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FRUITpunch by Sunil Vadehra. September 23. 2015-Infrastructure





Fruit Punch by Sunil Vadehra-fnbworld


Deep Distress: An Indian Farmer-fnbworld


have often wondered how our current approach of development will achieve the expected growth. Moreover, what would be this growth like? Who are expected to be the likely beneficiaries? What segments of society will continue to be outside the ambit of this growth, when that happens? Last but not least, will this result in a sustainable growth? There is no end to the questions that constantly keep getting added.

We have miserably failed in achieving improvement in our infrastructure sector. This is a heavy investment sector and myriad state governments with limited resources at their command can not be expected to be driving it on their own.  And, the private sector - both domestic and international do not seem to be coming forward at a scale, deemed necessary. They too have been waiting for much talked about reforms in various areas like, labour, multiple licensing and permissions, judicial reforms, taxes, etc. to give them the confidence of investing long term. Without these reforms making the headway on ground, the investment environment in infrastructure is unlikely to improve soon. Unfortunately, we still do not seem to be even thinking of an alternative plausible approach. A lot needs to be done on expenditure control and plugging the leakages, which can be diverted towards the budget for infrastructure.

Include education in infrastructure-fnbworld


The Central Government’s initiative of 'Make in India' is well meaning, however, with infrastructure lagging behind and necessary reforms not seemingly happening in near future, there is anxiety on how successful this 'Make in India' can possibly see fruition. A lot of work will have to be done before any meaningful success can be achieved.  Further, with the global economic situation being what it is, exports potential is very limited. We have a big advantage of a huge domestic market. In fact, this is what we try to attract global investors to come and invest in India. However, is size of market alone sufficient, without ensuring the increase in purchasing power of a large percentage of total population? Not quite. This may also be bothering both domestic and international investors before they take a huge plunge and invest in manufacturing sector. As such the first steps to achieve our objectives should be to set this deficiency right - with demand increasing with improved purchasing power, manufacturing will automatically get the desired impetus.

Our first focus should be on our rural sector that accounts for more than sixty per cent of population. Within that, agriculture is the largest sector. It is therefore important, in fact essential, to analyse what is wrong in our agriculture sector and come up with policy reforms, to bring it up. This will also help us ensure, something we can not avoid, that we are never faced with food insufficiency. This is a real threat today when agriculture is in danger because of extremely poor or even negative return on investments. More and more farmers committing suicide is worrying enough indication, confirming this apprehension. Agriculture too should be included in the 'Make in India' plan. After all, survival of our farmers is at stake. With agriculture continuing to be a non remunerative business, there is a serious threat that the activity will see a downward trend in terms of farmers switching to other activities for survival. The whole gambit of minimum returns on investment in agriculture with a minimum subsistence returns, needs to be undertaken. Any delay in setting our agriculture right can have disastrous consequences.

A detailed study should be undertaken of each of the essential crop grown in India. To a large extent it is dependent on the climatic conditions of different regions. Actual cost of growing each of such crop should be worked out including the effort cost of the farmers/ family members put in to achieve the output, by applying minimum wage criteria for such effort. The average volume of output of crop per unit area estimated on factual basis. The price of the product should then be worked out to give a minimum return on investment (ROI) to the farmer.


In order to control resultant inflation, the Govt can and should subsidize the farmers on the difference between the actual return that farmer should get and price at which Govt would want to be made available to consumers. This would ensure that subsidies are well utilized with desired outcome. This would ensure farmers continuing the activity of farming. Our agriculture scientists should be constantly working toward ways and means of improving productivity of farming and ensure dissemination of information and educating the farmers on the same. This will result in a substantial increase in purchasing power of a large percentage of our population which in turn will result in increase in demand of manufactured products. 

It is this increased demand of consumers that will attract investment in manufacturing sector without us having to go all around asking businesses to invest in India. The policy of acquisition of agriculture land too needs to be carefully reviewed. Farming is a business activity which also contributes to national needs. Through the land acquisition, we may be killing this 'essential' business activity and in return promising the farmer a job in a few years of time. The big question is, what kind of job is he likely to be offered? A security guard, is it unskilled labour and Would that be ethical or equitable? What is the likely time gap between acquisition of farmer's land and job opening? A better option would be for the Govt to invest in agriculture research, whereby the productivity can be improved. This would also open up opportunities for food processing industry in a big way

Another focus area should be to improve the skill base of people, by a structured improvement in our education system and improved mechanism for specialized skills. Our implementation of projects has been our undoing thus far and efforts to train relevant persons in project management processes and compliance processes, will help us in improving the quality of output as well as productivity. This itself will generate additional resources for investments. We have already seen that almost all major projects undertaken by the Govts, face huge delays and cost overruns, so much so that at times the cost overrun amounts to multiple of original cost estimated. Likewise some other identified priority sectors/activities can be identified and special task forces assigned to work on the same, in a time bound manner.

Increase in demand size, improved productivity and quality of products, increase in purchasing power of people, availability of raw material in the country, reforms in administrative processes like licensing, permissions et al are bound to ensure a rapid growth of economy of the nation. We have the potential and we have the capacity. We need the will and resolve to act.

The Indian youth, comprising over 60 % of the population is losing patience. They may not wait too long before they decide to take controls in their hands; the danger is that this youth power, if not channelized in positive manner, may use their immense energy in a way, we may regret. The time to act is now.

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