Agriculture: Anchor to drowning economy

8/8/2019 Agriculture: Anchor to drowning economy

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AMITY BUSINESS SCHOOL

Dr. Arun Bhadauria

Assistant Professor & Programme CoordinatorAgribusiness Management

Friday, May 21, 2010

Agriculture & Allied Activities: Anchorto Drowning Economy

By:

Dr. Arun Bhadauria


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Report

Goldman Sachs predicts that "from 2007to 2020, Indias GDP per capita in US$terms will quadruple", and that the Indian

economy will surpass the United States (inUS$) by 2043.

In spite of the high growth rate, the reportstated that India would continue to remaina low-income country for decades to comebut could be a "motor for the worldeconomy" if it fulfills its growth potential.


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Goldman Sachs 10 Commandments

GS has outlined 10 things that India needs to do in order toachieve its potential and grow 40 times by 2050. These are

improve governance raise educational achievement

increase quality and quantity of universities control inflation introduce a credible fiscal policy liberalize financial markets increase trade with neighbours

increase agricultural productivity improve infrastructure and improve environmental quality.


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Introspection

With dipping agriculture is it reallypossible?

Do the cause and genesis of recessioncreate a void (though as an opportunity) tolook towards limping agriculture to pull upthe economy out of it?


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More Liquidity without productivity createshavoc and result in crisis followed by drastic

savings, cutting down exportsWeakening the global business as both sidesare trying to save. Result in recession followedby Depression

Give rise to investment in foreign economiescreating lending spree (as in US)

More Savings &

Large FOREX Reserve

More Exports followed by lesser Imports

More Exports followed by less current accountdeficit to substantiate the counter surplus

Reason/ Genesis of Slowdown


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The said strength may come from any sector of theeconomy i.e Agriculture, Industry & Service

Service Sector more or less depends upon theGlobal Outsourcing

Industry too need support from Global Market todevelop strength.

Only Agriculture can sustain with or without GlobalSupport and provide linkages to whole economy.

Correction within the system

Domestic Trade Strength is required to createenough Capital Formation to Counter GlobalEconomic Crisis.

To sustain Domestic Saving Spree keep safedistance from global Savings & Investmentsfollowed by Optimum FOREX Reserve


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How? India can grow with intra country trade.

India cultivate everything.

India is the significant exporter to NAFTA & EU(Notes from My Paper on Trade Blocs).

Agriculture gives an opportunity to Industry to

grow, thereby boosting its export and importtrade statistics, required to give global economyA Big Push.


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How?

Need to harness potential of diversificationin Agriculture.

Allied Agriculture provide commerciallysuitable business opportunities as beingpracticed in China & Malaysia.

IT Sector can grow on the cradle ofdevelopment of Agriculture, hardly needoutsourcing to survive.


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How?

Growth in this sector will induce the needof frequent export & import in global trade.

Savings by one will again become aninvestment for other.

Global Capital Formation will increase.

FOREX Reserve will not be significant to

be kept in reserve as trade will be through& among trade blocs, so there will hardlysuch a economic slowdown.


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Why?

Agriculture still engage more than 60 percent of thepopulation directly.

Growth in Agriculture gives real employment to eventhose who lies in rest 40 percent.

Agriculture has huge untapped potential of processing i.ethe processing of fruits and vegetables is estimated to bearound 2.2% of the total production in the country,buffalo meat is estimated at 21%, poultry is estimated at6% while marine products are estimated at 8%*. whichcan grow to the heights of 80 percent as evident fromPhillipines, Thailand, Malaysia, China and Indonesia (AllAsian Economies)

*MoFPI


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Dr. Arun Bhadauria

Assistant Professor & Programme CoordinatorAgribusiness ManagementFriday, May 21, 2010


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When?

Till the end of the current FYP (11 FYP2007-2012).

During this crisis i.e within three years.


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Where?

WTO must resolve DOHA Deadlock.

Modalities should be handled with care of

concern of economic slowdown, which isdangerous for everyone.

Trade Blocs will enjoy Tariff Escalation

(Tariff varies as per the stages ofprocessing) for Agriculture Commodities.


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Session Open for discussion

Whether

Sectors need to be competitive?

Agriculture to be considered as pivotal sectorfor overall development following Doctrine ofBalanced Growth.


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Grow with AgricultureFollow guidelines of Nature

Live with Future


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Notes & References Goldman Sachs is a leading global investment banking, securities

and investment management firm that provides a wide range ofservices worldwide.

"Indias Rising Growth Potential" (PDF). Goldman Sachs. 2007.http://www.usindiafriendship.net/viewpoints1/Indias_Rising_Growth_Potential.pdf. Retrieved 2009-06-21.

http://www2.goldmansachs.com/

Based on the views of Swaminathan Ankelesariya Aiyer, TOI Article A report from McKinsey Global Institute asserts that

technological advancement in service sector will lead theway of development in all the contemporary economicsystems. It is evident from the report that during the

period from 1995 to 2005, service sectors generated allnet job growth in high-income economies and 85 percentof net new jobs in emerging economies. Report alsosuggests that the competitiveness of sectors mattersmore than the mix.

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Agriculture: Anchor to drowning economy