India accounts for 16% of the world population and 2.04% share in world manufacturing. China having 23% share in world manufacturing too had only 2.4% share in world manufacturing in 1991. China now with this 23% share in world manufacturing has pushed even the US at number 2 with 17.5% share in the world manufacturing. In the aforesaid 2.04% share of India in world manufacturing too, almost two-third is accounted-for by the foreign MNCs and foreign brands. In the residual one third of 2.04%, which comes around to 0.67% of the world manufacturing, many Indian companies have been doing only job-works for the foreign products and/or brands. In certain sectors, share of India is just miniscule, like in world ship building the share of India is just 0.01%. Therefore, if India has to gain a respectable share in the world manufacturing, balance the income outflow on the foreign investments by matching inflow of investment income from outbound direct investments (ODI) and develop indigenous technology to raise world-class enterprises with world-class indigenous products and brands then, it has to pursue upon following five strategic initiatives:
1.
Active Acquisitions Abroad.
2.
Techno-Nationalism to Pursue
Techno-Globalism.
3.
Industry Consortiums Approach with
Facilitating, Technology development Cooperative Associations/ Agreements and Cooperative Research Law.
4.
Enabling and Supportive Environment for
Startups and Harnessing Entrepreneurship, as well as for Self Reliant
Infrastructure Development
5.
Enhanced Investment and Research for
Integrated Agriculture Development.
1.
Active
Acquisitions Abroad:-
India can
take a quantum leap in manufacturing world class products and promoting world
class brands with the latest state-of-the-art technology, by acquiring
companies abroad, possessing advanced technology, products, brands and supply
chain networks. China has used this strategy to the maximum extent. India too
has numerous such success stories of employing this strategic approach. In most
of the cases of Chinese cross-border, mergers and acquisitions, the Chinese
government is the largest share holder of the acquiring firm. Indian companies
have also acquired more than 1100 companies abroad between 2001-2012, and many
such Indian companies have emerged to become a Trans-National Corporations
(TNC) by virtue of such acquisitions. In 80% of such cross- borders mergers,
the acquiring Indian companies have got a controlling stake in the foreign
firms. Some top 25 acquiring companies of India have
made almost 84 overseas acquisitions in these 12 years. Some such success
stories, would be worth mention here to understand the relevance of active
acquisitions policy.
1.1.1 Tata Motors:
Tata Motors’ rise among top 5 automobile
companies from a rank below 34th in the world, by acquiring the
Daewoo Commercial Vehicle Ltd. (DCVL) in South Korea, Hispano in Spain, Jaguar-Land
Rover in UK and so on is a good case to emulate. Tata Motors’ 95% sale, prior
to these takeovers was confined to India alone, and it had no presence in the
high end market for trucks, buses and cars either in India or abroad. The two
prestigious acquisitions have turned-around the fortune of Tata Motors. The two
cases of Tata motors, stated hereunder are good examples to emulate:
(i)
Tata-Daewoo: - When Sweedish Company, the ABS Volvo
introduced its high-end trucks and buses of 200-400 horsepower capacity. Tata
Motors had no high end models above 200 horsepower capacity. Moreover, Tata
Motors could take 3 to 4 years, if it would have decided to develop its own
high-end models. Moreover, they could succeed or even fail in the market.
Meanwhile in the low-end models as well they could stand squeezed out, if Tata
Motors would have taken longer time to counter. Volvo was almost likely to have
a monopoly in high-end trucks and buses and it could squeeze out Tata Motors in
low-end market also. The Volvo was inclined to import and sell the completely
built trucks and buses imported from out-side or just to assemble units locally
from imported components, as is the practice in the name of global division of
labour instead of manufacturing these including the components indigenously
from scratch. So, instead of taking a long route of developing own high end
models, the Tata Motors decided to acquire a bankrupt and heavily indebted
company of South Korea, the Daewoo Commercial Vehicles Ltd., then having a 25%
market share of high end trucks of 200-400 horse power in South Korea. By
virtue of this acquisition Tata Motors began to roll out high-end trucks of
200-400 horsepower within a year from their Indian Stable and also developed
most advanced, world class trucks through design and development efforts at
Tata-Daewoo facility, which are now very popular in 39 countries and are also
being assembled abroad as well in Pakistan, UAE etc.. In the course of
developing such high-end models of trucks and buses, Tata Motors had also
acquired another company Hispano in Spain and had a tie-up with Marcopolo in
Brazil for high-end buses and so on, for ready to employ technology. So, they
could scale up among top 5 auto-majors of the world from an insignificant 34th
place.
(ii) Jaguar-Land Rover (JLR):- Jaguar-Land
Rover cars have been much sought after world class luxury cars. The Ford
Motors, which had earlier acquired this venture in Europe too was not able to
run the JLR units, and was incurring heavy losses. Tata Motors, till then had
very ordinary models of Indica and indigo range of cars mostly confined to
India an market which is also dominated up to 85% by foreign models. So, the
Tata Motors aspiring to transform
quickly into a world-class car maker of high repute acquired this prestigious
company, in hold of very high-end technology to enable Tata Motors access the
world market of high-end cars and get
access to the state-of-the-art technology. JLR cars are sold in 170 countries.
Thus by active acquisitions route the Tata
Motors moved up from 34th
position to 5th in the Automobile Industry worldwide, by acquiring
Daewoo Commercial Vehicle Ltd. of South
Korea , Hispano in Spain and Marcopolo in Brazil and JLR in Europe. In bus
manufacturing it is 4th largest company in world.
1.1.2
Tata Tea became 2nd largest tea company in the World from 34th
rank by acquiring Tetly brand in UK:- Tata Tea had a very
low-key presence in the Indian retail tea market and had no presence outside
India. Tetly Tea, a UK based company with 21% market share in Europe and 17 %
market share in U.S. in the tea bags was passing through severe financial
crisis. Therefore, Tata Tea acquired Tetly for 43 million dollars to take the
advantage of the brand equity of Tetly. By virtue of this prestigious acquisition
now Tata Tea, rechristened as Tata Global Beverages Ltd. thereafter, is now the
second largest tea company of the
would after the Anglo-Dutch company the Unilever of UK.
Gippsland GA200- Low-wing single-engineagricultural aircraft.
Gippsland GA8 Airvan-
It can seat eight including one pilot.
Gippsland
GA10 Airvan- It is a ten-seat, single-engined
utility aircraft.
Gippsland GA18-
It is a twin-engine turboprop, high-winged, “short take off and landing”(STOL)
aircraft.
NAL NM5- Jointly
developed by National Aerospace Laboratories
(NAL) and Mahindra Aerospace.
Now it has set up
plants in India as well and now orders for parts and tie-ups are pouring in.
It
has plants at:-
Morwell, Victoria, Australia; at Bangalore-
Under Construction
Mahindra Group has now set up a plant for
aerospace component manufacturing at Malur in Karnataka with an investment of
about Rs 40 crore created in 2009. Mahindra Aerospace has extended the Mahindra
Group’s automotive design and manufacturing expertise to the growing aerospace
industry, through its components sector. Mahindra Aerospace has acquired
several other companies with design and manufacturing experience and is now
strengthening its capabilities for lowering the cost of production. It also
developed a tie-up with GE Aviation’s Hamble facility, part of GE Aviation’s
Structures operation, with its headquarters and primary production at
Hamble-Le-Rice in Southampton, Hampshire, United Kingdom.
Now Mahindra’s utility aircraft business, based
in Australia, currently produces the Airvan 8, the most capable, rugged and
versatile utility aircraft in its class. Certified in 38 countries developing a
10-seat turboprop, the Airvan 10, which is on schedule for certification in
2015. So, this acquisitions route has given a quick a escalator to foray into
aerospace.
1.1.4 Videocon’s Attempt to buy Daewoo
Electronics:- Indian white goods company the Videocon
had attempted to acquire bankrupt Daewoo Electronics in 2006 for USD 700
million to get access to its :-
a)
3rd generation entertainment
electronics
b)
Manufacturing facilities of Daewoo
Electronics in 25 countries
c)
Advanced R&D facilities in three
countries South Korea, Japan and Europe.
1.1.5 Videocon’s Acquisition of French
company Thomson S.A. for colour Picture Tubes:- The Videocon acquired the
French company Thomson S.A. for Euro 240($289million) to get latest
state-of-the-art technology for colour TV tubes in 2005 having manufacturing
facilities in China, Poland and Mexico as well with 11500 employees
a)
Hensen Transmission in 2006 in Belgium
for $565, specializing in gear box technology. (It sold back it in 2009)
b)
Senvion in Germany (then operating as RE
power systems) sold it back in January 2015 and now has its own R & D
centre in Germany.
At our time Suzlon was ranked as world’s
5th largest Wind Power company. It has its presence in 30 countries.
Its promoter Mr. Tulsi Tanti was having textile business with just 20
employees. When Mr. Tanti started this Wind Power venture, even banks were
hesitant to offer loans for initial 10 years. Now the company has R & D and
technology centres in Germany, Denmark and Netherland (Holland).There are many more such success stories
of acquisitions route. But, now the Chinese story of Lenovo also deserves
attention here.
1.2 Chinese Success Story of Lenovo:- Lenovo
was started with a capital of 2lakh Yuan (Chinese currency) equating USD 24,000
i.e Rs. 2.5lakh at that time on November 1, 1984. Even till 2005 it had no
significant presence and had a turnover of less than USD 30 million. Then, it
acquired the personal computers (PC) division of American company IBM (world’s
IT major) for $2.1 billion as part of Chinese government’s road maps to take
over the world in IT hardware business. Now it is world’s largest personal
computer manufacturer. It also acquired the sever division of IBM, the
prestigious telecom major of US the Motorola, Japanese NEC and a dozen other
companies. Now it is world’s prestigious IT and Telecom major with $ 50 billion
(Rs 3,20,000 crores) turnover 57,000 employees and business operations in 160
countries.
a)
India has the presence of its domestic
companies in most of the sectors to initiate acquisitions in all such diverse
sectors abroad. In the initial phase of liberalization, the government had over
the years a mypic view of outbound direct investment (ODI), ever since the
on-set of reforms in 1991. While China had a pro-active vision in this regard
since 1993 to have allowed Chinese companies to list abroad and support in
acquisition. Even, actively acquired companies worldwide through its public
sector undertakings. Now, with gradual liberalization by India as well, with
respect to liberalizing ODI by Indian corporates overseas- FDI (OFDI) is
picking up. Only very recently, it has become easier for Indian companies to
invest abroad; the ceiling to raise funds by pledging shares and domestic as
well as overseas assets has been relaxed. The annual investment ceiling for
Indians investing abroad to establish joint ventures and subsidiaries has also
now been raised from $75000 to $ 1,25,000, through it is also inadequate.
However inspite of all the odds of
obstructive policy regime, according to the OECD, between 2006 and 2012, the
FDI outflow or ODI from India was about $ 103.30 billion, while, still the
inflow of the inbound FDI was double of that amount ($212.70 billion). Still,
last year, while the GDP grew by about 5.5 per cent, the overseas-FDI (OFDI)
from Indians increased by 8 per cent. Most of this OFDI is in the form of
mergers and acquisitions. The outbound acquisitions made by India Inc in the
decade since 2003 was found to be worth $ 126 billion, according to Dealogic.
In the manufacturing sector, $21 billion have been invested by Indian companies
abroad for acquisitions between 2007-14.
In addition to acquire manufacturing
ventures and brands, India also needs to secure sources of energy that are sometimes
more easily accessible abroad – hence the purchase of oil and gas fields as
well as coal mines overseas needs to be targeted for energy security. Recently,
three large Indian companies have already initiated major deals in Australia’s
coal industry – Lanco infratech acquired Griffin Coal for A$730million, GVK
acquired Hancock Coal and Infra for $1.21 billion, and the Adani Group, which
is acquiring Abbot Point for A$1.8 billion, is in negotiations to invest in the
Carmichael coal mine, which could be worth over A$7 billion. Indeed. But on top
of all Indian companies need to acquire foreign competitors in order to learn
from their technology and thereby save years of research and development as
well as the brands and established supply chains. So, it needs greater
facilitation and enabling environment from the government.
b)
Several Indian companies have vast
accumulated reserves and are lacking opportunity for investment in domestic
markets. So, they may be counseled, motivated, assisted and given support to
access markets, technology, new products and brands via acquisitions abroad.
c)
Public Sector Undertakings are having a
pile of reserves of more than Rs 2 lakh crores. This amount can be well
employed for acquisitions abroad in a calibrated manner.
d)
To fund more and more acquisitions
abroad vast financial resources would be required. Therefore IPOs abroad i.e.
Issue of securities abroad by Indian companies can be used to mobilize
resources more and more financial resources for acquisitions. The Chinese
company Alibaba alone has garnered $25 billion (Rs1,60,000 crores) in its
public issue in U.S.. China has been encouraging its companies to list abroad
since 1993 and these companies have garnered $140 billion (Rs.9lakh crores) between
2009 and 2014 alone. India has though earlier lacked this vision to give
freedom to Indian companies for long ever since liberalizing the FDI since
1991. But, now policies have been partly liberalized to allow Indian companies
too.
e)
A working group with full
confidentiality needs to be created to identify the sectors, fields of
technology and companies to be take over via outbound direct investment through
mergers and acquisitions abroad.
f)
A special purpose vehicle (SPV) in the
form of an investment trust or other outfit may also be thought for mobilizing
investable funds mostly from abroad through NRIs. Private Equity is also a good
source participatory notes kind of options may be opened for funding this SPV
for acquisitions abroad.
2.
Techno
Nationalism and pathway to Techno Globalism:-
The
Chinese ideal of developing home grown technologies, promulgating regulatory
norms in favour of such home grown technologies development of substitutes for
foreign technology with certain modifications and supporting such modified
substitute through stringent tEchnological standards for excluding foreign
competition is being perceived as Techno Nationalism. China has also succeeded
in developing world class technologies ahead of others by initial adherence to
even inferior technologies through prescribing own nationalistic technical
standard. This pathway of taking technological lead in the world by
promulgating technical standards in favour of home grown technologies is called
Techno Globalism. Some examples of Techno Nationalism to Techno Globalism are
being given hereunder:
i.
TD-SCDMA to TD-LTE: At the time of
launch of third generation telecom technologies China has developed its own 3-G
telecom technology, the TD-SCDMA. It was relatively inferior and imperfect
vis-Ã -vis. Western 3-G technology. But, China laid its technical standards in
favour of TD-SCDMA in spite of its being inferior and tortuous technology. By
adopting this Techno-Nationalism China could generate enough resources TD-LTE
technology, the most advanced technology, ahead of Euro-American Companies.
Today, 45% 4G networks has been using TD-LTE technology or 4G
telecommunications. Reliance and QUALCOMM operating in India have also adopted
these technologies.
ii.
EVD in place of DVD:- DVDs and DVDs
players are popular across the world. But, China developed a variant of DVD and
DVD players to stop the outflow of 4.5$ as royalty for ever DVD player. This
variant was EVD(Enhanced Versatile Disk) and EVD players and promulgating
technical standards to favour EVD and EVD players in China.
iii.
WAPI in Place of Centrino: All the
wireless telecommunication products across the world are based on Centrino
structure of Intel. China developed and alternative encryption language WAPI
(WLAN Authentication and Privacy Infrastructure). Then in 2004 China
promulgated its technical standard in favour of WAPI and announced that the
wireless telecom product to be sold in China must be WAPI encrypted. This
technical standard was going to prohibited the entry of Euro American Companies
into China. Either the Euro American Companies had to encrypt their products in
WAPI by paying royalty to China or they had to forgo the lucrative Chinese
market. After high level negotiations with the offer of several other benefits
to China and on the intervention of the then American President China agreed
for not making WAPI encryption mandatory. According to some of the observers
China has reluctant because WAPI is still not WIFI friendly. China has been
working to make WAPI, WIFI friendly. The day they would succeed make all
telecom products WAPI encrypted mandatory. India as also considered as the
software capital of the world. So, If India too tries, it can also make such
breakthroughs.
iv.
Red Flag Linux:- China has been
endeavoring to promote its home grown alternative for the Microsoft operating
system windows, the Red Flag Linux.
v.
COS in place of WINDOWS:- To further save the royalty going out for the
Microsoft operating system windows, China has developed, the Chinese Operating
System (COS). The COS has many enhanced
security features then the windows. China has launched thi9s new operating
system on October 27, 2014 and has announced that every year windows would be
replaced by COS on 15% of the computers installed in the public sector and
government departments. India has a larger battery of software engineers that
China but has not yet endeavored to do so to prevent outflow of billions of
rupees in foreign exchange as royalty for operating systems for Windows,
Android etc. China aims to say goodbye to Windows and Android by adopting the
COS and by further improving it to completely replace windows and android by
COS.
3. Industry Consortia and Technology Development
Cooperative Associations/Agreements and
Cooperative Research Law:-
Industrial Research is a high cost prerogative and
most of the industrialized countries have promoted industry-level
pre-competitive researches to develop latest state of the art technologies for
a host of industries through government support via 3 cooperative routes. The 3
common cooperatives routes have been: (i) Initiating formation of industry
specific consortia for technical and
market research and liberal state funding of these consortia. (ii) Facilitating
formation of Technology Development
Cooperative Association and state funding of these. (iii)
Facilitating, recognizing and supporting Technology
Development Cooperation Agreements among 2 or more companies as well as by
industry level agreements. The United States has enacted the Cooperative
Research Act, as early as in 1984 to develop Industry Consortiums for
collective industry level efforts in R&D and market research with government
support. Even the Airbus Industry was initially developed as an industry
consortium of aerospace component manufacturers of Europe to launch high-end
civilian aircraft in competition with the Boeing of the U.S. This Airbus
Consortium i.e. “association of Aerospace component manufacturers” from across
the Europe, then developed and launched high-end civilian aircrafts under the
brand of Airbus Industries consortium. The same has been converted from this
Airbus consortium into Airbus Corporation much later. All the consortium
members, who were aerospace component makers became shareholder into the
corporation made from consortium.
4. Impetus
For Homegrown Products and Brands with Greater Self Reliance in Infrastructure
:
4.1 Power
of Homegrown Ventures for Made By India Brands:
Ever since Independence and even before, the start-ups and small-time ventures
have turned into highly successful legends. We have to power such beginnings
into legends. Some of them are :
a) Amul: It was a tiny start up of 126 village farmers
of the then Kheda block as a village cooperative to collect and deliver 247
liters of milk daily, 420 km away to Bombay Milk scheme daily; Even these farmers
had to go on a strike for 15 days to sell the milk directly, instead of
delivering it to the milk collecting
company , the Polsun Ltd. Appointed by the British government and Bombay Milk
Scheme in 1946. Within 2 years, the membership grew to 432 with the collection
of 500 litres of milk. In 1954, this cooperative set a plant for butter and
milk powder manufacturing. Today, it is a 3 tier cooperative federation which
has a turnover of Rs 20,000 crores, 31.80 lakh members, of which 70% are
marginal or landless (tenant) farmers with 17 milk unions, 16,914 village
cooperatives spread into 24 districts. It is competing with large MNCs like
Nestle, Cadbury, Danone etc. in milk and milk products like butter, chocolate,
ice cream as well as in food products like pizza etc. It has pioneered where
the white revolution in the country by inspiring all other states to emulate
this successful model whereby there are 1.5 crore milk producers as members of
1,44,500 milk cooperatives, 184 district milk processing union in 22 states.
b) Nirma: The Nirma, which has a
turnover of Rs. 10,000 crores and 18,000 employees was started as a one man
outfit on part -time basis as a side business by Mr. Karsan Bhai, then a
government employee in a 10x10 feet room. Initially he used to sell detergent powder as a peddler on his bicycle
in the morning evening, which he himself made by blending the chemicals.
Gradually, he bought a hand rotated mixture and now it has grown into a
multi-location company. When Nirma acquired American company the Searles Valley
Minerals Inc. it got into the league of 7 top Soda Ash manufacturers of world.
Nirma entered into the market to sell detergent powder at Rs.3.50 per kg, when
Hindustan Lever sold it at Rs. 15 per kg. Today it controls 38% market share in
detergents and 20% in toilet soaps. At one point of time, Nirma was a more
popular brand in Bangladesh.
c) Biocon:
Biocon is the largest bio-pharmaceuticals company of India, 7th largest
employer in Bio-pharmaceuticals in world and 6th Bio-pharmaceuticals company of
the world having ventures worldwide, with its products being popular in 109
countries was started by Kiran Majumdar Shaw in a rented Garage with Rs
10,000/-. Even the banks refused to give her loans initially. But she continued
her efforts. Today she is richest lady of the country and when brought her
public issue the IPO was oversubscribed 30 times.
d) Rays
Power: Rahul Gupta, having too many backs in his B.tech,
set up a solar power venture in 2011. But he and his partner could not apply
for a tender for want of Rs 1.37 lakh as earnest money. So, they began to act
asa consultant. By 2012 they could mobilize some revenues from consultancy
business and started applying for setting up solar power set ups. Today in 2015
their company is having a turnover of Rs 500 crore and by mid 2016 the company
is eyeing a turnover of Rs. 1000 crores.
4.2 Need for Greater Self Reliance in the Field
of Infrastructure:
The
infrastructure sector occupies fulcrum position in the economy, and investment
in infrastructure can stimulate multifold growth through flow of funds, down
the value chain, involving manufacture of
assemblies, sub-assemblies, components, sub-components and so on. Therefore,
greater domestic participation in Railways, Power Generation, Ports, Airports,
Road Construction etc. can kick-start rapid development and growth. For instance, if a railway coach or bullet
train is manufactured indigenously and if all the components are procured
indigenously, it can generate more than 10 fold overall turnover in the economy
in the production of scores of downstream assemblies, sub-assemblies,
components, subcomponents and parts like wheels, axles, bearings, chassis, body
frame, AC, fans, window-panes,
bulbs, coils and similar other components. If merely an electric coil is ordered indigenously by that
indigenous railway company, the coil supplier shall in turn procure enameled
wire, wire enameling company shall
have to procure copper wire, copper wire manufacturer shall have to procure
copper ingots and so on. Since, China has groomed its own railway engineering
companies by capturing the entire domestic value chain of manufacturing, it
could now capture railway construction projects and undertake supply of all
kinds of trains viz. high speed
multiunit trains, electric multiunit trains, bullet trains etc. across the
world in all continents covering more than 70 countries including US, South
East Asia, Latin America and Africa. The turnover of major Chinese railway
engineering companies is more USD 400 billion. The “China Railways Construction
Corporation” and “China Railway Group Ltd.” alone have a turnover of USD 96.19
billion and USD 88.94 billion respectively. Had china invited foreign players
it would not have developed its own indigenous capacity, which is also
strengthening its diplomacy.
Roadmap for Indigenous Resource
Mobilization: Creation of one or more Special Purpose
Vehicles (SPV) and mobilization of resources for such SPV through issue of
bonds, securities, IPOs Abroad, Quantitative easing or fresh monetization. If the resources are generated even by fresh
monetization for
infrastructure development, then the fresh money takes a longer route to reach
the ultimate consumers, involving a longer time gap to rule out any possibility
of inflation, as by that time corresponding availability of goods also expands.
5
Integrated Agriculture Development through Enhanced Research and Public Expenditure:-
India
has highest area of cultivable land, largest number of cattle wealth and most diverse
agro-climatic zones, numbering 127. Out of 16 crore hectares of land. The
irrigated area, though highest in the world yet is only 5.95 crore hectares. If
the 20 crore hectare meters of waters flowing away in to the ocean is properly
used can help us in raising our irrigated area to 14 crore hectare (See Table
1)
TABLE 1: LAND AND WATER RESOURCES
OF INDIA1
PARTICULARS
|
QUANTITY
|
Geographical Area of India
Flood Prone Area
Ultimate Irrigation Potential of
the Country
Total Cultivable Land Area
Net Irrigated Area
Natural Runoff (Surface Water and
Ground Water)
Estimated Utilisable Surface Water
Potential
Groundwater Resource
Available Groundwater resource for
Irrigation
Net Utilisable Groundwater
resource for irrigation
|
329 million ha.
40 million ha.
140 million ha.
184 million ha.
50 million ha.
1869 Cubic km.
690 Cubic km.
432 Cubic km.
361 Cubic km.
325 Cubic km.
|
Besides, the productivity in India
for most of the agro-produced is less than 1/6th of countries having
higher agriculture yields (See Table 2)
Table 2. Productivity Gap in
Agriculture of India
Average yield,
India (2010)
|
||||
Rank
|
Produce
|
(tonnes per
hectare)[50]
|
(tonnes per
hectare)[51]
|
Country
|
1
|
Rice
|
3.3
|
10.8
|
|
2
|
Cow milk
|
1.2
|
10.3
|
|
3
|
Wheat
|
2.8
|
8.9
|
|
4
|
Mangoes
|
6.3
|
40.6
|
|
5
|
Sugar cane
|
66
|
125
|
|
6
|
Bananas
|
37.8
|
59.3
|
|
7
|
Cotton
|
1.6
|
4.6
|
|
8
|
Fresh Vegetables
|
13.4
|
76.8
|
|
9
|
Potatoes
|
19.9
|
44.3
|
|
10
|
Tomatoes
|
19.3
|
524.9
|
|
11
|
Soyabean
|
1.1
|
3.7
|
|
12
|
Onions
|
16.6
|
67.3
|
|
13
|
Chick peas
|
0.9
|
2.8
|
|
14
|
Okra
|
7.6
|
23.9
|
|
15
|
Beans
|
1.1
|
5.5
|
|
Variation in the yield across the
country is also very high. Actual yields against the experimental
ones are also very low. If the available technology is successfully taken to
the farms it can do the miracle. (Yields Differences are given in Table 3 and
4)
Table
3 : Yield Differences in Staes.
Average
farm yield in Bihar
|
Average
farm yield in Karnataka
|
Average
farm yield in Punjab
|
|
kilogram per
hectare
|
kilogram per
hectare
|
kilogram per
hectare
|
|
Wheat
|
2020
|
unknown
|
3880
|
Rice
|
1370
|
2380
|
3130
|
Pulses
|
610
|
470
|
820
|
Oil seeds
|
620
|
680
|
1200
|
Sugarcane
|
45510
|
79560
|
65300
|
Table 4. Yield
gap within Country
Irrigated
|
Rainfed
|
||||||||
State
|
Paddy
|
Wheat
|
Mustard
|
Maize
|
Bajra
|
Jowar
|
Groudnut
|
||
Andhra Pradesh
|
123
|
23
|
191
|
231
|
83
|
||||
Assam
|
175
|
46
|
144
|
||||||
Bihar
|
162
|
74
|
174
|
195
|
25
|
||||
Gujrat
|
60
|
43
|
124
|
99
|
191
|
541
|
1
|
||
Harayan
|
55
|
25
|
1
|
3
|
85
|
||||
HP
|
49
|
163
|
420
|
11
|
|||||
Karnataka
|
132
|
28
|
258
|
292
|
49
|
||||
Kerala
|
166
|
||||||||
MP
|
135
|
73
|
89
|
105
|
165
|
231
|
55
|
||
Maharashtra
|
140
|
102
|
|||||||
Orissa
|
115
|
66
|
63
|
153
|
60
|
||||
Punjab
|
87
|
40
|
25
|
6
|
|||||
Rajasthan
|
27
|
82
|
130
|
114
|
309
|
106
|
|||
Tamil
nadu
|
61
|
163
|
479
|
62
|
|||||
Uttar
Pradesh
|
101
|
93
|
164
|
106
|
92
|
106
|
|||
West
Bengal
|
90
|
19
|
131
|
11
|
|||||
Necessary Steps to turnaround the agriculture:
1)
To increase the irrigated area from the
present 6 crore hectares up to 10.12 crore hectares by transferring water from
surplus river basins to deficit river basins.
2)
To enhance the R&D Expenditure on
agriculture to 1.2% og GDP from present of 0.7%.
3)
To expedite to transfer the lab technologies to farm land.
4)
Creation of a special purpose vehicle to
facilitate market research, promote organic farming, proper marketing, storage,
grading and branding etc.
5)
Extending the available lab technologies
of dry land farming to rain-fed regions.
6)
Better customization of Agri-Insurance
and Agri-loans.
Indeed, Indian economy is largely
driven by farm incomes because the farmers only spends all their disposable
incomes which generates turnover, demand, investment, output, employment and so
on. Otherwise, the rise in market capitalization and corporate incomes which
are normally reinvested, do not generate matching turnover.
