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In 1980-81, the per-capita state domestic product (SDP) in the richest state, Punjab, was about three times that of the poorest, Bihar. In 2006-07, this difference increased to almost five times, with per-capita SDP of Haryana, the richest state, at Rs 48,214 against Bihar’s — still the poorest! — at Rs 10,286
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Ironically, poorer states are also those with abundant natural resources, including minerals. Part of the reason is the out-dated and unfair royalty system that gave the benefit of the rich mineral resources to the Centre, even as states had to spend on related social and physical infrastructure. Hopefully, the new revised royalty rates will address some of this imbalance.
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Nonetheless, the net effect is wide disparity in the provision of public services. Per-capita spending on development expenditure has a significant and positive correlation with per-capita SGDP rather than with higher tax effort of the richer states, implying that the funds transfer system has not succeeded in offsetting fiscal disabilities that led to high inter-state disparities in development expenditure in the first place. Public Finance & Policy (NIPFP), ET 3112 |
Kharif Production-Declines by 16% |
The deficient South-West monsoon and consequent drought like conditions in several States have adversely impacted Kharif production. As per the revised First Advance Estimates for 2009-10, total kharif foodgrains and oilseeds production is estimated at 114 million tonnes as against 135.6 million tonnes in 2008-09, registering a decline of 15.9 per cent over the previous year. Crop wise, a decline is expected for all crops except urad, tur and cotton. Agricultural production during 2009-10 hinges critically on the performance of the North East monsoon and rabi production.
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Agricultural growth may decline by two per cent-PMEAC
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The agricultural growth may decline by one to two per cent. The rice output is expected to decline by 13 million tonnes due to deficiency of rainfall to the extent of 22 per cent. However, industrial and service sector may grow at 8.6 and 8.7 per cent, respectively.
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| Decline in Deployment of Bank Credit-Oct 09 |
On a year-on-year basis, non-food gross bank credit increased by only10 per cent by October 2009 as compared with 29 per cent in the previous year. Among the major sectors, credit flow (y-o-y) to agriculture recorded the highest growth of 20 per cent (23.4 per cent during the year ended October 2008), followed by industry (14.8 per cent as against 37.4 per cent) and services sector (6.3 per cent as against 35.5 per cent). Personal loans declined by (-) 0.1 per cent from 15.0 per cent during the year ended October 2008. Within the services sector, loans to real estate and non-banking finance companies continued to record high growth of 21.2 per cent (44.2 per cent in October 2008) and 20.8 per cent (60.5 per cent), respectively. Credit to weaker sections grew (y-o-y) by 25.0 per cent in October 2009 as compared with 23.0 per cent in October 2008.RBI
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| Best & Worst of the Past Five years |
India averaged almost 9% GDP growth in the five years, 2004-09, with agriculture averaging over 4% annually, the highest rate ever. Even the poorest states -Bihar, Uttar Pradesh, Orissa, accelerated. Infrastructure and private educational and health institutions expanded faster than ever before. India then survived the Great Recession of 2008-09 with only minimal deceleration, and now expects 7.5-8% in 2009-10.
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However, Government service delivery remains terrible. Absenteeism of teachers and other staff remains scandalous, with no sign of political will to discipline the culprits. Political corruption is mind-boggling; politicians have found they can make more money out of a liberalized, dynamic private sector than they could in the old days out of inefficient public sector monopolies. ET 271209
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Climate Change-Adverse effect on Indian Agriculture
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*incomes of the small rain-fed farms in Andhra Pradesh could decline by 5 percent under modest climate change and by over 20 percent under harsher conditions, bringing farmers closer to, and in many cases, under the poverty line.
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*sugarcane yields are expected to decline considerably (by nearly 30 percent) in Maharashtra, as a result of increased moisture stress caused by warmer climate in the future, it states.
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| In the arid study regions of Andhra Pradesh, climate projections indicate substantially higher temperatures (2.3 degree Celsius - 3.4 degree Celsius, on average) and a modest increase but more erratic rainfall (of about 4 percent to 8 percent at the basin level). With high prevailing baseline temperatures, these changes will generate deteriorating agro-climatic conditions, with declining yields for all the major crops (rice, groundnut and jowar). |
| Farm incomes could substantially decline by over 20 percent. |
| Climate change to affect wheat output |
| An Expert Team constituted by FAO, in its report submitted in September 2009, concluded that for each 1 degree C rise in mean temperature, wheat yield losses in India are likely to be around 6 million tonnes per year, or around $1.5 billion(Rs 7,000 crore) at current prices. There will be similar losses in other crops and our impoverished farmers could lose the equivalent of over $20 billion (Rs 9,200 crore) in income each year. Rural women will suffer more since they look after animals, fodder, feed and water. Prof. MSS |
| Unfair Minimum Support Price |
| The union agriculture minister has asserted that the government fixes the minimum support price (MSP) by taking all costs into consideration as determined by the Commission for Agricultural Costs and Prices (CACP). This is patently wrong. CACP has categorised costs into the categories A1, A2, B1, B2, C1, C2 and C3. C3 implies that 10% of all the costs be provided as managerial remuneration to the farmer. But, in fixing the MSP, while all other costs are taken into consideration, cost C3 is not taken into account by the government. There is no justification for this. The biggest injustice is that while fixing the MSP the government is not prepared to give any profit to the farmer as that price includes only cost of production, and that too, not all of it. Farmers are the only producers who do not fix the price of their produce. Kripa Shankar, EPW 191209 |
| Only Middlemen are gaining from Food Inflation |
Farmers do not really gain much even as consumer prices hike of 20%. This anomaly of farmers suffering losses, even in crops for which the government provides support prices, while consumers pay high price persists. Clearly, fat margins accrue to the middlemen who control the series of transactions farm produce undergoes after it leaves the farmer and before it reaches the consumer.
If we want the farmer to get a remunerative price and the consumer not to be fleeced, this supply chain from the farmer to the consumer has to become efficient, competitive and organised. The farmer also needs to have an organisational form that allows them to negotiate with organised buyers with some leverage, of the kind that Amul offers its stakeholders. ET 291209 |
| Government, a food stock hoarder at a time of price rise |
| Part of the food inflation is due to Government action or the lack of it. The Government is sitting on a buffer stock of 65 million tonnes and it is not clear why this stock has not been progressively released at least in part into the open market to control prices. The stock in hand is much higher than the optimum buffer stock. At no point of time was it expected that the Government would become a food stock hoarder at a time of price rise. Shrill voices would have been raised to punish such hoarders in the private sector. |
| No improved and high yielding variety of pulses seeds |
| Prices of pulses have been rising in the retail market due to demand-supply gap. Tur has gone up to Rs 91 a kg in the capital from Rs 50 in the last one year, while urad has shot up to Rs 77 from Rs 46. Moong dal is being sold at Rs 83 compared with Rs 4 5 a kg a year earlier. Domestic pulses production is about 14-15 million tonne, but the demand is higher at 18-19 million tonnes. |
| India imports significant quantity of pulses from Canada, Myanmar and Australia. The import was 20 per cent more during the April-October period this year at 1.59 million tonnes to bridge the demand-supply gap. The main reason for this lethargic growth in yield has been absence of development of improved and high yielding variety of seeds in the country. — PTI 291209 |
| Rapid Agri Growth in Gujarat |
| A recent International Food Policy Research Institute (IFPRI) paper highlights that in Gujarat agricultural value added since 2000 grew at 9.6 per cent per annum, more than double India’s growth rate, and faster even then Punjab’s during the heyday of the Green Revolution. Some underlying measures include building of thousands of check dams, propagating drip irrigation, and a huge increase in the network of rural roads. The irrigated area has expanded at 4.4 per cent per annum, and contract farming has helped improve marketing. The cotton farmer in Gujarat is prosperous, even as his Vidarbha counterpart is forced to take recourse to suicide. BS 281209
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| KRSR/AND101/010110 |
