Will this solve India's food problems?
In this issue:
» Vijay Mallya needs to go
» Low interest rates are hurting savers
» No escaping the slowdown in China's real estate
» Cloud computing to create 2 m jobs in India
» ...and more!
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Thus, one of the ways it proposes to do so is to make private purchases of farmland overseas. In this regard, the agriculture ministry has sought views from other ministries on an institutional mechanism to extend sovereign support to India Inc's acquisition of farm land abroad that could include guaranteed buyback of harvest from the cultivation overseas. And Africa is one such region that the government has set its sight on for cultivating land for the production of pulses and wheat.
Whether this move is enough to ensure food security in India in the longer run remains to be seen. For starters, cultivating land in Africa may not be as easy as it seems on paper. The region is rife with corruption and civil war and buying land could be a process steeped in hurdles. Which is why what the government also needs to do is invest more in agriculture in India so as to improve the productivity of land. Investments in storage facilities and some much needed reforms in agriculture will also go a long way in bolstering agricultural productivity in the longer run.
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Data Source: The Economist |
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Hence a recent article by Capt. Gopinath pointing out what should be done to revive Kingfisher did not surprise us. The former army pilot simply recommends that Kingfisher should get rid of its current owners and management. Removing Mr Mallya from the board and allowing banks to convert their debt into equity seems to be the most certain remedy according to him. That the business of aviation is not inherently profitable is known. However, running it smartly could have its benefits.
Do you agree with Capt. Gopinath's view that Mr Vijay Mallya should be removed from Kingfisher Airlines? Share your comments with us or post your views on our Facebook page / Google+ page.
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In order to bring about an economic recovery and ensure job creation, the US Fed has promised to keep interest rates near zero for the next couple of years. And this is really hurting the savers. For the Fed determined interest rate is not even keeping up with the rise in cost of living.
To make matters worse, Bill Gross, one of the world's most respected bond fund managers is of the view that interest rates would remain artificially low for more than a decade. Clearly, this is nothing but economics turning on its head. Never before has the encouragement to spend and discouragement to save been so higher than the current times. And the longer this lasts, the heavier the price to pay would be we believe.
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Financial inclusion is one of the main aims of the government. A large portion of India's population remains unbanked and without access to credit. In light of this, domestic banks have to lend at least 40% of their loan book to the priority sector. This includes sectors like agriculture, small scale industries, microfinance etc. If banks are unable to meet these steep targets, they have to invest in low yielding Rural Infrastructure Development Fund (RIDF) bonds. Or they can try and meet their targets by investing in securitized assets of their NBFC peers. But rather than just meeting targets, our hope is that banks will work harder on actually uplifting the weaker sections of our country. This will be more beneficial for the country in the long run.
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To avert any such crisis, the Chinese government announced a massive affordable housing scheme. As the larger real estate sector slows down, the government is hoping that this scheme would keep the sector afloat. And also keep the demand for commodities like cement, steel and metals buoyant. But as it seems, much of the scheme is mere propaganda. And though the government has made sky high projections, not much is expected to materialise in reality. It seems like there is no escaping the slowdown in Chinese real estate.
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13 Responses to "Will this solve India's food problems?"
Tukaram Shetty
Mar 6, 2012Capt Gopinath is short sighted in saying that Banks must convert the debt into equity and run the Airline business.
The Banks main purpose is collect deposit and pay loan to public and entrepreneur and earn income out of interest difference and other source of income. If Banks run all loss making business by converting the loan into equity, they may have to run to hill top when they loose money. They only have to recover what ever left out of loosing business and write off remaining non performing asset.
Apart from this Airline business is most unreliable business all over the world as per the statistics.
Narendra Tiwari
Mar 6, 2012Mr.Vijay Mallya should be given chance to clear kingFisher Dues out of his personal other assets otherwise Capt.Gopinath is very right in his view.
Ramanand
Mar 6, 2012Is Fiat Money really a curse? Please think for a few minutes more...
Governments historically have sought power along with its use and abuse. All forms of governments, whether Monarchy, Dictatorial, or Democratic survive only if they are able to acquire and exercise power.
Now all of us know that Power exists in 3 forms...violence, wealth, and knowledge. And historically, over Agrarian and Industrial times, Govts have relied on Violence and Wealth as their source of power (think of it as Power shifting from mostly Violence to Wealth and in modern times to Knowledge).
Now, Inflation, which is only possible with Fiat currency, is merely the mechanism of govt to exercise and retain power. In absence of Fiat currency and a return to Gold Money, any idea how Govt will retain and exercise its power? Why it will revert to violence of course!
So think again...Fiat currency is one of the most humane things to have happened...allowing Govts to steal my money over long term instead of banging into my house, killing me, and then taking my money. Please remove the thought out of your head that you can prevent Govt from stealing your money. You only have the choice of HOW you let Govt do it!