract , Snacks, Soup, Soup Concentrate , Soup Powder , Porridge, Potato Wafers , Processed Chicken , Processed Foods , Processed Seafoods , Processed Snacks , Fish & Sea Food , Frozen Fish , Frozen Meat , Frozen Shrimps

Rice, Wheat, Pulses & Other Food Grains Cereals, Maida, Maize, Rice, Rice Bran Extractions , Rice Mill Machinery , Sorghum, Soymeal, Suji, Parmal, Pulses, Wheat Flour, Wheat Machinery

Seeds, Buds, Plantation & Related Products Basil Seed , Cumin seeds , Dill Seed , Buds, Cellery Seed , Hybrid Seeds , Seeds, Sesame Seeds , Sesbania Seed , Sunflower Seeds , Mustard Seeds , Oil Seeds , Plant Products , Plantation, Plants, Psyllium Seed , Fennel Seed , Fenugreek Seed , Herb Seeds , Tamarind Seed , Vegetable Seeds

Spices & Derivatives Black Pepper , Chilli Powder , Chillies, Cinnamon, Cloves, Coriander Powder , Cumin, Curry Powders , Dry Ginger , Dry Red Chilly , Elaichi, Cardamom, Chat Masala , Chatni, Anise, Indian Spices , , Salt, Spices, Spices From India, Onion Powder , Pepper Fenugreek , Seeds, Garam Masala , Ginger, Hot Spices , Turmeric, Turmeric Powder

Tea & Coffee Black Tea , Coffee, Coffee Beans , Darjeeling Teas , Assam Teas , Indian Tea , Instant Coffee , Leaf Coffee , Leaf Tea, Packaged Tea , Green Tea , Tea , Tea Bags, CTC Teas

Tobacco & Tobacco Products Beedi, Betalnut Leaves , Betalnut Supari , Bidi, Bidi Leaves , Chewing Tobacco , Cigarettes, Arecanut, Jarda, Scented Tobacco , Smoking Items , Smokking Tobbacco , Snuff, Supari, Opium, Pan, Chatni, Pan Masala , Pan Parag , Tobbacco, Tobbacco Products , Tulsi Mix , Gutkazarda, Tulsi Zarda , Tobacco, Zafrani Zarda

The post independence of Indian agriculture

The post-Independence history of Indian agriculture can be broadly grouped into four periods. Before describing them, I should mention that during the colonial era famines were frequent and famine commissions were abundant. The growth rate in food production during the 1900-1947 period was hardly 0.1 per cent. Most of the important institutional developments in agriculture emanated from the recommendations of famine commissions. The great Bengal Famine of 1942-43 provided the backdrop to India’s Independence.

It is to the credit of Independent India that famines of this kind have not been allowed to occur, although our population has grown from 350 million in 1947 to 1,100 million now.

Phase I: 1947-64

This was the Jawaharlal Nehru era where the major emphasis was on the development of infrastructure for scientific agriculture. The steps taken included the establishment of fertilizer and pesticide factories, construction of large multi-purpose irrigation-cum-power projects, organisation of community development and national extension programmes and, above all, the starting of agricultural universities, beginning with the Pant Nagar University established in 1958, as well as new agricultural research institutions, as for example the Central Rice Research Institute, Cuttack, and the Central Potato Research Institute, Shimla.

During this period, the population started increasing by over 3 per cent a year as a result of both the steps taken to strengthen public health care systems and advances in preventive and curative medicine.

The growth in food production was inadequate to meet the consumption needs of the growing population, and food imports became essential. Such food imports, largely under the PL-480 programme of the United States, touched a peak of 10 million tonnes in 1966.

Phase II: 1965-1985

This period coincides with the leadership of Lal Bahadur Shastri and Indira Gandhi, with Morarji Desai and Charan Singh serving as Prime Ministers during 1977-79. The emphasis was on maximising the benefits of infrastructure created during Phase I, particularly in the areas of irrigation and technology transfer. Major gaps in the strategies adopted during Phase I were filled, as for example the introduction of semi-dwarf high-yielding varieties of wheat and rice, which could utilise sunlight, water, and nutrients more efficiently and yield two to three times more than the strains included in the Intensive Agriculture District Programme (IADP) of the early 1960s. This period also saw the reorganisation and strengthening

of agricultural research, education and extension, and the creation of institutions to provide farmers assured marketing opportunities and remunerative prices for their produce. The National Bank for Agriculture and Rural Development (NABARD) was set up. All these steps led to a quantum jump in the productivity and production of crops such as wheat and rice, a phenomenon christened in 1968 as the Green Revolution. C. Subramaniam (1964-67) and Jagjivan Ram provided the necessary public policy guidance and support.

The Green Revolution generated a mood of self-confidence in our agricultural capability. The gains were consolidated during the Sixth Five Year Plan period (1980-85) when for the first time agricultural growth rate exceeded the general economic growth rate. Also, the growth rate in food production exceeded that of the population. The Sixth Plan achievement illustrates the benefits arising from farmer-centred priorities in investment and in the overall agricultural production strategy.

Phase III: 1985-2000

This was the era of Rajiv Gandhi, P.V. Narasimha Rao and Atal Bihari Vajpayee, with several other Prime Minister serving for short periods.

This phase was characterised by greater emphasis on the production of pulses and oilseeds as well as of vegetables, fruits, and milk. Rajiv Gandhi introduced organisational innovations like Technology Missions, which resulted in a rapid rise in oilseed production. The Mission approach involves concurrent attention to conservation, cultivation, consumption, and commerce. Rain-fed areas and wastelands received greater attention and a Wasteland Development Board was set up. Wherever an end-to-end approach was introduced involving attention to all links in the production-consumption chain, progress was steady and sometimes striking as in the case of milk and egg production. This period ended with large grain reserves with the government, with the media highlighting the co-existence of “grain mountains and hungry millions.” This period also saw a gradual decline in public investment in irrigation and infrastructure essential for agricultural progress as well as a gradual collapse of the cooperative credit system.

Phase IV: 2001 to the present day

Despite the efforts of Prime Ministers Atal Bihari Vajpayee and Manmohan Singh, this phase is best described as one characterised by policy fatigue, resulting in technology extension and production fatigues. No wonder that the farmers, who keep others alive, are now forced to take their own lives and 40 per cent of them want to quit farming, if there is an alternative option.

The agricultural decline is taking place at a time when international prices of major foodgrains are going up steeply, partly owing to the use of grain for ethanol production. Land for food versus fuel is becoming a major issue. For example, the export price of wheat has risen from $197 a tonne in 2005 to $263 a tonne in 2007. Maize price has gone up from about $100 a tonne in 2005 to $166 a tonne now. International trade is also becoming free but not fair. Compounding these problems is the possibility of adverse changes in rainfall, temperature, and the sea level as a result of global warming. Melting of Himalayan ice and glaciers will result in floods of unprecedented dimensions in north India. If agricultural production does not remain above the population growth rate and if the public distribution system is starved of grain, there is every likelihood of our going back to the pre-Independence situation of recurrent famines. The grain mountains have disappeared and we are today in the era of diminishing grain reserves, escalating prices, and persistence of widespread under-nutrition.

Where do we go from here?

The Green Revolution of the 1960s was the result of synergy among technology, public policy and farmers’ enthusiasm. The post-60th anniversary era in agriculture will depend upon our determination to implement Jawaharlal Nehru’s exhortation, “Everything else can wait, but not agriculture” in both letter and spirit.

If farm ecology and economics go wrong, nothing else will go right in agriculture. This is the principal message of the current agrarian crisis. The agrarian crisis is likely to spread if the economics of small-scale farming is not improved. At the same time, State governments should not promote policies for ecocides (that is, acts of ecological suicide such as free electricity to pump groundwater, leading to the exhaustion of aquifers). How can we resolve the crisis? The first and foremost priority should go to making the era of farmers’ suicide history.

Agricultural Finance

Credit: Availability of adequate credit is vital for every sector and agriculture is not an exception. In India, Commercial Banks, Cooperative Banks, and Regional Rural Banks ( RRBs) are responsible for smooth flow of credit to agricultural sector. But a huge unorganized market exists for credit to agricultural sector in India, which provide timely fund to this sector but at the exorbitant rate of interest. Among organized creditdisbursement to agriculture commercial banks play a vital role with a share of about 70% where as cooperative sector and RRBs contribute 20% and 10

% respectively.Kisan Credit Card (KCC) scheme was introduced to provide adequate and timely support from the banking system to the farmers for their cultivation needs. This scheme has made rapidprogress and more than645 lakh cards issued up to October 2006.The 'Farm Credit Package' announced by the Government of India in June 2004 stipulated doubling the flow of institutional credit for agriculture in ensuing three years. Annual targets for this package are being surpassed in the two consecutive years from its introduction and it is likely to surpass in the third year also.

Insurance: Insurance is a prime necessity to mitigate uncertainty that persists in agriculture. In India, agriculture is still affected by such factors, which are beyond control of human being. So, there is a great need for agricultural insurance in India. Keeping this in mind, Government of India in coordination with the General Insurance Corporation of India (GIC), had introduced National Agricultural Insurance Scheme (NAIS) from rabi 1999-2000 season. The main objective of this scheme is to protect the farmers against losses suffered by them due to crop failure on account of natural calamities. Agricultural Insurance Company of India (AICIL) which was incorporated in December 2002 took over the implementation of NAIS.AICIL introduced Rainfall Insurance Scheme called 'Varsha Bima' during 2004 southwest monsoon period. Varsha Bima provided for five different options suiting varied requirements of farming community:

1. Seasonal rainfall insurance based on aggregate rainfall from June to September.2. Sowing failure insurance based on rainfall between June 15 and August 15.3. Rainfall distribution insurance with the weight assigned to different weeks June and September.4. Agronomic index constructed on the basis of water requirements of crops.5. A catastrophe option covering extremely adverse deviation of 50% and above in rainfall during the season.

During kharif 2006, this Varsha Bima scheme is being implemented in around 150 districts covering 16 states across the country. AICIL is also piloting another weather related insurance product for mango and coffee.

Rural Infrastructure Development Fund (RIDF): RIDF was announced by the Government of India in 1995-96 to boost public sector investment in agriculture and rural infrastructure. The Fund is raised from the commercial banks to the extent of their short fall in agricultural lending as priority

sector. The activities, which have been made eligible for loans from RIDF, include rural roads and bridges, irrigation, mini and small hydel projects,community irrigation wells, soil conservation, watershed development and reclamation of waterlogged areas, flood protection, drainage, forest development, market yard, godowns, apna mandi, rural haats and other marketing infrastructure, cold storages, seed/agriculture/horticulture farms, plantation and horticulture, grading and certifying mechanisms such as testing and certifying laboratories, fishing harbors/jetties, reverinefisheries, animal husbandry, modern abattoir, drinking water supply, infrastructure for rural educational institutions, public health institutions, construction of toilet blocks in existing schools and 'pay and use' toilets in rural areas, village knowledge centers, desalination plants in coastal areas, infrastructure for information technology in rural areas, and construction of anganwari centers.

Micro Finance: Micro finance scheme has been introduced by National Bank for Agriculture and Rural Development (NABARD), the apex bank for agriculture and rural development in India, to improve the access of the rural poor to formal institutional credit and other financial products. In all 547 banks, which include 47 commercial banks, 158 RRBs, 342 cooperative banks are now actively involved in the operation of Self Help Group (SHG)-Bank Linkage Programme to spread the facility of micro finance to the needy small and marginal farmers and tiny entrepreneurs. The programme has enabled nearly 329 lakh poor families in the country to gain access to micro finance facilities from the formal banking system.

Capital Formation in Agriculture: The share of the agriculture sector's capital formation in G.D.P. declined from 2.2% in the late 1990s to 1.9% in 2005-06. Stagnation or fall in the public investment in irrigation is partly responsible for this fall. However there is indication of a reversal of this trend with public sector investment in agriculture accelerating since2002-03.The share of public investment in gross investment in agriculture increased by 6.5 percentage points from 1999-2000 to reach 24.2% in 2005-06.

Indian agriculture and WTO

THE BLAME FOR overflowing godowns and falling agricultural product prices is being placed at the door of import liberalisation in general and the World Trade Organisation in particular. The impending removal of the last of the quantitative restrictions (QRs) on all agricultural products has added to the fears for the future of Indian agriculture. While contractual obligations and import liberalisation forced on the Government have indeed considerably increased the exposure to the world market, there has been a tendency to shift the blame for domestic problems on to external factors. There are four different sets of WTO-related issues confronting Indian agriculture and public debate frequently confounds them by seeing them as one when in fact they are largely distinct.

The immediate challenge is what will follow the removal of QRs in April. There is no reason to believe that there will be a flood of imports, only that protection can no longer be provided by a ban on imports but by customs duties. With the plugging of loopholes that existed in the form of zero tariffs on cereals and dairy products, agriculture will for now continue to enjoy a measure of protection. Where the Government could fail - as it did in the case of edible oil imports - is by moving slowly on increasing tariffs whenever global or domestic prices fall. However, the fairly high levels of tariff protection that India can now invoke could be under threat when the next phase of multilateral negotiations on agriculture begins at the WTO.

This is the second issue, on which the Government has approved a set of proposals which will constitute India's initial negotiating stance. These talks will be completed only years down the line. In its first proposals, the Government appears to have chosen to place greater importance on protecting agriculture than on liberalising farm exports. This is apparent from the demand for constituting a ``Food Security Box'' that will facilitate higher levels of protection and codify provisions that already exist in WTO agreements. An influential section in the policy-making establishment has been pushing for India to become an aggressive agricultural exporter. But the twin of joining the side of the agricultural exporters at the WTO is a lowering of import protection. While India continues to demand adequate market access for its exports, the Government has wisely decided against too aggressive a position on liberalisation of trade in agriculture. The third issue is the functioning of the 1994 WTO deal on agriculture, which far from boosting trade has been used by the rich countries to increase farm subsidies. Experts in the country have demanded a review of this agreement, but such a review underlies the preparatory work now going on at the WTO for future talks. Besides, India has officially already made proposals to address the ``implementation problems'' in the farm pact. Going further may force India to offer more concessions on imports. A fourth issue is intellectual property protection. Compelled as India was in

1994 to agree to provide sui generis protection to plant varieties it had the choice of drafting its own legislation. This could have contained innovative provisions to protect traditional rights. Yet, six years of procrastination and inter-Ministry squabbling have meant that no legislation has been enacted, opening the door to disputes at the WTO from other countries.

When imports have caused problems they have followed either leaden-footed decision-making or the Government placing the interests of the consumers above that of the farmers. Both were evident in the setting of tariffs for edible oils (mainly palmolein) which were raised only recently. The larger problems that Indian farmers face are the result of high costs, low productivity, falling public investment, poor market development and ultimately limited purchasing power among one billion people. All these are the making of domestic policies.

Agriculture Growth Rate in India GDP

Agriculture Growth Rate in India GDP had been growing earlier but in the last few years it is constantly declining. Still, the Growth Rate of Agriculture in India GDP in the share of the country's GDP remains the biggest economic sector in the country.

India GDP means the total value of all the services and goods that are produced within the territory of the nation within the specified time period. The country has the GDP of around US$ 1.09 trillion in 2007 and this makes the Indian economy the twelfth biggest in the whole world.

The growth rate of India GDP is 9.4% in 2006- 2007. The agricultural sector has always been an important contributor to the India GDP. This is due to the fact that the country is mainly based on the agriculture sector and employs around 60% of the total workforce in India. The agricultural sector contributed around 18.6% to India GDP in 2005.

Agriculture Growth Rate in India GDP in spite of its decline in the share of the country's GDP plays a very important role in the all round economic and social development of the country. The Growth Rate of the Agriculture Sector in India GDP grew after independence for the government of India placed special emphasis on the sector in its five-year plans. Further the Green revolution took place in India and this gave a major boost to the agricultural sector for irrigation facilities, provision of agriculture subsidies and credits, and improved technology. This in turn helped to increase the Agriculture Growth Rate in India GDP.

The agricultural yield increased in India after independence but in the last few years it has decreased. This in its turn has declined the Growth Rate of the Agricultural Sector in India GDP. The total production of food grain was 212 million tonnes in 2001- 2002 and the next year it declined to 174.2 million tonnes. Agriculture Growth Rate in India GDP declined by 5.2% in 2002- 2003. The Growth Rate of the Agriculture Sector in India GDP grew at the rate of 1.7% each year between 2001- 2002 and 2003- 2004. This shows that Agriculture Growth Rate in India GDP has grown very slowly in the last few years.

Agriculture Growth Rate in India GDP has slowed down for the production in this sector has reduced over the years. The agricultural sector has had low production due to a number of factors such as illiteracy, insufficient finance, and inadequate marketing of agricultural products. Further the reasons for the decline in Agriculture Growth Rate in India GDP are that in the sector the average size of the farms is very small which in turn has resulted in low productivity. Also the Growth Rate of the Agricultural Sector in India GDP has declined due to the fact that the sector has not adopted modern technology and agricultural practices. Agriculture Growth Rate in

India GDP has also decreased due to the fact that the sector has insufficient irrigation facilities. As a result of this the farmers are dependent on rainfall, which is however very unpredictable.

Agriculture Growth Rate in India GDP has declined over the years. The Indian government must take steps to boost the agricultural sector for this in its turn will lead to the growth of Agriculture Growth Rate in India GDP.

Agriculture in Interim Budget 2009-2010(Speech of Pranab Mukherjee, Minister of Finance February 16, 2009)

25.        Never losing sight of our commitment to the welfare of Aam Aadmi and recognizing that 60 per cent of our population lives in villages, focused attention has been given by our Government to the agriculture sector:

(i)       In the period between 2003-04 and 2008-09, our Government increased the plan allocation for agriculture by 300 per cent.

(ii)      The Rashtriya Krishi Vikas Yojana was launched in 2007-08 with an outlay of Rs.25 thousand crore, to increase growth rate of agriculture and allied sector to four per cent per annum during the Eleventh Plan period. The scheme has encouraged State Governments to take initiatives to develop the agricultural sector.

(iii)     On June 18, 2004 our Government had announced a package for doubling the flow of credit to agriculture. The credit disbursements have already gone up from Rs.87 thousand crore in 2003-04 to about Rs.2.5 lakh crore in 2007-08 marking a three fold increase. To strengthen the short-term co-operative credit structure, the Government is implementing a revival package in 25 States involving a financial assistance of around Rs.13 thousand five hundred crore.  Government will continue to provide interest subvention in 2009-10 to ensure that farmers get short term crop loans upto Rs.3 lakhs at 7 per cent per annum.

(iv)     The Agricultural Debt Waiver and Debt Relief Scheme for farmers, announced in the last budget speech, was implemented by June 30, 2008 as scheduled.  The Scheme has been able to restore institutional credit to indebted farmers. As per early reports, the total debt waiver and debt relief so far, amounts to Rs.65 thousand three hundred crore covering 3.6 crore farmers.

(v)       Our Government is committed to ensuring “food security” in the country and meeting the food requirement of the poor under the Targeted Public Distribution System (TPDS).  In spite of higher procurement costs and higher international prices during the last five years, the central issue prices under the TPDS have been maintained at the level of July 2000 in case of Below Poverty Line (BPL) and Antyodaya Anna Yojana (AAY) categories and at July 2002 levels for Above Poverty Line (APL) category.

(vi)     Our Government has ensured remunerative prices for the farmers for their crops.  Since 2003-04, Minimum Support Price (MSP) for the common variety of paddy was increased from Rs.550 to Rs.900 per quintal for the crop year 2008-09. In case of wheat the increase was from Rs.630 in 2003-04 to Rs.1,080 per quintal for the year 2009.

Key points of Agricultural sector in Interim Budget 2009-2010

Focused attention to agriculture. Country’s agriculture outlook is encouraging. Agriculture grew by 3.7 per cent per annum Plan allocation for farm sector hiked 300 percent in past five years. Agriculture credit disbursement gone up. Agriculture credit has been increased three-fold to Rs.2,50,000 cr.

Farm debt worth Rs.65,300 crore waived. Government will continue to provide additional subsidy to farmers Corpus of Rural Infrastructure Development Fund hiked to Rs.14,000

crore from Rs.5,500 crore Bharat Nirman, the time-bound plan for building rural infrastructure

receives Rs 40,900 crore. This package has six components – rural roads, telephony, irrigation, drinking water supply, housing and electrification.

Exports in Agriculture sector in 2007-08

According to the government's agri-trade promotion body, APEDA, India's exports of agricultural and processed food products posted a 38 per cent increase in the 2007-08 fiscal, bolstered by an increase in shipments of coarse cereals like maize, jowar and barley. Export figures for agricultural products touched US$ 6.59 billion in 2007-08, against US$ 4.79 billion in the previous fiscal.

According to a National Agricultural Cooperative Marketing Federation of India Limited (NAFED), in the period April-August 2008,

onion exports reached 710,000 tonnes against 380,000 tonnes in the corresponding period last year.

According to the Coffee Board, India's coffee exports saw a significant rise of 6 per cent during the first eight months of 2008.

India's natural rubber exports have increased by 38 per cent in the April-July 2008-09. Total exports increased to 23,998 tonnes during April-July as against 14,816 tonnes in the corresponding period of the previous financial year.

Spice exports registered a 28 per cent increase in revenue in the first quarter of 2008-09. Overall export earnings went up to US$ 329.60 million against US$ 260.57 million last year. Spice exports are likely to rise by 18 per cent to US$ 1.3 billion in 2008-09.

India exported 1.40 million tonnes of oil meal in the first three months of the current financial year, up 70 per cent from the corresponding period last year.

India's sugar exports are expected to touch a record 4.2 million tonnes (MT) in the production year upto September, exceeding earlier estimates of 3.5 MT.

Contribution of various agricultural commodities in world exports hasbeen listed below:

Product Percentage share in World ExportLac, gums, resins, vegetable products 10.0Vegetable planting materials, vegetable products 4.9Coffee, tea, mate & spices 3.7Marine products 2.3Residues, waste of food industry, animal fodder 2.1Cereals 1.3Fruits & nuts 1.1

Needed, a new deal: Progress in agriculture must be measured principally by the growth rate in the net income of farmers.

About 35 districts identified by the Union Ministry of Agriculture as the most affected by the agrarian crisis should be developed into Special Agricultural Zones (SAZ), where integrated attention will be paid to natural resources conservation and enhancement, eco-farming, improved local level consumption to overcome malnutrition, and pro-small farmer commerce. Most of these areas are rainfed and attention will have to be paid to the generation of multiple livelihood opportunities. These areas require the joint efforts of agricultural scientists, extension agencies, policy makers, and mass media. Unless the various government departments/ Ministries

dealing with agriculture, animal husbandry, fisheries, forestry, environment, agro-processing and agri-business, irrigation, commerce, rural development and finance work on the principles of convergence and synergy, it will be difficult to find lasting solutions to the problems of small farmers. The major purpose of a Special Agricultural Zone is ecological restoration and the strengthening of the work and income security of farm families with about one hectare or less of land. While the Special Economic Zone (SEZ) is designed to enhance trade and export income involving mega-investment by the private sector industry, the SAZ is needed to save the lives and livelihoods of small farmers and landless labour by providing key centralised services to support decentralised small-scale production as well as market and income security. The SAZ concept will provide an effective method to end farmers’ suicides by creating a platform for collective action by all the departments and agencies concerned of the Central and State governments, private sector industry and civil society organisations. The present relief measures are fragmented both in design and implementation, and unless they are replaced with a holistic approach, with special emphasis on minimising risks and maximising net income, the crisis will get worse.

While carefully designed SAZs can help end the era of farmers’ suicides, the emerging larger agricultural production and food security crisis can be managed if the following steps are taken to achieve an evergreen revolution, leading to the enhancement of productivity in perpetuity without associated ecological harm. The five basic components of an evergreen revolution strategy are:

Conservation of prime farmland for agriculture and soil health care and enhancement, issue of Soil Health Cards indicating the organic matter and macro- and micronutrient status of the soil; Water harvesting, management and conjunctive use of surface, rain, ground and treated effluent water and safeguarding water quality;Credit and insurance reform;

Low-risk and environmentally friendly Green Technologies (such as integrated pest and nutrient management) and the provision of the needed inputs at the right time and place and at affordable cost;

Assured and remunerative marketing.

These five steps need to be taken and implemented in an integrated manner, so that we generate an Ever-green Revolution Symphony. The above steps are common to all farming zones. However, differentiated steps are needed in the following three areas:

First, we must defend the gains already made in the Green Revolution areas of Punjab, Haryana, and western Uttar Pradesh. This heartland of the

Green Revolution, or India’s fertile crescent, is in a state of acute ecological and economic distress. Conservation farming and green agriculture should replace exploitative agriculture. Public policies promoting ecocides should be withdrawn and replaced with incentives for conservation farming. This region will remain a major source of foodgrains for the public distribution system, and hence needs urgent attention.

Secondly, we must extend the gains to additional areas like Bihar and the entire eastern India, which possess good soil and water resources, as well as to rainfed, hill and coastal areas. A second fertile crescent can be created immediately in the region comprising Bihar, eastern Uttar Pradesh, Chhattisgarh, West Bengal and Assam, where the untapped production reservoir even with technologies on the shelf is high.

Finally, we should make new gains, particularly in the areas of farming systems diversification and value addition. There is now a mismatch between production and post-harvest technologies. This should end. A quality literacy and value-addition movement should be launched.

CONCLUSION:

Sustainable Agriculture: Organic FarmingIn the recent decades, there is an increasing demand of organic foods in the developed world. Organic farming is an important pillar of sustainable agriculture, which is beneficial for producers and consumers both. India has a great potential for organic farming using traditional wisdoms prevailing in the villages of India. In fact, a large section of IndianAgriculture uses more or less organic method of farming using minimum level of chemical inputs. Promotion of organic farming in India could prove beneficial to increase share of Indian agricultural export in the world export.

“ We should have targeted 10 per cent agricultural growth which would have helped remove poverty in the long run rather than 3 per cent at present.”- Dr. P.Chidambarm.