Archive for May 30th, 2007

Agriculture sector is a problem area

May 30, 2007

I had posted about the slowdown in Agriculture sector here and here.

This morning newspapers are reporting about the speech given by Prime Minister on Indian Agriculture sector at National Development Council (opening & closing remarks). The summary is to allow states to draw up their own plans for agriculture and The Centre would commit Rs 25,000 crores over the next 4 years for various initiatives taken to provide impetus to this sector.

Various newspaper summaries: Economic Times, Business Standard, Indian Express, Financial Express. An interesting article from Ashok Gulati on how to reform Indian Agriculture sector.

I also came across that World Development Report for 2008 (An annual publication from World Bank) focuses on Agriculture for Development. The website says:

A reconsideration of agriculture’s role in development has been long overdue. Developing country agriculture is caught up in the far-reaching changes brought by globalization, the advent of highly sophisticated and integrated supply chains, innovation in information technology and biosciences, and broad institutional changes—especially in the role of the state and in modes of governance and organization.

One can take a cue on why government is so active in agriculture sector from this statement:

Although agriculture is a private sector activity, it is uniquely dependent on good governance, wise public investments, and carefully focused public policy. An important question examined in this report is how to determine when public policy should concentrate on capturing the new growth opportunities available to agriculture and when it should concentrate on capturing opportunities in other sectors of the economy to help people exit agriculture.

Looking forward to the report.

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Assorted Links

May 30, 2007


1. Ajay Shah points to two superb articles in Wall Street Journal. The first one is by Eswar Prasad on capital flows and its impact on India; the topic which is of recent interest to me and I have blogged and summarised here. Eswar Prasad is also one of the co-authors for the paper on financial globalization I critiqued here

Prasad says that India needs capital account liberalisation for reasons other than the ones attributed in text-books. Then he picks a cue from the research paper talking about collateral benefits that financial globalization could bring to Indian economy.

Dani Rodrik criticises the article by Eswar Prasad saying one thing most of these studies is that capital inflows leads to appreciation of the currency which leads to negative effects on the economic growth. So, either India lets its currency float or sterilize the inflows.

2. IPO fees in Europe catches up with US for the first time.

3. Indian Mutual Fund industry continues to confuse me. I am yet to figure out how UTI Mutual Fund is the most profitable Mutual Fund (I posted about it here). And now I see this– Franklin Templeton launches high-growth fund. And then the news says it talks about investing in companies like Infosys, Bharti etc which are high growth companies. Well, but then what is new? Does it mean other funds are not growth funds? What is the new thing it has to offer? This is one aspect of MF industry in India which needs some kind of self-regulation. The industry players continue to throw me-too funds and there is no check on the same.

4. Just came across this interesting advertisement in Economic Times. There is an education program  from the IIT-IIM stable called Post Graduate Program for Executives for Visionary Leadership in Manufacturing. What does it mean?


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