Chandigarh Group of Colleges Technical Campus

Development Strategies Dr. Komal Bhardwaj

in India: Agricultural – Assistant professor
[email protected]
Pricing, Marketing and MBA 1st sem
Financing of Primary Sector
 Course Outcome

CO6: Illustrate the various

Development Strategies of India with
reference to Unemployment,
Agriculture, infrastructure and social
structure of economy.
 Course Objectives
• Students come to know about the various
Development Strategies of India with reference to
Unemployment, Agriculture, infrastructure and
social structure of economy.
 Contents
• Introduction
• Major Dimensions of Indian Agriculture
• Agricultural Pricing
• Agricultural Marketing
• Agmarknet Portal
• Agricultural Financing
 Introduction
•Agriculture continues to play a major role in Indian Economy.
•On the eve of India's independence in 1947, Indian agriculture
was characterized by feudal land relations and primitive
technology, and the resultant low productivity per hectare.
•As a consequence, rural India presented a picture of mass
poverty and widespread unemployment or under-employment.
•Therefore, the first task of the government in the immediate
post-independence period was to initiate a growth process in
the modernization of agriculture, both in terms of technological
and institutional changes.
•Green revolution transformed India from a food deficient stage
to a surplus food market.
 Cont….
•Agriculture sector described as the backbone of Indian economy
and also plays a significant role in the growth of socio-economic
sector in India. 60% (2015)of the population is still directly or
indirectly dependent on agriculture.
•Provides food to more than 1 billion people
•About 43% of India’s geographical area is used for agricultural
activity.
•Produces 51 major crops
•Contributes to 1/6th of the Export Earnings
•India is among the 15 leading exporters of agricultural products in
the world, as per WTO's Trade Statistics, share of India's
agricultural exports and imports in the world agriculture trade in
2017 was 2.27% and 1.90%, respectively.
 Major Dimensions of Indian Agriculture
•Overall growth of agriculture has moved correspondent to
the crop sector
•Livestock sector is growing at an appreciable and sustainable
rate and is ahead among all the subsectors.
•The smallholders dominate the Indian agriculture. The
situation is found to be sharper in state of Kerala, Bihar, West
Bengal.
•Poverty decline was experienced in all states where output
growth was high.
•Various Technology and cultivation practices are followed
across states.
 Cont……
•Irrigation management can bring substantial growth in
output through increase in productivity and saving of
resources.
•High degree of volatility have shown in many agricultural
commodities.
•Role of Agricultural trade in enhancing gains to farmers
Trade among nations remained an important activity.
•Rice and Wheat still occupy more than 1/3rd share in the
cropping pattern.
•Technology adoption helps in reducing yield gap at farm
level.
 Cont……
•Micro irrigation has generated benefits to the farmers in terms
of enhancement of productivity and water use efficiency.
•Investment in agricultural research has resulted in good
returns and thus policies for supporting and further
strengthening of research and extension system of the nation
should be continued.
•The share of crop sector in the total value production (VOP)
from agriculture and allied activities at 61.31 percent is the
highest.
•Fragmented and scattered holdings do not allow efficient
utilization of farm resources and technology adoption by the
farmers.
 Agricultural Pricing
• India’s agricultural price policy includes two main types of
administered prices:
•Support Price
•Procurement Price
 Cont….
•It is generally announced before the sowing/planting
time in respect of select crops raised in Kharif and
Rabi season.
•The price is notified in the form of MSP.
•It is recommended by the Commission on Agricultural
Costs and Prices and Govt. after due consideration.
•The MSP is based on cost of production with a certain
margin of profit added to it and serve as a price signal
to the market.
•It ensures the farmer if there is a fall below the MSP
then the govt. shall enter the market to procure from
the farmers.
 Cont….

• Before 1971 govt. used to notify two separate

prices, namely support price and procurement
price.
• Support price serve as a price signal to the farmers.
• Procurement price was one at which govt. itself
undertook procurement.
• Support price effect the farmer’s decision regarding
land allocation to crops.
 Significant Observations:
• Poor market Linkages and Infrastructure constraints
• High variations in price of almost all the commodities
and this variation is not only among the states but also
among the agencies in both the season.
• The price offered by local private agency is
comparatively higher than the govt./ cooperative price.
In some states the difference between both the prices is
quite large.
• Current price policy need to be restructured. Over the
last four and a half decades the price policy
implementation has boosted mainly wheat and rice
crops among food grains and sugarcane and cotton
among other crops.
Agricultural Marketing
Agricultural marketing generally means the
marketing of agricultural products to the first
handler. In macro (social)perspective, is the
performance of all business activities involved in the
forward flow of food and fiber from farm producers
to consumers. It includes all the activities associated
with agricultural production and with food, feed, and
fiber assembly, processing, and distribution to final
consumers, including analyses of consumer’s needs,
motivations, and purchasing and consumption
behavior.
 Structure of Agriculture marketing
1.Agricultural Co-operative Marketing Societies:
Under this the whole responsibility of marketing is
taken up by the farmers themselves, organized on co-
operative basis.
• Membership is open to individual farmer who
produces the crops for which the society is formed.
• Some times institutional members can also join the
co-operative societies.
• Eg: Banana in Jalgaon District
• Vegetables Co-operatives in Thane District
• Milk Co-operatives in Maharashtra and Gujarat
 Advantages of Co-operatives Societies
• Arrangement of sale for members
• Arrangement for storage facilities
• Protecting members from all types of malpractices
• Teaches Business methods to farmers
• Arrangement for stabilizing prices over a long
period by adjusting the supply with the demand
• Undertaking export trade
• Arrangement of loans for the farmers
 Cont….
2. Regulated Markets: It is set on under the law either
for a specific commodity or a group of
commodities.
• These markets are administered by a market
committee which consists of representative of the
state govt., the legal bodies, the traders and the
farmers themselves.
• The committee is appointed by the govt. for a fixed
period for management of market.
• It is one of the important source of generating
income for the market boards and this income is
used for creating rural infrastructure.
 Cont….
3. Public Trading: the govt. notifies the prices and
purchase specified commodities at this price
directly from producers.
• Govt. then distributes these commodities to the
customers.
• The distribution has been done through the fair
price shops at notified issue prices.
 Issues in Agricultural Marketing
• Too many intermediaries
• Unregulated markets
• Lack of holding power
• Ignorance
• Other issues
• Storage facilities
• Poor infrastructure
 Remedies
• Establishing modern warehouses and cold storage
• Marketing Survey
• Improve infrastructure and connectivity facilities
 AGMAKNET PORTAL
• Market information is needed by farmers in planning
production and marketing of their produce and equally
needed by other market participants in arriving at optimal
marketing decisions.
• To fully utilize the new emerging marketing opportunities
for the benefit of farming community, establishment of an
ICT based "Agricultural Marketing Information Network” in
the country has become inevitable.
• Ministry of Agriculture & Farmers Welfare had launched the
ICT based Central Sector Scheme of Agricultural Marketing
Information Network (AGMARKNET), in March, 2000, to link
important agricultural produce markets spread all over the
country and the State Agriculture Marketing Boards and
Directorates.
 Cont….
• The project is being executed with the technical support of National
Informatics Centre (NIC). Computers were also provided to State
Agricultural Marketing Boards/ Directorates, etc.
• An application software package 'AGMARK', has been developed to
facilitate organization and transmission of market data from the markets.
• In order to strengthen interface with farmers and other beneficiaries, a
revamped AGMARKNET portal (http://agmarknet.gov.in) has been
developed.
• More than 2774 markets are regularly reporting price and arrivals
related data which is being disseminated through the portal.
• The AGMARKNET portal also serves as a single window for accessing
websites of various other organizations concerned with agricultural
marketing.
• It provides weekly arrivals and price trend analysis for important markets
in respect of major agricultural commodities transacted.
 Agricultural Financing
• Role of agricultural credit is important in meeting
capital needs of crop cultivation, animal rearing and
other sub-sectors.
• The sector needs easy access to timely and
adequate volumes of institutional credit.
• In addition to agronomic and commercial crops
new growth engines namely, animal husbandry and
fishery stores need to be offered.
 Changing
Structure of
India’s foreign
trade
 Introduction
• Foreign trade in India comprises all the export and
import to and from India.
• The ministry of India at the level of Central Govt. has
responsibility to manage such operations.
• During Colonialism system export consisted primarily of
raw material and plantation crops, while import
composed of finished goods, light consumer
merchandise and other manufactures.
• Total exports from India have increased 8.73 percent
year on year in 2018-2019 (up to Feb 2019) to US$
483.92 billion, while total imports have increased by
9.42 percent year on year to US$ 577.31 billion, acc to
data from ministry of commerce and Industry.
 Table Depicting Exports, Imports and
trade balance
Export Import
Rate of change (Billions of US Rate of change Balance(Billion
Year ( Billions of in Export in Import s of US $) % of GDP
US $) $)
2014-15
468.3460376 1.7776 529.2397 0.8712 -60.89364179 -2.9863
2015-16
416.7878326 -5.6471 465.0975 -5.85 -48.30964203 -2.2965
2016-17
439.6427878 4.9843 480.1693 4.3819 -40.52649703 -1.766
2017-18
498.2585609 4.5553 582.0177 17.4146 -83.75916271 -3.1574
2018-19
538.6352015 12.3287 639.0133 8.5976 -100.3780625 -3.6997
2019-20
536.5582 -1.9149 614.0317 -5.4718 -77.47358206 -2.6946

Source: https://www.macrotrends.net/countries/IND/india/trade-balance-deficit
 Composition of foreign Trade

Source: https://www.rbi.org.in/scripts/PublicationsView.aspx?id=19855
 Composition of foreign Trade

• Source: https://www.rbi.org.in/scripts/PublicationsView.aspx?id=19855
Direction of India’s Foreign Trade
Direction of India’s Foreign Trade
 Steps to be taken for promoting
International Trade
• Competitiveness
• Diversification of foreign trade
• Careful trade Relations with Developed Nations
• Need of improving Trade Relations with the
developing nations
• Dependence on Import of crude oil should be
reduced
 Recent steps taken by Govt. to promote
International Trade
• In November 2018, India and Iran had signed a bilateral
agreement to settle oil trades in Indian Currency through
public sector bank UCO Bank.
• In March 2019, the GOI proposed to Africa to enter a free
trade agreement (FTA) or preferential trade agreement (PTA)
• In June 2018 an MOU was signed between the GOI and
China to Export non basmati rice to China.
• In August 2018 US upgraded India’s status as a trading
partner on par with its North Atlantic Treaty Organization
(Nato) allies.
• Bilateral trade between India and Ghana is rising
exponentially.
 Cont….
• India has revised its proposal on Trade facilitation for
services (TFS) at the World Trade Organization (WTO)
• The Union Cabinet, GOI has approved the proposed
Memorandum of Understanding between Export-Import
Bank of India and KEXIM.
• The Goods and Services Network (GSTN) has signed a
MOU with director General of Foreign Trade, to share
realized foreign exchange and import-export code Data,
process export transactions of taxpayers under goods
and services tax more efficiently, increase transparency
and reduce human interface.
• GOI is planning to set up trade promotion bodies in 15
countries to boost exports from SME in India.
 Directorate General of Foreign Trade
• DGFT organization is an attached office of ministry
of Commerce and Industry and is headed by DGFT.
• Its headquarter is in Delhi and 38 regional offices
and an extension counter at Indore.
• From 1991 this organization has been essentially
involved in the regulation and promotion of foreign
trade through regulation.
• Its main objective is to increase export by playing a
facilitator role by considering the policies
formulated by the Govt. and DGFT.
Infrastructure
Development:
Energy and
Transport
 Introduction
• Infrastructure Adequate quantity, quality and reliability of
infrastructure are the key to the growth of any economy.
Infrastructure facilities often referred to as economic and social
overheads – consists of:
• Irrigation: including flood control and command area
development
• Energy: coal, electricity, oil and non-conventional sources
• Transport: railways, roads, shipping and civil aviation Ք
Communications:
• Posts and telegraphs, telephones, telecommunications, etc
• Banking, finance, and insurance
• Science and technology
• Social overheads: health and hygiene and education.
 Energy
• Energy is the most important determinant of a
country’s economic growth.
• In fact, per capita consumption of energy is taken
as an indicator of a country’s prosperity.
• Energy is created through several sources.
• The sources are conventional and non-
conventional.
• The first shall include commercial and non-
commercial sources of energy.
 Cont….
• Commercial energy is so-called as it commands a price and the
user are expected to pay it for its use.
• Non-commercial energy commands no price and the user can
take it as a free goods gifted by nature.
• Non – conventional energy is a recent discovery and its use is
confined to limited pockets in our country.
• Confining to the commercial energy, it may be stated that coal is
the main source, accounting for 67 % of the total energy
consumed in the country.
• The government has initiated several steps to improve the supply
of coal. Private sector participation is allowed in coal mining.
• Imports of cooking coal under the open general license (OGL) are
being allowed and the import tariff has been slashed from 85%
to 35 %.
 Various forms of Energy
• Solar Energy
• Wind Energy
• Geothermal Energy
• Hydrogen Energy
• Tidal Energy
• Wave Energy
• Hydro electrical Energy
• Biomass Energy
• Nuclear Power
 Transport
• Transport sector includes railways, roads, shipping
and civil aviation.
• The Indian railways have a long history which
consist of an extensive network spread over 62,462
kms- comprising broad gauge (36,824 kms), meter
gauge (20,653kms) and narrow gauge (3,985kms).
• Electrified networks with 11,793 kms account for
18.8 % Of the total route kilometer age.
• Railways can claim for having connected most of
the country with the conversion of gauges and
creating more routes.
 Communications
• The communication system comprises posts and
telegraphs, telecommunication systems,
broadcasting, television and information services.
• By providing necessary information about the
markets and also supplying necessary motivation,
the communication system helps to bring buyers
and sellers together effectively and helps to
accelerate the growth of the economy.
• Accordingly, the modern communication system
has become an integral part of the development
process.
 Infrastructure Financing
• It is dominated by direct equity investments and
bank loans.
• NBFC too play a part in infrastructure financing.
• There are NBFCs that specialize in financing
Infrastructure and certain sector specific NBFCs in
the govt. sector.
• The outstanding bank credit to infrastructure
sector, ₹ 95 billion in 2001 march increased to ₹
9853 billion in March 2016, a compound annual
growth rate of 39.31% over last 15 Years.
 Unique Features of Infrastructure Assets
• Complex
• Long term and Subject to Risk
• Assets Liability Mismatch
 Measures to help flow of funds to
infrastructure
• Limited cost Overrun Financing
• Issuance of Guarantees
• Finance for funding Promoters Equity
• Flexible Restructuring of loans
• Infrastructure Bonds
• Credit Enhancement
• Proper Compensation
• Lower Provisioning
• Additional Toolkits
 Reason for higher level of stressed Assets in
Infrastructure Sector
• No Proper Structuring
• Repayment Schedule
• Other Factors
 Remedies to develop infrastructure in
India
• Effective Project Appraisal
• Proper Mix
• Corporat Bonds
• Pricing of the Loans
• Credit Enhancement
• Option of Green Bonds
• Strict benchmarks for evaluation
• Selective about the Infrastructure Opportunities
Social Infrastructure-
Education, Health
and Gender related
issues,
 Introduction
• Social Infrastructure: Social infrastructure is the
combination of basic facilities which are necessary
for human development. Social infrastructure
includes Education , Health, sanitation & Water
supply.
 Education
• Education in every sense is one of the fundamental
factors of development. No country can achieve
sustainable economic development without
substantial investment in human capital.
• Education raises people’s productivity and creativity,
promotes entrepreneurship, technological advances
and generates individual income per capita.
• Knowledge accumulation influences a country’s
trade performance and competitiveness.
• India, with its huge population, India has world's
third largest higher secondary education system with
a number of institutions.
 Cont….
• The education sector in India is standing at $600
billion.
• India's literacy rate -52.2% (1991) to 74.37% %
( 2018 )
• The number of institutes offering higher education
in India is 44,668. Of that, 33,660 offer various
degrees and the rest offers diplomas and has more
than 1.4 million schools.
Adult literacy rate is the percentage of people ages 15 and above
 Health
• Health is one of the major determinants of labour
productivity and efficiency.
• Multinational health care companies not only focus
on providing medicines but also for expanding
economic opportunities through job creation,
training, shaping public policy etc,.
• The health care sector includes drug
manufacturers, pharmaceuticals & biotechnology,
hospitals , health technology & information
providers.
Current expenditures on health per capita in current US dollars.
 Gender Related Issues

• Gender inequality is described as “The differences

in the status, power and prestige women and men
have in groups, collectivities and societies”.
• Gender equality is the measurable equal
representation of women and men. Gender equality
does not imply that women and men are the same,
but that they have equal value and should be
accorded equal treatment.
• The United Nations regards gender equality as a
human right.
 History of Gender Inequality
• Throughout history, women have battled with
discrimination.
• This was a burden both inside as well as outside the
home.
• Women did not have the legal rights that they do today.
• In the past, women were commonly believed to have
smaller brains than men.
• Women were only viewed as useful in the household
and to take part in chores such as cooking and cleaning.
• Women’s perspective was not of any value and they
were not allowed to vote
 Barriers of Inequality

• Professional Obstacles
• Violence
• Feticide and Infanticide
• Feminization of Poverty
• Access to Healthcare
• Political Participation
• Education Attainment
 Gender Professionalism & Inequity
• For decades women have fought to protect their
right to be equals to men within the workplace.
Even with all the landmarks these women have
made, they still only earn 77 cents to every dollar
to their male coworkers. This includes in the same
position with the same experience.
 Violence
• Statistics show that one in every three females are
likely "to be beaten, coerced into sex or otherwise
abused in her lifetime“.
• This includes in both the developing as well as the
developed world.
• Violence against women in the form of rape,
spousal abuse, child abuse or spousal killing is
routine behavior.
 Female Feticide & Infanticide
• Feticide and infanticide are the act of aborting a fetus
or an infant.
• This is increasingly more popular in countries such as
India and China.
• The reason behind this has to do with the fact that
women are less valuable than men in these
countries.
• It is apparent that in some countries the gender ratio
is skewed.
• In 2018 the gender ratio in India was 950 females to
1000 males. This entirely results in gender inequality.
 Feminization of Poverty
• More than 1.5 billion people in the world live on less
than one dollar a day, and the majority of those people
are women.
• The United Nations often states that women do two-
thirds of the world's work, receive 10 percent of the
world's income and own 1 percent of the means of
production.
• Also, many women can not apply for loans which often
leads to poverty and them not being able to support
their families.
• Many female entrepreneurs have been foiled and left to
dwell in poverty because of restricted access to basic
legal rights.
 Access to Healthcare
• Many women in developing countries don’t receive
the necessary healthcare.
• Many female entrepreneurs have been foiled and
left to dwell in poverty because of restricted access
to basic legal rights.
• Statistics show that this is more than 500,000
deaths every year, many of which could have been
prevented if the woman had been allowed to
receive the proper healthcare.
• This however is less common in developed
countries such as Canada, and the United States.
 Political Participation
• Despite women taking part of 50% of the world’s
population, research has proved that they only take up
approximately 15.6% of political seats.
• It is debatable that women would make great political
leaders in that they will focus on the priorities such as
family and community resources, health, education
and the eradication of poverty.
• However, although women are less recognized then
men in their political status, several countries are
involved in a quota system.
• In reference to the illustration to the left; these are the
percentages of women that are within the parliament.
 Women & Education
• Once again, although this is less prevalent in the developed
countries, women make up the majority of children that do
not have access to education.
• Statistically, women make up two-thirds of the world’s
populate that is illiterate.
• Many women in other countries are kept out of school to
assume the position of taking part in the household chores.
• Also, sometimes the issue is that there may be only enough
money to send one child of the house to school, and in most
instances, this would be the boys responsibility.
• This is unfortunate due to the fact that girls who complete
school are less likely to marry young, more likely to have
smaller families and exhibit better health outcomes.
 Feminism
• Feminism is ;
• the theory of the political, economic, and social
equality of the sexes
• organized activity on behalf of women's rights and
interests
 Summary
• Gender inequality tends to slow down economic
growth and make the rise from poverty more
difficult.
• Women have always had lower status than men,
but the extent of the gap between the sexes varies
across cultures and time.
• Gender equality accelerates overall economic
growth, strengthens democratic governance and
reduces poverty and insecurity. 
• Equality between men and women is a worthy goal
that is central to progress in human development.
Social Inclusion
And
Social Exclusion
 Introduction

• It is a process of improving the terms on which

individuals and groups take part in society- improving
the ability, opportunity and dignity of those
disadvantaged on the basis of their identity.
• Acc to World Bank: The process of improving the terms
for individuals and groups to take part in society” or
more precisely.
• Exclusion occurs because certain groups are
systematically disadvantaged and/ or discriminated
against on the basis of their identity: ethnicity, race,
religion, sexual orientation, caste, descent, gender,
age, disability, HIV status, migrant status or where they
live. 
 Cont….
• Social inclusion is multidimensional: it encompasses
social, political, cultural and economic dimensions,
and operates at various social levels.
• GOI is effectively exploring multi facets of
empowerment for the socially, politically and
economically deprived sections of the society.
• Social Inclusion is a struggle for equal opportunity
and against marginalization.
 Dimensions of Social Inclusion
• Opportunity: should be created to earn a living and
increase their income over time
• Capability: is the economy providing the means for
the people to create or enhance their capabilities in
order to exploit available opportunities
• Access: is the economy providing the means to
bring opportunities and capabilities together
• Security :is the economy providing the people to
protect themselves against a temporary of
permanent loss
 Social Exclusion
• Social Exclusion refers discrimination ,deprivation ,
isolation, segregation, separation ostracism and
excommunication of Individual and groups in the
society.
• In simple terms “Social exclusion has been defined as
‘the process through which individuals or groups are
wholly or partially excluded from full participation in
the society within which they.
• Acc to Barnes: ‘Social exclusion refers to the
multidimensional and dynamic process of being shut
out, fully or partially, from the economic, social and
cultural systems that determine the social integration
of a person in Society.’
 Cont….
• Social exclusion is a complex and multi-dimensional
process. It involves the lack or denial of resources,
rights, goods and services, and the inability to
participate in the normal relationships and
activities, available to the majority of people in a
society, whether in economic, social, cultural or
political arenas. It affects both the quality of life of
individuals and the equity and cohesion of society
as a whole.
 Factors with being excluded from society
• Unemployment
• Financial hardship
• Old age
• Ill health
• Substance abuse or dependency
• Discrimination on grounds of sex, race, ethnic origin,
religion, creed and sexuality
• Poor educational
• Relationship and family breakdown
• Poor housing
• Social Background
 Ways to promote Social Inclusion

• Providing Advice and Assistance to people who are

excluded from society
• Research
• Educational and awareness campaigns
• Regeneration activities
• local network Group
• Increasing or co-ordinating opportunities
• Working with people
• Capacity Building
• Elderly persons and single parents
 Recommendations
• Create legal, regulatory and policy frameworks that promote social inclusion
• Ensure that socially excluded groups still benefit from public spending as
much
• Improve economic opportunities for excluded groups
• Promote their political participation and empower them to utilize their
voices
• Increase accountability of individuals, governments and groups to protect
citizen’s rights
• Tackle prejudice
• Inclusive growth: sustainable growth
• Distribution of opportunities through investment in education, health and
infrastructure
• Public private partnership in development
• Dream of utopian concept, i.E., Ideal community.
• Empowerment through education art.21a
 Next Topic

• Demographic features and Indicators of Economic

Growth and development
 Sources
• Book:
1. S.K. Bansal, S.K. Bansal & Rama Bansal, Business
Environment and Indian Economy, Kalyani
Publication, New Delhi.
• WEB RESOURCES:
1. https://www.freebookcentre.net/business-books-
download/Business-Environment-Study-Material.
html
2. https://iimm.org/wp-content/uploads/2019/04/II
MM_BE_Book.pdf
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