X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Indian Stock Market News, Equity Market and Sensex Today in India | Equitymaster
Investing in India? Get Equitymaster Research  
The crisis knocking at India's doors 
(Thu, 13 Oct Pre-Open) 
 


Although India has benefited from rapid and substantial economic growth over the past decade, the country remains blighted by poverty and stark income inequalities. The state of India's food security is worsening by the year. The cost of food items is increasing rapidly, making them unaffordable to a majority of the people. Currently food inflation is hovering around the 10% mark. Thus whenever prices of food products increase, the poorest people of the country are the ones who are hit the hardest. While India produces enough food for domestic consumption, the food security situation within India is worsened by significant overpopulation, environmental degradation, political violence and corruption.

According to the International Food Policy Research Institute's (IFPRI) Global Hunger Index (GHI) 2011, India ranks 67 of the 81 countries of the world with the worst food security status. This means that there are only 14 countries in the world whose people have a worse nutritional status. IFPRI has described this situation as alarming. Although India's GHI for 2011 was higher than what it was 15 years ago but still a rank of 67 is below Pakistan, Nepal, Rwanda and Sudan. In fact India is the only country which has shown least improvement in the food security situation over the last 10 years.

There are several factors (both domestic and global) that have contributed to the food crisis. First, there is lack of godowns to store food grains. Second, ineffective public distribution system (PDS) and Third, low food production. Currently only 30% of the food grain is being lifted from the market for PDS. The procurement mechanism also has to be improved. On the global front increasing use of food crops for biofuels, extreme weather conditions, climate change, and increased volume of trading in commodity futures markets have all contributed to higher food prices.

Providing food security to ever growing population is a formidable challenge. The government is hoping to introduce the food security bill in the winter session of Parliament. But not only does the bill have flaws, there is also lack of clarity over who qualifies as poor enough to receive subsidized food grain. Efforts should be made to increase food production and strengthen public distribution system. In India more than 2 m children die of hunger every year. It is high time the government gets proactive in handling this crisis before it gets out of hand.z

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

View all commentaries | Archives  RSS
Read the latest Market Commentary
 
BSE-30
 

 
Go
 

Equitymaster requests your view! Post a comment on "The crisis knocking at India's doors". Click here!

  
 

Become A Smarter Investor In
Just 5 Minutes

Multibagger Stocks Guide 2017
Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
We will never sell or rent your email id.
Please read our Terms

S&P BSE SENSEX


Jul 28, 2017 10:09 AM

MARKET STATS