First food: business of taste
Good Food is First Food. It is not junk food. It is the food that connects nature and nutrition with livelihoods. This food is good for our health; it comes from the rich biodiversity of our regions; it
India
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Unemployment as a global economic malady
Unemployment is a common global economic malady, the level of which distintly varies between developed and under developed nations with Keynesian involuntary and frictional type in respect of developed nation and structural type as regard to under developed country like India which contributes to maximum growth of population and insignificant economic growth. Under employment or disguised employment has intensified its dimensions mainly in the rural sector where despite having capacity and willingness, persons fail to avail any gainful activities and as such job seekers out-number the job availability creating a major wastage of manpower. Unemployment in our country is partly due to overwhelming growth of population which has occurred in view of immigration from earstwhile East Pakistan and partially due to non-availability of land, less productivity, lack of industrial infrastructure, haphazard growth of educational institutions and expansion of education which is responsible for cropping up of new entrants in an already over crowded labour market. Agriculture being a seasonal activity fails to provide employment to rural masses throughout the year while perennial activity is not available in reality owing to excessive pressure of population. Exodus from rural areas coupled with slow pace of industrialisation has proved to be a constrain in providing employment opportunity to the growing urban population. Rapid expansion of general education mingted with slow growth of technical and vocational facilities has resulted in a peculiar educated unemployment problem. Accurate estimation of unemployment has become a tough task in view of ever increasing unemployment and under employment and failures of employment exchanges in recording correct figures. While unemployment in this State as a percentage of labour force has become double as compared to the country within 1985-2000 as per NSSO report, it is estimated to be 10.9% of total labour force with a total of 13 lakh (71%) registered educated job seekers, HSLC passed (51%) out-numbered HSSLC passed (30%) and graduates (16%) while technical and post graduate job seekers constitute a very minimal (3%) percentage. Placement of job seekers increased to 16% in between 2004 and 2005 constituting minimal (0.5%) increase in public sector and 9.3% increase in private sector with nearly 31% women employment in organised sector. Rural and women unemployment has become three times to all-India rate having acute unemployment among educated. Most of the self employed or partially employed youth bother a little to inform the employment exchange about their absorption which is also responsible for non-capturing of accurate employment situation. According to the NSSO report, the number of unemployed in this State is 18 and 24 per 1000 respectively in rural and urban area as against only 9 and 19 respectively in national level indicating a greater dimension of the problem in this State. According to the task force, the rate of unemployment in this State increased from 7.96 in 1993-94 to 8 per cent in 1999-2000 which is quite high compared to all India (nearly 7%), 2.93% of Himachal Pradesh and 3.06% of Rajasthan. Youths in this State are mostly interested in Government jobs in lieu of self employment or employment in private venture, which has enhanced the demand for jobs leading to major corruption in the recruitment policy. Ban on creation of posts and restriction on filling up vacancies has created mounting unemployment problem resulting in a grave political, economic and social disorder. Despite shooting up of GDP, employment growth in the State declined significantly within 15 years in agriculture. The call of the hour is to generate job opportunities through filling up vacancies considering intellectual achievement. It is necessary to locate certain sectors where unemployed youths can be accommodated suitably leaving aside Govt assignment. According to a study, the employment elasticity of various sectors varied significantly with primary sector of elasticity 0.74, manufacturing sector 0.19, trade and commerce 0.37 with overall average of 0.45. ILO having its goal of promoting opportunities for both the sex and ensuring security, freedom and dignity depicted persistent unemployment and dismal scenario of the world's employment situation in its
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PC budgets for early elections
Rs 60k-crore farm loan waiver, I-T exemption limit raised. P Chidambaram unveiled a Budget cleverly designed to win him many popularity contests. There were concessions on the income tax, reductions in customs and excise duties, and the mother of all farm loan waivers. While playing to multiple galleries, the finance minister also managed to reduce the fiscal deficit to lower than the target set under the fiscal responsibility law, and showed progress on the revenue deficit. Along the way, he designed his announcements so as to attack the twin problems confronting the economy: inflation (the excise and customs cuts will help lower prices) and falling consumer demand (lower tax rates for small cars and two-wheelers, and more money in people's pockets from the income tax concessions). Keeping in mind the Congressman's favoured
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Farm distress gets Rs 60,000 cr breather
DEBT WAIVER The loan waiver will benefit about 30 million small and marginal farmers. In an apparent move to appease the huge rural vote bank, the government today announced the biggest-ever agricultural loan waiver package that will cost the exchequer a whopping Rs 60,000 crore. The move will benefit about 30 million small and marginal farmers, whose debts worth Rs 50,000 crore will be completely waived, and about 10 million other farmers. Under this package, while all the outstanding unpaid loans of small and marginal farmers will be totally waived, the other farmers will have to repay only 75 per cent of the borrowed amount under one-time settlement arrangement. Announcing the largesse in his budget speech, Finance Minister P Chidambaram said the agricultural loans, which were restructured or rescheduled in 2004 and 2006, would also be eligible for loan waiver and concessional repayment through one-time settlement arrangement. All agricultural loans disbursed by the scheduled commercial banks, regional rural banks and cooperative credit institutions up to March 31, 2007, and overdue as on December 31, 2007, but not repaid till today, would be covered under this debt waiver-cum-relief scheme. The tillers of up to one hectare of land would be considered marginal farmers and those having one to two hectares of land would be deemed small farmers. The finance minister announced that the implementation of the scheme would be completed by June 30, 2008. The farmers would become entitled for fresh agricultural loans from the banks after the debt waiver or signing an agreement for repayment of 75 per cent amount under the one-time settlement arrangement. He, however, did not elaborate on how the banks would be compensated for the waived loans. Referring to the indebtedness of the farmers, Chidambaram pointed out that the government had appointed a committee under the chairmanship of R Radhakarishna to examine all aspect of this issue. "The committee had made a number of recommendations but stopped short of recommending waiver of agricultural loans.' The finance minister, however, sought to justify this populist move, maintaining that the government was conscious of the dimensions of the problem and was sensitive to the difficulties of the farming community. He also asserted that the government had carefully weighed the pros and cons of debt waiver and had also taken into account the resource position while taking this decision. Chidambaram told Parliament that notwithstanding some shortcomings, the growth of agricultural credit had been impressive. "We will exceed the target set for 2007-08. For 2008-09, I propose to set a target of Rs 2,80,000 crore.' he said. He thanked the commercial banks and regional rural banks which, together, accounted for between 75 and 79 per cent of agricultural credit disbursed during the year. Chidambaram said short-term crop loans would continue to be disbursed at an annual interest rate of 7 per cent, adding that an initial provision of Rs 1,600 crore had been made for interest subvention in 2008-09.
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Irrigation outlay raised 81%
IRRIGATION Outlay increased to Rs 20,000 crore. In order to provide more stimulus to the agriculture sector, the government has increased the outlay for irrigation projects by over 81 per cent. The outlay has been increased to Rs 20,000 crore for 2008-09, from Rs 11,000 crore for 2007-08. The Centre's contribution to the outlay is Rs 5,550 crore, up 44 per cent over the previous year's Rs 3,850 crore. The Centre's contribution will be disbursed to states in the form of grants. The government is investing heavily in the Accelerated Irrigation Benefit Programme (AIBP) and the Rainfed Area Development Programme (RADP), along with other water resources programmes. Under the AIBP, 24 major and medium irrigation projects and 753 minor schemes will be completed in this financial year, creating additional irrigation potential of 500,000 hectares. The RADP, with an allocation of Rs 348 crore, has been finalised for implementation in 2008-09. Under this, priority will be given to the areas that have not benefited from watershed development schemes. The centrally-sponsored scheme on micro irrigation launched in January 2006 has covered an area of 548,000 hectares under drip and sprinkler irrigation so far. With an aim to cover another 400,000 hectares, an allocation of Rs 500 crore has been made for 2008-09. Under the project, the states
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Politics over economics
This Budget asks and answers some rather big questions. Begin by asking the man in the street, and he will say that he is happy with Mr Chidambaram's Budget. And so the finance minister has dared politicians to criticize the farm loan waiver, and he might as well dare others to criticize the income tax cuts, if they care to. In other words, he knows that he has touched a popular nerve in both city and country. The second big question to ask, therefore, is whether economics can hope to prevail over populism, or whether political considerations always trump good economics. Certainly the UPA government's fifth and final budget gives unequivocal answers: it is a political budget from start to finish. And so a government led by economists and economic reformers has ended up bowing to political considerations and implementing over five years programmes that they may not believe in, but which they have to introduce and then find reasons to support. When a government led by such notables writes off Rs 60,000 crore of bank money, or 3 per cent of all bank loans, it is as well to remember the harsh words hurled at Devi Lal when he did the same; but since he was an unlettered kulak, he could be safely abused. The truth is that while farmers have been in distress, writing off loans makes every farmer who repaid his loan feel like a fool. What does that do to credit discipline? Also, the write-off does not end rural indebtedness because farmers owe more money to moneylenders. And if they got into financial trouble because farming does not pay enough, then the debt write-off is only a palliative and does not solve the underlying problem. So farmers who borrow again (if the banks are willing to lend) will also get into trouble again. But these are the questions that economists ask. There is also a question that lawyers might ask: how does the government tell the client of a private bank not to repay a loan, unless the government makes it up to the bank? And surely, the government is not about to start paying up to ICICI and HDFC and all the others, is it? The triumph of politics shows also in the national rural employment guarantee programme, which has been extended to all 596 rural districts, even though Rahul Gandhi who first demanded this realises now that the programme is not being implemented well. Another indicator of the soft state is the increase in the income tax floor from Rs 1.1 lakh to Rs 1.5 lakh (it is still higher for women and senior citizens). But even in the United States of America, people start paying tax at a lower income level of $3,400 (Rs 1.36 lakh), while in China the tax floor is $1,400 (Rs 56,000). India is poorer than both those countries, so why do people with higher income in a poorer country get away without paying income tax? The answer is that the government wants the urban, middle-class vote. The fifth indicator of politics trumping economics is the government's refusal to raise petrol, diesel and cooking gas prices to reflect their real cost. So the oil marketing companies have lost over Rs 70,000 crore on this account in the past one year. The way the government does its accounting, some of these figures do not show up in the Budget, even though the government will finally have to pick up the bill. If you add up the oil subsidy, the fertilizer subsidy, the extent of the loan write-offs that have to be made good and the money that has to be provided for the Pay Commission award, the total is huge. That brings up another big question: should the Fiscal Responsibility and Budget Management (FRBM) Act be scrapped? For this law seems to be having the perverse effect of making the government hide more and more of its expenditure and not show it in the Budget. The finance minister can then claim that he is meeting FRBM targets, when in truth he is not. Scrapping the law might encourage more honest budgeting. The last big question is whether governments can be trusted to be responsible with money. Note that taxpayers have paid up an average of 22 per cent more tax each year through the five Budgets of the UPA government
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Concern over rising prices: Modernise agriculture (Editorial)
The economic growth rate is likely to be 8.7 per cent in the review year 2007-08 as per the Economic Survey report presented in the Parliament. Finance Minister, P Chidambaram expressed concern over continuous rise in inflation. The expected growth rate of 8.7 per cent is as per the trend of the economy, it is informed. The Survey recommends reforms for strengthening of the rupee and to check fall in industrial demand to achieve growth rate of 10 per cent. Finance Minister said that central government and Planning Commission both would have to come forward for the reforms in policies and institutional reforms so that in the coming decades foundation for higher economic growth could be laid. Concern was expressed on economic slowdown in America, effect of strong position of rupee, slow industrial production due to decreasing demand of consumer items and lack of basic facilities of commodity and social sector. There is need to meet challenges both at the central and the state-level. These policies of central government should be managed well and the inflation should be checked with a view to strong economic system. The states should also reform their system in government and semi-government services. Real rate of interest should be according to inflation and in this connection loan and share market should be made liberal. We are behind in agriculture sector. Efforts are on for reforms in this direction. The survey calls for removal of hurdles coming in the path of modernisation and advancement of agriculture. According to the review, investments and savings and debt and loans are decided through real rate of interest. With a view to control inflation, agriculture needs to be modernised. The survey says the government is committed to make the economy strong, to increase pace of development and economic growth rate. Efforts on checking inflation are being made and proper measures would be adopted in this connection.
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Vidarbha may not gain from loan waiver
RS 60,000-CRORE BONANZA: The waiver won't help indebted farmers in Chhattisgarh either as most of them hold four and five hectares. The mammoth farm loan waiver of Rs 60,000 crore is unlikely to benefit cotton farmers in Vidarbha and elsewhere as it does not address the fact that dry-land farming attracts far lower loans per acre as irrigated farming. An acre of unirrigated land is entitled to loans of up to Rs 4,000. The same land which is irrigated attracts loans of up to Rs 50,000. In other words, the waiver of loans taken for farmers with two hectares (or 5 acres) would not add up to much for a cotton grower who does dry-land farming, since they have to look at other informal means to meet their borrowing needs In contrast, the per acre loans available for growers of sugarcane, grapes and horticulture crops will benefit hugely. This difference had been pointed out by the Congress party president from Vidarbha Prabha Tai Rao when she had appealed for a waiver of up to Rs 30,000 for farm loans to Finance Minister P Chidambaram recently. "While grape and sugarcane growers will get lakhs of rupees waived in one stroke, the cotton and dry-land farmers will barely get Rs 30,000 waived,' Vijay Jaywanthia, a farmer-turned-activist and a leading voice from the farm distress zone of Vidarbha. The waiver won't help indebted farmers in Chhattisgarh which has been reporting farmer suicides because most of them hold four and five hectares (10 to 12.5 acres). Jaywanthia said the only way this waiver can work in favour of farmers is to waive up to a certain amount, say Rs 50,000 per farmer, or have different waiver limits for dry land and irrigated land farmers. The farmers of Vidarbha are even demanding that the finance minister should come out with a white paper on the money that will go to different tehsils in each district under the waiver. This will expose the anomaly that the waiver intentionally or unintentionally is going to benefit the sugarcane belt besides those growing horticultural crops, Jaywanthia added.
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Sowing for a better harvest
SEEDS The Budget has announced a 150 per cent weighted average rebate on seed research and development. The measures # The finance minister has announced a 150 per cent weighted average rebate on research and development (R&D) of seeds. The context # Seeds are a key input and determines crop productivity, and improved seed quality alone can contribute about 25 per cent to the yield. Seed characteristics such as germination, high seedling vigour, and genetic purity are as important as other inputs. Thus, while fertilisers and water are important, the crucial input for increasing productivity are superior quality seeds. The impact # R K Sinha, executive director, All India Crop Biotech Association (AICBA) , the association of Indian agriculture biotech companies, said, "This is a welcome move.' Unfortunately, the FM has not granted infrastructure status to the seed industry which would have encouraged investments in the modernisation of seed processing plants, seed treatment and development facilities, godowns for storage, as well as transport and distribution. This, along with the creation of a dedicated Seed and Technology Development Fund, could have given clear signals to global and domestic industry to invest in agriculture. The industry hopes that during the year the government will "grant infrastructure status to the seed industry' and set up a "dedicated Seed Technology and Development Fund' for the long-term benefit of the farmer, industry, and economy.
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The writing on the wall
PAPER The industry may not pass on the excise duty cuts on writing, printing and packing paper to consumers. The measures # The excise duty on writing, printing and packing paper has been reduced from 12 to 8 per cent. Further, full exemption from excise has been provided for paper and paper products (for up to 3,500 tonnes) produced from non-conventional raw materials. The context # The paper consumption has been growing at 8-9 per cent in tune with the gross domestic product (GDP) growth. The 20 per cent increase in allocation towards education would further fuel the demand. However, paper prices have been rising continuously owing to a cost push from the rising prices of pulp and other raw materials. The impact # While welcoming the move to reduce excise duty, the paper industry remained non-committal on any price cut. "There has been an overall cost push in the raw materials such as pulp, coal, etc. The excise cut will help us absorb some of the cost push. However, a call on passing on the benefit of this cut will be taken only next week,' said R R Vederah, managing director, Bilt, the country's largest paper producer. Shares of paper companies, however, had a depressing day at the Bombay Stock Exchange. The share price of Bilt closed at Rs 136.90, down 1.55 per cent over the previous close. J K Paper's share closed at Rs 39.90, down 1.24 per cent over the previous day. "The 20 per cent increase in allocation towards education will fuel demand and induce further investments. I do not expect an immediate impact of the excise reduction on consumers and paper prices will depend on the overall demand-supply scenario,' said Pradeep Dobhale, president, Indian Paper Manufacturers' Association and chief executive of ITC's paper division.
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No relief for diabetes patients'
2.5 crore people likely to be affected by heart ailments due to diabetes Nearly 40,000 people lose their limbs every year due to the disease NEW DELHI: "Just the way the interests of 4 crore poor and marginal farmers have been protected by the Union Budget, Finance Minister P. Chidambaram should also have provided some relief to the 4 crore diabetes patients in the country who face the prospect of various serious ailments,' said Delhi Diabetes Research Centre president A. K. Jhingan in his reaction to the Union Budget on Friday. With diabetes likely to lead to heart ailments in about 2.5 crore of these people, renal or kidney failure in about 2 crore of them, loss of vision in about 1.2 crore, and with 40,000 people losing their limbs every year in the country due to gangrene caused by diabetes, Dr. Jhingan said there was a definite need for a fresh look at diabetes awareness, prevention and control. While the Union Government itself had admitted that diabetes had become a cause of national concern, it had done precious little to bring down the prices of drugs, testing equipment and test strips widely used by diabetes patients in the treatment and diagnosis of the disease, he added. Due importance "Just the way funds are allocated year after year for AIDS awareness and control, due importance should also be given for checking the spread of diabetes. But the Budget 2008-09 has remained silent on it,' Dr. Jhingan lamented. Pointing out that the reduction in excise duty allowed through the Union Budget some years ago had still not percolated to the consumers, Dr. Jhingan said a single diabetes test strip still costs over Rs.30 and insulin remains one of the most expensive available medicinal aids. As for the glucometer, he said, the prices still run into over a thousand rupees. "It is an irony that while the Centre provides glucometers free to those who have already lost their legs due to gangrene on account of diabetes, it has not tried to cut the prices so that such situations can be avoided,' he added.