Showing posts with label Economic Reforms. Show all posts
Showing posts with label Economic Reforms. Show all posts

Saturday, January 10, 2015

New Year Bites 2015

For the New Year:



Year 2014 can be termed as year in waiting. People waited with bated breath for the policy paralysis to end and for the economy to start growing to its potential. Post elections, the wait did not however end. There have been announcements more than achievements and promises more than performance. 2015 would therefore be a demanding year for the rulers.

The crude shocks elsewhere brought some cheer to India in containing its current account deficit and inflation that touched unsustaining levels in March 2014. Stock markets reacted favourably with the indices taking the highest ever jump of 6000 since the last General Elections. They shocked the investors with a peak in the crash on the 7th January 2015 led by yet another decline in global oil prices and other commodity prices.

Wednesday, December 17, 2014

Rural Cooperatives


Rural Cooperative Credit Structure beg for urgent reforms

Cooperatives with their spread are the best means for reaching the goals of financial inclusion and Jan-Dhan.
Their form and content needs change. Meaningful recommendations of Vaidyanathan Committee have been implemented more in breach. The States that received the reform package have breached on the MOUs and misspent the grant released and NABARD also did not put its heart in the monitoring of the grant assistance.
GOI should recall the grant assistance from all these states or should give them an year's time to re-engineer the rural cooperative credit structure to the promised health. 

The vast potential of cooperatives can be fully utilised only through de-bonding them from the politicians and vested interests and by ushering in legal and governance reforms. 

Friday, December 2, 2011

FDI in Retail: Whose interests would it serve?

Twists in Indian Retail Trade:
In his inimitable style, Dr Debroy exposed the hollowness of the much touted latest reform agenda – the FDI in Retailin the edit piece of Economic Times on 2nd Dec 2011. The essence of it all is that the farmers, mostly the small, marginal, and the tenant farmers as also the Kirana retailers are bound to loose out. The loosing tenants are driven to suicides. The large farmers are out of farming mostly and settled in real estate or tourism or hospitality industry that is more remunerative but are not out of farms. They rented out to the smaller cousins. The APMC Act and its rules deserve all the blame. The Agriculture market Yards (AMY), most of which own high value assets and turn out good cess to the state governments invested too little in taking markets closer to agricultural production. They could have utilized the ICT to establish a well-endowed storage cum market yard. In the hinterland of the AMY, farmers could have been given a smart card as the first step. They could have set up the spot markets after constructing four-layered storage godowns: ground floor for seeds; second floor for fertilizers and other inputs for farming; third floor for outputs; and the last floor, cold storage connected through a conveyor belt system with all bins properly marked. The farmer who enters the market in such a system would have swiped the card at the entrance; unloaded his produce with laden weight of the produce recorded; sorted and graded the produce and at each of these points the weight and price duly recorded. If he were to arrive late during the day, he could just unload the produce and proceed to the dormitory on the first floor of the service building of AMY. The whole produce so delivered would get into the spot market when the farmer would receive 70-80 percent of the value of the produce so delivered after paying up the service charges on-line. This would eliminate the stranglehold of the kutcha adityars or the exploitative intermediaries. Such markets to be set up require INR 20-30crores and should not be difficult to be found. The farmer, irrespective of the size of his holding, would have gained. It is important in such situation to get rid of the CACP. The spot market can eventually be linked with the futures when real price discovery would have taken place to the advantage of the farmer. The food retail markets would have the prospect of sustainable gains and the consumer also would have had the distinct advantage of the direct purchase and sale. All said and done, the FDI Retail would have no more than ten percent of its space for the food products.