Posted by: SATYASRINIVAS | May 26, 2007

GD1

FOOD CRISIS

INDIA’S agriculture sector has for long been held to be a success story. That India is able to feed itself without having to wait for the next shipload of PL480 wheat, as was the case in the 1950s and the 1960s, is a remarkable achievement. The Malthusian nightmare that many predicted did not happen. The Green Revolution solved the problem of insufficient food production. But, now, a new crisis looms over us.
The food crisis (issues )
1. low productivity and purchasing power, 2. inadequate infrastructure, 3. a gross inequality of state-conferred benefits and a 4. perceptible withdrawal of the state from the agriculture sector. 5. over dependence on monsoon 6. too many people dependent on agriculture for a living
At least 260 million people are still below the official poverty line, which means that one out of every four Indians suffers from not having enough income to meet the daily food requirements. This inability to buy enough food will not be mitigated by just producing more.
How can it be handled?
1. produce enough jobs for these starving millions to put enough food on their plates each day. When that happens, production will once again become the problem. And that day is not very far off. facts…
The GNP growth rates of the last two decades — the 1980s and the 1990s — have been 5.7 per cent and 5.9 per cent respectively. This clearly suggests that at least a 6 per cent growth in GNP for the next two decades is on the cards.
“At this level India will require 374.7 million tonnes of cereals in 2020 with possible cereal deficit of 115 to 142 million tonnes.
Current food production trends, however, are a cause for concern. The growth of total food grains — with the advent of economic reforms — lumped to 1.66 per cent in the 1990s The main reason for this has been the sharp decline in government spending on agriculture and irrigation infrastructure. The combined share of agriculture and irrigation in total Plan outlays has come down from the high of 31.04 per cent in the Fourth Plan to just 10.63 per cent in the Tenth Plan.
The share of agriculture and allied activities in the country’s GDP has declined continuously since Independence. While agriculture accounted for more than half (56.89 per cent) of India’s GDP in 1950, in 2000-01, it only contributed a quarter (24.90 per cent).
The decline in agriculture’s share has meant a commensurate rise in the share of the industry Indian society still remains primarily agrarian for the majority of the population; an overwhelming 69 per cent still depends on agriculture for sustenance. Agriculture remains the major employer providing 59.84 per cent of the jobs.
In 2002, the employment in the entire organised sector with 27.96 million in it was a mere one-eighth of the agriculture sector. While the much-touted information technology (IT) sector is bringing in huge foreign earnings and so much cheer, its potential to overcome the current employment drought in the country seems extremely minimal. The entire IT sector employed only 0.7 million persons in 2002. According to Mr Kiran Karnik, President of the National Association of Software and Service Companies (Nasscom), even by 2008 the IT sector will generate only 2.1 million jobs (1.1 million in IT services and one million in BPO). This is small consolation for a country that adds around 8 million to its labour force each year.
Looking at the employment situation, from 1983 to 1993-94, the workforce increased by 71.69 million. Thus, on an average, 7.1 million jobs were created each year during the period. If this trend was maintained in the following period (1993-94 to 1999-2000), the workforce should have increased by 43 million.
However, it increased by only 22.55 million. Thus, 20.45 million jobs were lost or not created during the period, exacerbating the chronic unemployment problem even further. The major reason for this is also apparent. Employment in agriculture has remained dormant; even though employment growth in the industry and services sectors has been better; it has been enough to make up for the negative growth in agriculture sector jobs.
A transformation of the national economy would only occur when people move from agriculture to other sectors. This is only possible when huge investments are made to increase agricultural production and productivity, which will, in turn, create jobs in the construction and engineering sectors.
In the process, the per capita production in the farm sector will rise making it a commercially-viable business.
———————————————————————————————
Why We Shouldn’t Go To Mars ?

“Two centuries ago, Lewis and Clark left St. Louis to explore the new lands acquired in the Louisiana Purchase,” George W. Bush said, announcing his desire for a program to send men and women to Mars. “They made that journey in the spirit of discovery … America has ventured forth into space for the same reasons.”
Yet there are vital differences between Lewis and Clark’s expedition and a Mars mission. First, Lewis and Clark were headed to a place amenable to life; hundreds of thousands of people were already living there. Second, Lewis and Clark were certain to discover places and things of immediate value to the new nation. Third, the Lewis and Clark venture cost next to nothing by today’s standards. In 1989 NASA estimated that a people-to-Mars program would cost $400 billion, which inflates to $600 billion today; as much as building about 800 new Dams.
Mars as a destination for people makes absolutely no sense with current technology.
Where would the money come from?
Present systems for getting from Earth’s surface to low-Earth orbit are so fantastically expensive that merely launching the 1,000 tons or so of spacecraft and equipment a Mars mission would require could be accomplished only by cutting health-care benefits, education spending, reduction of the federal deficit or other important programs—or by raising taxes. Absent some remarkable discovery, astronauts, geologists and biologists once on Mars could do little more than analyze rocks and feel awestruck beholding the sky of another world. Yet rocks can be analyzed by automated probes without risk to human life, and at a tiny fraction of the cost of sending people.
major achievements of space exploration: pictures of the rings of Saturn and the outer planets, evidence of water on Mars and the moons of Jupiter, discovery of more than 100 planets outside our solar system and study of the soil of Mars. All these accomplishments came from automated probes or automated space telescopes.
Bush’s proposal, which calls for “reprogramming” some of NASA’s present budget into the Mars effort, might actually lead to a reduction in such unmanned science—the one aspect of space exploration that’s working really well.
Rather than spend hundreds of billions of dollars to hurl tons toward Mars using current technology, why not take a decade—or two decades, or however much time is required—researching new launch systems and advanced propulsion?
If Mars proponents want to raise $600 billion privately and stage their own expedition, more power to them; but taxpayers can not be expected to foot their bill. the case for vast expenditures to go to Mars using current technology is very weak.
The drive to explore is part of what makes us human, and exploration of the past has led to unexpected glories. Dreams must be tempered by realism, however.

Adv of space research….
At the more practical end, the moon offers unique opportunities for scientific research.
The moon would also be a terrific place to build astronomical observatories. With no atmosphere to interfere with precision optics, it offers both the clarity of outer space and a surface solid enough to support enormous structures. To look for Earthlike planets around distant stars and examine them for signs of life, for example, NASA is talking of launching a matched set of satellite telescopes whose combined light would make pictures far sharper than those of the Hubble Space Telescope. On the moon you could make the telescopes much bigger, spread them miles apart instead of yards and not have to worry about keeping them flying in perfect formation.
Another good reason to go is the one disdained by straight-to-Mars boosters: learning how to live off the land—manufacturing some of what we need from soil that contains oxygen, silicon, aluminum, iron, calcium, magnesium and titanium, plus a dusting of helium, hydrogen, nitrogen and carbon deposited by solar winds.
To some dreamers, the presence of silicon, especially, suggests a way to make a return to the moon pay—and maybe even save the environment back home. If you could set up automated lunar factories to extract the silicon and turn it into solar cells, says David Criswell, director of the Institute for Space Systems Operations at the University of Houston, the moon could become a solar power station, beaming clean energy via microwaves back to Earth. “If you want to provide sustainable energy for 10 billion people by 2050,” he says, “there is no other way.”
another energy-producing idea: extracting helium-3, an isotope rare on Earth but relatively abundant on the lunar surface, and shipping it back to fuel nuclear-fusion power plants.

Bush rhetoric!!!
Bush’s critics say he’s performing intergalactic hocus-pocus—getting credit for giant leaps but taking only tiny, insufficient steps. NASA projects that the full cost of the program would be close to $170 billion, but the President mentioned only $1 billion in new spending over the next five years. Bush is merely being prudent, say White House aides, who are focusing on the funding for the first stage of the plan. Rolling out a whole pot of new money is what doomed his father’s effort to do a similar thing in 1989, when the $400 billion price tag ($600 billion in today’s dollars) became a symbol of NASA bloat. Laying out only a few dollars now is also smart politics at a time of $500 billion deficits, when the President is facing conservative Republicans who are irritable over his big-spending ways and Democrats who are complaining that Bush’s pie-in-the-sky proposals crowd out important domestic priorities. And Bush will not even be footing the bill himself. The real costs will occur long after he heads back to Crawford (even after a second term), forcing other Presidents to find the money. “We do not know where this journey will end,” says a senior Republican staff member, parroting a line from the President’s speech last Wednesday announcing the plan, “because we won’t have the money to bring them [the astronauts] home.”
For one thing, turf battles are sure to erupt. NASA is being asked to hack $11 billion off its current budget to free money for the new mission. Members will want to protect existing projects in their states or districts, not to mention NASA research on climate and astronomy that they believe is worthy. “Human beings in space isn’t going to be the driver of our science policy,” says Sherwood Boehlert (R., N.Y.), chairman of the House Committee on Science. He applauds Bush’s plan but is already braced for a fight over potential cuts.
According to a TIME/CNN poll, 61% of Americans oppose spending billions for the project. They think the money would be better spent at home.
Though Bush’s proposal gives a booster-size lift to NASA, his devotion to the space agency is a recent conversion. He showed no great fascination with the space program while he was Governor of Texas. He never visited the Johnson Space Center even though it was just around the corner, and saw the idea of space exploration through the prism of education, his signature “big idea” back then.
The largest doubt about Bush’s program is whether it will survive past his presidency. The hardest choices about funding manned exploration will come at the very same time those crumbling entitlements require more money too. When John Kennedy first put the nation on the path to the moon in 1961, he had the cold war as his backdrop. Each step closer to the Apollo landing was also a victory over the Soviets, a struggle that animated Kennedy’s dream long after his presidency. The war on terrorism does not help Bush in the same way. Putting a man on Mars will not help find Osama bin Laden or his descendants. But future Presidents will fight that war too, and it just might be wise to accompany that battle with an optimistic mission to the heavens

——————————————————————————————–
PORT PRIVITISATION

“India has a lot of potential in this sector, but what is lacking is the right policy,” feels Mr Jimmy Sarbh, Director of P&O Ports, which operates the Nhava Sheva container terminal at JN Port, the Chennai container terminal and the Mundra terminal.
Excerpts:
Could you sum up the developments that you have seen in the port sector during the last 10 years? How have these benefited the port users, the shipping companies and the terminal operators?
We have done the first, third and fifth port privatisation projects in the country — the first, of course, being the jewel in P&O’s crown, the Nhava Sheva, the third being the Chennai terminal, where it used to take 21 days for a turnaround of a 1,000- TEU exchange and today it takes 21 hours, and the fifth being the Mundra.
So the privatisation has benefited port users in terms of cargo handling cost?
Chennai, where a vessel used to take 21 days — there was a $200-surcharge per box, which the importer and exporters were paying. Today, at Nhava Sheva, 4,000 TEU and 5,000 TEU ships are being turned around in 24 hours. It compares to the best in the world.
India has been witnessing significant capacity addition in the ports sector, as more capacity addition is being planned. Do you think there are enough cargoes?
Problems:
The road and rail connectivity is not proper. Today, Concor does not have wagons, but they keep camouflaging it by saying they have.
If India’s GDP has to grow at 8.4 per cent, there is no option but to allow the private sector to operate cargo trains. We need dedicated rail lines for freight only.
the ports have to be managed by professionals and not just IAS officers.
India definitely needs a hub port, as shipping lines mainly use such ports, which offer minimum time to connect their containers from mainline to feeders and vice-versa. The absence of a hub port means that every container leaving an Indian port is delayed twice — once on the feeder voyage from India to the hub port and the second time at the hub port while it waits for the mainline ship to call. Results in extra cost
Tariff Authority for Major Ports (TAMP) : should be scrapped. Assuming that the third terminal at JN Port is handed over to another operator, you have three terminals at the port to chose from. the customer has a choice within this small section — if he does not like the tariffs here, he can go to Mundra, Pipavav or Kandla. The cargo within India can be sent anywhere. TAMP’s existence will kill privatisation. There is no TAMP-like body anywhere in the world.
Efforts:
JN Port, NSICT, third terminal. By integrating these terminals, the combined capacity can be enhanced. This is because, the terminals individually can handle only one mainline and one or two feeders at a time, but their integration will allow them to handle four mainline and at least five feeder vessels simultaneously.

———————————————————————————————
SOUTH ASIA COULD BENIFIT FROM COMMON CURRENCY
South Asia could benefit from common currency
South Asia also initiated its faltering steps towards purposive unified action in the form of the SAARC. However, not only has the logic of unity not caught up with the member-nations but there has been no progress on most of the items under its agenda.
common currency benefits could be:
• Reduction in transaction costs across the frontiers. Conversion of one currency to another involves costs that increase the production and distribution costs.
• Facilitating the movement of scientific, technical man power among member-nations, as conversion losses will be neutralised.
• As conversion costs are eliminated, a common currency could play a major role in formal trade. If free trade is permitted in the region, much of this informal trade could be translated into formal trade which, in turn, could earn valuable revenue for the governments.
• Pre-empting a South Asian Central Bank, which will facilitate further economic integration. (another idea in the pipeline (not related to Saarc) : Asian monetary fund in competition with the IMF. Can be conceived with the amount of foreign reserves with India, China, Japan, South Korea)

factors that have hindered any effort made towards a common currency:
1. sovereignty : South-Asian Countries have been averse to surrendering their decision-making powers on a wide range of issues.
2. Collective decision-making is a slow affair in the SAARC network. The issues of the creation of SAPTA and SAFTA are good instances. The creation of both would have enabled all countries of the region derive vital producer and consumer surpluses.
3. historical legacy of the region is another factor that makes cooperative efforts difficult. For instance, the partition and the creation of a theocratic state, that in its wake, maimed and displaced millions. (????)
4. peculiar geography of the region. India is bigger than all the other countries of the region put together. This has driven the smaller countries to believe that India is the `dominant big brother’. Consequently, any meaningful effort on India’s part is looked upon with suspicion.
5. weak economic fundamentals(most impt). For the creation of the monetary union, controlling inflation within a fixed range is a pre-requisite. But in the South-Asian region, different countries are at different levels of economic development. For instance, India’s economy is 78 percent the size of the region. In the 1990s, India grew at a rate of more than 6 percent, compared to Pakistan’s rate of close to 3.5 percent

what can be done to move towards a common currency?
1. The South Asian countries have to agree on common targets for a whole range of monetary variables, such as interest rate fluctuation bands, fiscal deficit limits, inflation rate fluctuation bands.
2. A South-Asian Central Bank must be soon established, to formulate an appropriate common monetary policy. The bank should also frame de minimus provisions aimed at the least developed countries.
3. An interim agency to monitor the progress towards a common currency should be instituted in the next SAARC meeting itself.
4. A periodic meeting of SAARC finance ministers should be initiated to discuss the major stumbling blocks in the path of a common currency.

South Asian currency: Peace driver or pipe dream?

Skeptics fear this might be an offshoot of the “feel good factor” in the Indian economy triggered not only by a good monsoon but an even better supply of foreign exchange reserves, which crossed the US$100 billion mark last month.

A recent Goldman Sachs report that India would be the world’s leading economy after 50 years has created a new euphoria. The visible growth of the infrastructure sector, especially roads; buoyancy of the stock markets; the continuing IT boom and the incredible penetration of telecommunications – rounded off by GDP growth of over 7 percent – all add up to make a comfortable and confident picture.

While 2004 promises to be a year of the “feel better factor”, the Indian prime minister’s peace initiative and efforts to build bridges with Pakistan could easily be misunderstood as election year rhetoric. Nevertheless, what the premier is suggesting is novel. Instead of following the well-worn track of dispelling political tensions first and then following up with economic cooperation, he is using economic cooperation to bridge political differences, points out the Confederation of Indian Industry Director General, Tarun Das.

A common currency would foster closer economic ties and nations could tackle problems such as drug trafficking, money laundering and smuggling. According to the Research and Information System for the Non-Aligned and Developing Nations, a common currency could help to double trade among South Asian nations to $10 billion.

A common currency for any region needs to have strong fundamentals. Prolonged periods of economic cooperation, cooperation in matters relating to trade, investment and the flow of people are some of the necessary trends that normally precede the creation of a common currency. Other issues that need to be addressed include lowering tariffs – or better still – tariff-free imports between SAARC countries and freer investment norms and visa regimes.

India and Pakistan are in the “pre-historic age” of economic and trade cooperation. Both have been trading for all but nine of the last 56 years. This trade has been miniscule, as both countries export only five percent of their total exports to the region. In order to establish a common currency, important lessons need to be taken from the European Union. Patience, mutual trust and confidence among the 1.4 billion people in the seven South Asian nations will be essential.
The peace initiative between India and Pakistan has only just begun. Europe emerged as a common currency zone 50 years after the end of World War II. India and Pakistan have not been talking to each other since December 2000.

.

While it is evident is that massive work is required to achieve this coveted objective. A common South Asian currency would be used skillfully in the future as the main driver of peace and deter any nuclear sabre-rattling by India, Pakistan or China. In the long run, if this currency becomes a reality, China could be brought into the common market fold as well. Once South Asia and China forge common economic ties, a huge market would emerge, covering half the world’s population and three-fourths of its markets in terms of consumers under the age of 40.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Categories

%d bloggers like this: