Economy

Mohammad Anas Wahaj | 08 dec 2015

United Nation's '2015 Climate Change Conference' is being held in Paris (France) where 196 countries are on the table to reach consensus on tackling climate change and contain global temperature rise and keep it below 2°C. The recent study, 'Climate Change and India: Adaptation Gap (2015) - A Preliminary Assessment', conducted by Prof. Amit Garg of IIM Ahmedabad, Prof. Vimal Mishra of IIT Gandhinagar and Dr. Hem Dholakia of Council on Energy, Environment and Water (CEEW), found that India would need over US$1 trillion from now until 2030 to adapt to the adverse impacts of climate change. The study identifies India's preliminary financial, technology, and knowledge gaps in adaptation, as well as capacity building and institutional needs. The study also estimates that about 800 million people living across nearly 450 districts in India are already experiencing significant increases in annual mean temperature going above 2°C warming pathway. For the whole of India the estimated increase will be 1-1.5°C in the near term (2016-2045). The implications would be disastrous for agriculture and crop production, and the effects could be more pronounced due to estimated increase in extreme precipitation events, resulting in flooding and significant damage to infrastructure. While commenting on the importance of the findings, Mr. Ashok Lavasa (Secretary at the Ministry of Environment, Forest and Climate Change), said, 'Supporting and enhancing the sustainable development of 1.25 billion people is at the heart of India's adaptation gap filling strategy. The fruits of development should not be lost due to increasing adaptation gap in the future.' Read on...

CEEW: India's Climate Adaptation Gap Amounts to USD 1 Trillion, reveals CEEW, IIM-A, IIT-Gn study
Author: NA

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Mohammad Anas Wahaj | 30 nov 2015

India's agriculture and farming products contribute to 15% of its exports (US$ 40 billion), 17% to its GDP, and employs nearly half of its total workforce. R. Gopalakrishnan, business leader and currently non-executive director at TATA Sons Ltd., suggests that policy makers should not ignore India's agriculture sector and bring it into the main policy agenda. The sector is in a great need for a business model innovation. Government programs like 'Digital India' can connect farmers through smart phones, 'Make in India' can work to enhance exports and 'National Skills Development Mission' can upgrade skills of the 260 million farming and agricultural workforce. Experts suggest that India has the potential to double its agricultural exports and increase its farm output by lesser but better trained workers. Senior scientist and director of the Indian Institute of Pulses Research, Narendra Pratap Singh, while explaining India's pulses crisis says, 'It is not lack of research as much as policy support that is currently missing in pulses.' Mr. Gopalakrishnan recommends innovative and intelligent approach to agriculture. Collaborative programs between the center and the states can bring the next green revolution. A research paper that Mr. Gopalakrishnan co-authored with Y.S.P. Thorat (former chairman and MD of National Bank for Agriculture and Rural Development), titled 'Sarthak Krishi Yojana', suggests a coherent framework to transform agriculture and is inspired by the national industrialisation experiences through five pillars - technology, risk, institutionalisation, policy and skills. Read on...

Business Standard: Intelligent farming - Farming and agriculture in India are crying out for a business model innovation
Author: R. Gopalakrishnan

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Mohammad Anas Wahaj | 27 oct 2015

In the recently published World Bank report, 'Ending Extreme Poverty and Sharing Prosperity: Progress and Policies' (Authored by Marcio Cruz, James Foster, Bryce Quillin, Philip Schellekens), it is estimated that the proportion of people living in extreme poverty in the world is expected to decline from 12.8% (902 million) in 2012 to 9.4% (702.1 million) in 2015. Although India had the largest number of poors in 2012, but its poverty rate estimate of 12.4% (Modified Mixed Reference Period or MMRP method) is one of the lowest among those countries with the largest number of poor. The report also mentioned that India might have been overestimating the number of its poors depending upon the method applied to collect data - 21.9% (Uniform Reference Period or URP method) for 2011-12 and 29.5% (Mixed Reference Period or MRP method). However the recent report, 'India Rural Development Report 2013-14' (Authored by Surinder S. Jodhka, P. S. Vijay Shankar, Himanshu Kulkarni, Siddharth Patil, Sanchita Bakshi, Mekhala Krishnamurthy, Kaushal K. Vidyarthee, Amita Baviskar), prepared by IDFC Rural Development Network and endorsed by the Ministry of Rural Development (Govt. of India), estimates that nearly 7% of India's rural population is still living in 'extreme poverty', an issue of great concern for the policy makers. But a good sign is that the number of 'very poor' in rural India came down much faster in the period 2004-12 as compared to the preceding decade - 16.3% in 2004-05 to 6.84% in 2011-12. Report mentions that Chhattisgarh (15.32%) has the highest percentage of 'very poor', followed by Madhya Pradesh (15.04%), Odisha (11.46%), Bihar (10.45%) and Jharkhand (9.23%). Moreover, poverty among marginalized groups like Scheduled Tribes (45%) and Scheduled Castes (31%) in rural areas remains high in 2011-12. When occupational groups are considered for poverty estimates in rural areas, agricultural laborers (40%) have the highest poors, followed by other laborers (33%), self-employed in agriculture (22%) and self-employed in non-agriculture (18.63%). Read on...

The Indian Express: Why poverty in rural India is still a concern
Author: Ruhi Tewari

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Mohammad Anas Wahaj | 06 oct 2015

Indian PM Narendra Modi's recent visit to Silicon Valley and meetings with the top executives of US technology giants, have possibilities and opportunities to build partnerships and collaborations for 'Digital India' concept. Moreover access to the attractive 1.25 billion people's market that India offers would be too hard to refuse for Silicon Valley companies. But what these companies also expect is the faster pace of economic reforms, ease of doing business and less bureaucratic hurdles and regulations. The recent exit of global commodities trader and hedge fund manager Jim Rogers from the Indian market gives a negative signal to the global investor community. India's digital upgrade holds a promise for educational and social modernization leading to advanced and skilled workforce, that are preconditions for a thriving economy along with sufficient consumption. Although India's literacy rate continues to rise since independence but it is still well short of projected world literacy of about 90% this year. A lot is still desired in educational infrastructure particularly in rural areas. Internet and latest educational technologies and platforms can help in this regard. India's internet penetration is only 20% of the population and the government's digital thrust can boost this number. Expertise from tech giants can be utilized to improve internet access. Moreover the digital strategy will also spur consumption through ecommerce. According to World Bank, at present consumption accounts for 60% of India's GDP, while Wall Street Journal mentioned that only 1% of India's population shops online. Also 80% of India's population lacks means to pay electronically for goods, says Morgan Stanley research report. The report also mentioned that India's internet market could rise to US$ 137 billion by 2020. All these statistics points towards a better scope and opportunities for businesses in a 'Digital India'. Read on...

Fortune: How Silicon Valley can turn India's economy around
Author: S. Kumar

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Mohammad Anas Wahaj | 30 sep 2015

India's Central Statistics Office (CSO) recently revised the methodology to calculate the Gross Domestic Product (GDP). The new growth numbers brought a bit of surprise, both in the local as well as the global economic circles, as they made India the fastest growing economy in the world, beating China to take the top spot. According to recent WSJ survey of US economists, China's GDP figures are often seen with skepticism. But when India Real Time asked about India's official GDP numbers to a group of international economists, they seem generally comfortable with its economic direction, even though they haven't fully figured out the official data. Following are the views of some global economists - (1) Shaily Mittal of MNI Indicators (London): 'Although reliability of data can be questioned to some extent, there is no denying the fact that India seems to be growing at a much healthier pace. Overall we remain positive on India.' (2) Chua Han Teng of BMI Research (Singapore): 'The repeated surprises under the new GDP series for the past two quarters and the subsequent revisions to previous data have given rise to more questions than answers regarding India's economy.' (3) Jeremy Schwartz of WisdomTree (New York): 'Overall there has been a big boost in investor attitudes towards India. Recent changes have helped steer India in the right direction.' (4) Kilbinder Dosanjh of Eurasia Group (London): 'Brazil, Russia and South Africa are virtually in recession. If you look at the components within BRICS, India is actually doing very well regardless of the methodology.' (5) Vishnu Varathan of Mizuho Bank (Singapore): 'GDP numbers probably leave unanswered questions about mis-stated growth. But the broader macro-stability objectives of the RBI dilute the direct risks.' Read on...

The Wall Street Journal: What Do International Economists Really Think of India's Rosy GDP Readings?
Author: Anant Vijay Kala

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Mohammad Anas Wahaj | 12 sep 2015

The recent press release of India's Ministry of Finance states that industrial production, Balance of Payment (BoP) and GDP numbers of Q1 of 2015-16 indicate that the economy is improving steadily and manufacturing sector is gradually emerging as leader of industrial growth. In July 2015 Index of Industrial Production (IIP) grew at 4.2% as compared to 0.9% last year. Manufacturing output in first four months of 2015-16 rose by 4% as compared to 2.8% in same period of 2014. According to Shaktikanta Das, Economic Affairs Secretary of Govt. of India, 'Improvement in IIP data for July is in line with steady improvement in the economic growth...The IIP data for capital goods and manufacturing sectors are noteworthy.' Moreover, the press release also mentions the impressive growth of capital goods (10.6%) and consumer durables (11.4%) sectors. Read on...

The Economic Times: Economy improving & manufacturing sector slowly emerging leader of industrial growth - Finance Ministry
Author: NA

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Mohammad Anas Wahaj | 22 aug 2015

India's agriculture sector becomes important to the economy due to the workforce employed, nearly half of the total, and contribution of 17% to the GDP (Gross Domestic Product). The sector has gone through many transformations - 'Green Revolution' of 1960s, improvement in the yield of wheat with introduction of high yielding varieties and establishment of research facilities and use of better fertilizers and irrigation in the early 1970s, and subsequent transformation in the output of rice due to large-scale use of tube wells, and post-1980s saw the shift in focus towards increasing yields and production of oilseed, fruits and vegetables. During 1960s and 1970s the growth of agriculture was 3-4% while during 1980s it became 5-6%. In 1990s it reached 6-7% but during later part of 1990s and post-2000 it declined to 1-2%. Amit Kapoor and Sankalp Sharma of Institute of Competitiveness in India, explain the various aspects of Indian agriculture and provide recommendations to improve and grow the agricultural economy. According to them government should focus on areas like rural infrastructure, better access to credit and enabling value addition by farmers. They highlight four aspects of Indian agriculture - (1) Overdependence on monsoon for irrigation: There is need for better irrigation policy, utilization of rivers, rural tourism and infrastructure development. (2) Inhibition to technology adoption: Research community has to play a better role in guiding farmers and learning about their challenges and advocate technological solutions. Agricultural policy should make farmers as the focus of every policy action. Farming in India has to move beyond 'subsistence' level. (3) Lack of availability of formal agricultural credit to farmers: Requires better insurance schemes, behavioral interventions to make farmers aware of their decisions, promotion of financial planning, and making farmers feel financially secure and independent. Venture finance can be considered for agricultural producers who want to do value addition for their agricultural produce. (4) Inefficient market conditions: Although government procurement at MSP (Minimum Support Price) is beneficial to farmers but they cannot command the price that they could in a free market. Moreover inefficient storage leads to wastage of produce. Farmers should have the flexibility to sell directly to interested foreign buyers. Read on...

Business Insider: Here's why we need to focus on agriculture in India!
Authors: Amit Kapoor, Sankalp Sharma

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Mohammad Anas Wahaj | 13 mar 2015

'Make in India' concept has the potential to do for manufacturing sector what economic reforms of 1991 did to the information technology industry (IT services & BPO). Jugaad is an inherent Indian trait to find a fix or an instant solution by applying unconventional and non-standard processes. According to Banmali Agrawala, president & CEO of GE South-Asia, 'The Make in India campaign has been getting a lot of jugaad reaction, particularly in the case of capital goods, to raise import barriers and to go around World Trade Organization norms to impose forced localization. Jugaad is at best a stop-gap measure. To move forward, encouraging creativity and innovation at an affordable price point through serious research and development must become the cornerstone of this campaign.' He points out factors that drive global investments in manufacturing, namely domestic demand, skilled workforce and efficient governance. He further explains and analyzes these three factors in Indian context and concludes - India's domestic demand is modest, requires thrust from government spending, support through competitive financing for exports, production efficiencies and quality output at competitive prices; India have skilled workforce but to leverage its full potential needs focus on innovation, research, design, engineering and high end of value-added manufacturing. Indian companies have to invest more in such manufacturing related activities; Although India has strong institutions in place but there is room for improvement in achieving better and efficient governance with transparency and predicability. Read on...

Livemint: Making in India beyond jugaad
Author: Banmali Agrawala

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Mohammad Anas Wahaj | 03 mar 2015

While speaking on 'democracy, inclusion and prosperity', Reserve Bank of India (RBI) governor Raghuram Rajan, said that reforms must focus on creating capacities to provide a strong government instead of creating 'layers' that become obstacles. Mentioning political scientist Francis Fukuyama and his analysis of the emergence of political systems, he said 'Countries would have to strengthen government and regulatory capabilities to remove barriers and push development.' Adding on to the definition of liberal democracies - that are best at fostering political freedoms and economic success and have three important pillars: a strong government, rule of law and democratic accountability - he talked of free markets as the fourth pillar that makes liberal democracies prosper. He also showed concern for the rising inequality of opportunity in industrial countries that threaten these pillars. According to him, India is strong in democratic accountability and somewhat better in terms of rule of law, but it has to go a long way to improve the capacity of the government to deliver governance and public services. Read on...

The Economic Times: Reform to create capacities for strong governance- RBI's Raghuram Rajan
Author: NA

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Mohammad Anas Wahaj | 29 jan 2015

According to World Bank, remittances to India i.e. money transfers by Non-Resident Indians (NRIs) employed outside India (about 14 million Indians) topped the chart and were US$ 71 billion in 2013-14. Promoth Manghat, vice president of global operations at UAE Exchange, says 'Remittances from the UAE to developing countries, including India, increased by 8 to 10 per cent between 2013 and 2014.' Transfer operators cite the stregthening of dollar against Asian currencies as one of the main driver for remittances. According to Sudhesh Giriyan, COO at Xpress Money, their top performing markets are India, Pakistan, Bangladesh and Philippines. Read on...

Gulf News: UAE remittances: Who sends home the most money?
Author: Cleofe Maceda

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