AMITY BUSINESS SCHOOL

Agriculture & Allied Activities: Anchor

to Drowning Economy

By:
Dr. Arun Bhadauria

Dr. Arun Bhadauria

Friday, May 21, 2010 Assistant Professor & Programme Coordinator
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Agribusiness Management
 AMITY BUSINESS SCHOOL

Report
• Goldman Sachs predicts that "from 2007
to 2020, India’s GDP per capita in US$
terms will quadruple", and that the Indian
economy will surpass the United States (in
US$) by 2043.
• In spite of the high growth rate, the report
stated that India would continue to remain
a low-income country for decades to come
but could be a "motor for the world
economy" if it fulfills its growth potential.
Dr. Arun Bhadauria
Friday, May 21, 2010 Assistant Professor & Programme Coordinator
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Agribusiness Management
 AMITY BUSINESS SCHOOL

Goldman Sachs’ 10 Commandments

• GS has outlined 10 things that India needs to do in order to
achieve its potential and grow 40 times by 2050. These are
– improve governance
– raise educational achievement
– increase quality and quantity of universities
– control inflation
– introduce a credible fiscal policy
– liberalize financial markets
– increase trade with neighbours
– increase agricultural productivity
– improve infrastructure and
– improve environmental quality.
Dr. Arun Bhadauria
Friday, May 21, 2010 Assistant Professor & Programme Coordinator
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Agribusiness Management
 Introspection
AMITY BUSINESS SCHOOL

• With dipping agriculture is it really

possible?
• Do the cause and genesis of recession
create a void (though as an opportunity) to
look towards limping agriculture to pull up
the economy out of it?

Dr. Arun Bhadauria

Friday, May 21, 2010 Assistant Professor & Programme Coordinator
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Agribusiness Management
 Reason/ Genesis of Slowdown
AMITY BUSINESS SCHOOL

More Savings & More Exports followed by lesser Imports

Large FOREX Reserve

More Exports followed by less current account

deficit to substantiate the counter surplus

Give rise to investment in foreign economies

creating lending spree (as in US)

More Liquidity without productivity creates

havoc and result in crisis followed by drastic
Weakening the global business as both sides savings, cutting down exports
are trying to save. Result in recession followed
by Depression

Dr. Arun Bhadauria

Friday, May 21, 2010 Assistant Professor & Programme Coordinator
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Agribusiness Management
 Correction within the system
AMITY BUSINESS SCHOOL

To sustain Domestic Saving Spree keep safe Domestic Trade Strength is required to create
distance from global Savings & Investments enough Capital Formation to Counter Global
followed by Optimum FOREX Reserve Economic Crisis.

The said strength may come from any sector of

the economy i.e Agriculture, Industry & Service

Only Agriculture can sustain with or without Global

Support and provide linkages to whole economy. Service Sector more or less depends upon the
Global Outsourcing

Industry too need support from Global Market to

develop strength.

Dr. Arun Bhadauria

Friday, May 21, 2010 Assistant Professor & Programme Coordinator
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Agribusiness Management
 AMITY BUSINESS SCHOOL

How?
• India can grow with intra country trade.
• India cultivate everything.
• India is the significant exporter to NAFTA & EU
(Notes from My Paper on Trade Blocs).
• Agriculture gives an opportunity to Industry to
grow, thereby boosting its export and import
trade statistics, required to give global economy
A Big Push.

Dr. Arun Bhadauria

Friday, May 21, 2010 Assistant Professor & Programme Coordinator
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Agribusiness Management
 AMITY BUSINESS SCHOOL

How?
• Need to harness potential of diversification
in Agriculture.
• Allied Agriculture provide commercially
suitable business opportunities as being
practiced in China & Malaysia.
• IT Sector can grow on the cradle of
development of Agriculture, hardly need
outsourcing to survive.
Dr. Arun Bhadauria
Friday, May 21, 2010 Assistant Professor & Programme Coordinator
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Agribusiness Management
 AMITY BUSINESS SCHOOL

How?
• Growth in this sector will induce the need
of frequent export & import in global trade.
• Savings by one will again become an
investment for other.
• Global Capital Formation will increase.
• FOREX Reserve will not be significant to
be kept in reserve as trade will be through
& among trade blocs, so there will hardly
such a economic slowdown.
Dr. Arun Bhadauria
Friday, May 21, 2010 Assistant Professor & Programme Coordinator
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Agribusiness Management
 AMITY BUSINESS SCHOOL

Why?
• Agriculture still engage more than 60 percent of the
population directly.
• Growth in Agriculture gives real employment to even
those who lies in rest 40 percent.
• Agriculture has huge untapped potential of processing i.e
the processing of fruits and vegetables is estimated to be
around 2.2% of the total production in the country,
buffalo meat is estimated at 21%, poultry is estimated at
6% while marine products are estimated at 8%*. which
can grow to the heights of 80 percent as evident from
Phillipines, Thailand, Malaysia, China and Indonesia (All
Asian Economies)
*MoFPI

Dr. Arun Bhadauria

Friday, May 21, 2010 Assistant Professor & Programme Coordinator
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Agribusiness Management
 AMITY BUSINESS SCHOOL

Dr. Arun Bhadauria

Friday, May 21, 2010 Assistant Professor & Programme Coordinator
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Agribusiness Management
 AMITY BUSINESS SCHOOL

Dr. Arun Bhadauria

Friday, May 21, 2010 Assistant Professor & Programme Coordinator
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Agribusiness Management
 AMITY BUSINESS SCHOOL

When?
• Till the end of the current FYP (11 FYP
2007-2012).
• During this crisis i.e within three years.

Dr. Arun Bhadauria

Friday, May 21, 2010 Assistant Professor & Programme Coordinator
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Agribusiness Management
 AMITY BUSINESS SCHOOL

Where?
• WTO must resolve DOHA Deadlock.
• Modalities should be handled with care of
concern of economic slowdown, which is
dangerous for everyone.
• Trade Blocs will enjoy Tariff Escalation
(Tariff varies as per the stages of
processing) for Agriculture Commodities.
Dr. Arun Bhadauria
Friday, May 21, 2010 Assistant Professor & Programme Coordinator
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Agribusiness Management
 Session Open for discussion
AMITY BUSINESS SCHOOL

• Whether
– Sectors need to be competitive?
– Agriculture to be considered as pivotal sector
for overall development following Doctrine of
Balanced Growth.

Dr. Arun Bhadauria

Friday, May 21, 2010 Assistant Professor & Programme Coordinator
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Agribusiness Management
 AMITY BUSINESS SCHOOL

Grow with Agriculture

Follow guidelines of Nature
Live with Future

Dr. Arun Bhadauria

Friday, May 21, 2010 Assistant Professor & Programme Coordinator
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Agribusiness Management
 Notes & References
AMITY BUSINESS SCHOOL

• Goldman Sachs is a leading global investment banking, securities

and investment management firm that provides a wide range of
services worldwide.
• "India’s Rising Growth Potential" (PDF). Goldman Sachs. 2007.
http://www.usindiafriendship.net/viewpoints1/Indias_Rising_Growth_
Potential.pdf. Retrieved 2009-06-21.
• http://www2.goldmansachs.com/
• Based on the views of Swaminathan Ankelesariya Aiyer, TOI Article
• A report from McKinsey Global Institute asserts that
technological advancement in service sector will lead the
way of development in all the contemporary economic
systems. It is evident from the report that during the
period from 1995 to 2005, service sectors generated all
net job growth in high-income economies and 85 percent
of net new jobs in emerging economies. Report also
suggests that the competitiveness of sectors matters
more than the mix.
Dr. Arun Bhadauria
Friday, May 21, 2010 Assistant Professor & Programme Coordinator
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Agribusiness Management