FDI is a new age investment strategy which have its added and advantages, but some ill effects may also follow it. In this presentation FDI has been favored in the hope that FDI can be an effective tool to solve the problems in agricultural sector for country specially like India .

1. PRESENTED BY:
SIDDHARTH MISHRA
RESEARCH SCHOLAR,
DAV PG COLLEGE, VARANASI

2. 
To
increase stock of
capital and acquire competitive
technologies;

To be enabled in hiring best human resources who can make
best utilization of capital and technologies;

To have strong financial resources ;
………etc.
FDI, AS AN INVESTMENT, STRENGTHENS AND FORCES AN ECONOMY
TO DEVELOP.
FDI IS NOT ANY SOURCE OF TRANSFER INCOME.

3. 
As per statistics given by Department of Industrial Policy and
Promotion (DIPP), Indian corporate sector have witness an upward
trend in FDI. FDI. In April- May 2013, was US$ 3.95 Billion, which
was an increase of around 24.2% from the FDI of US$ 3 Billion in
April- May 2012.

Private equity (PE) and Venture capital (VC) firms remained bullish
about India’s consumer goods and service sector. These investments
increased by more than 46% in the 1st half of financial year 2013-14,
with consumer companies in retail, e-commerce, consumer packaged
goods and quick service restaurants raising US$ 609.39 million through
51 deals.
………….continued

4. 
In the first 9 months of 2013 there were 377 deals, relating to mergers
and acquisitions, amounting to US$ 23.9 billion (according to a survey
by tax advisory firm Grant Thornton).

Forex reserves of India increased by US$ 1.51 billion to touch US$
279.24 billion for the week ended October 11, 2013 (as shown by
report of RBI’s weekly statistical supplement). India’s foreign currency
assets (FCA), the biggest component of the forex reserves, increased by
US$ 1.52 billion to US$ 250.85 billion for the week under review.

5. 
SCA, the Swedish company (deals in hygiene and forest products), will be
setting up a manufacturing plant in India with an investment of about US$
23.66 million which is expected to be operational by 2015.

DIPP is learnt to have granted approval to Hennes & Mauritz AB’s US$
114.24 million investment proposal for the single –brand retail market..
The Cabinet Committee on Economic Affairs (CCEA) had cleared
furniture –maker Ikea’s US$ 1.71 billion earlier in 2013.

UK based bank Williams & Glyn’s, which is a part of the Royal Bank of
Scotland (RBS) Group, has inked US$ 413.71 million deal with IBM and
Infosys wherein the Indian IT majors will build a new technology system
for Williams & Glyn’s.
………….etc

6. Agriculture, and its allied services, has substantial part in India’s national
income, since independence, and major job providing sector (almost
50% of the population). This sector contributes a major share in
country’s GDP.
IT MAY BE SAID THAT “AGRICULTURE FROM INDIA AND
INDIA FOR AGRICULTURE”, AS AGRICULTURE FORMS AN
IMPORTANT IDENTITY FOR INDIA.
This sector contributes a major portion in country’s GDP. This can be
observed from following tables (table A & B)

7. Financial
Year
1951-52
Gross Domestic
Product (in Rs. Cr)
at 2004-05 Prices
2,86,147 (100)
Agriculture & Allied Agriculture (in Rs.
Services (in Rs. Cr) Cr) at 2004-05 Prices
at 2004-05 Prices
1,47,216 (51.45)
1,18,877(41.54)
1952-53
2,94,267 (100)
1,51,859 (51.61)
1,23,822 (42.08)
1953-54
3,12,177 (100)
1,63,553 (52.39)
1,34,958 (43.23)
1954-55
3,25,431 (100)
1,68,361 (51.73)
1,38,731 (42.63)
1955-56
3,33,766 (100)
1,66,906 (50.01)
1,36,679 (40.95)
1956-57
3,52,766 (100)
1,75,980 (49.89)
1,44,859 (41.06)
1957-58
3,48,500 (100)
1,68,075 (48.23)
1,37,497 (39.45)
1958-59
3,74,948 (100)
1,85,010 (49.34)
1,52,961(40.80)
1959-60
3,83,153 (100)
1,83,147 (47.80)
1,50,730 (39.34)
1960-61
4,10,279 (100)
1,95,482 (46.25)
1,61,708 (39.41)
1961-62
4,23,011(100)
1,95,482 (47.80)
1,61,187 (38.10)
FIGURES IN BRACKET REPRESENT THE PERCENTAGE AS
COMPARED TO GDP
TABLE A: SHARE OF AGRICULTURE AND ALLIED SERVICES IN
INDIA’S GDP (FROM 1951-52 TO 1961-62)

8. Financial
Year
2001-02
Gross Domestic
Product (in Rs. Cr)
at 2004-05 Prices
24,72,052 (100)
Agriculture & Allied Agriculture (in Rs.
Services (in Rs. Cr) Cr) at 2004-05 Prices
at 2004-05 Prices
5,54,157 (22.42)
4,67,815 (18.92)
2002-03
25,70,690 (100)
5,17,559(20.13)
4,29,752(16.72)
2003-04
27,77,813 (100)
5,64,391(20.32)
4,76,324(17.15)
2004-05
29,71,464 (100)
5,65,426(19.03)
4,76,634(16.04)
2005-06
32,53,073 (100)
5,94,487(18.27)
5,02,996(15.46)
2006-07
35,64,364 (100)
6.19,190(17.37)
5,23,745(14.69)
2007-08
38,96,636 (100)
6,55,080(16.81)
5,56,956(14.29)
2008-09
41,58,676 (100)
6,55,689(15.77)
5,55,442(13.36)
2009-10
45,16,071 (100)
6,60,987(14.64)
5,57,715(12.35)
2010-11
49,97,006 (100)
7,13,477(14.45)
6,06,848(12.29)
2011-12
52,43,582 (100)
7,39,495(14.10)
6,30,540(12.02)
FIGURES IN BRACKET REPRESENT THE PERCENTAGE AS
COMPARED TO GDP
TABLE B: SHARE OF AGRICULTURE AND ALLIED SERVICES IN
INDIA’S GDP (FROM 2001-02 TO 2011-12)

9. Agriculture sector has good relations with retail trading
activities and also contribute to the exports (table C).
A large variety of agro based products constitutes a major
portion of stock in the inventory of retail traders (as categorized
in edibles, food products and also in FMCG etc.) where the
retailer is small one, the small shops in the locality. Or the or at
big players such as Reliance Fresh, Sahara Q shop, Subhiksha,
Spancers, Big Bazar, Amul etc

10. TABLE C: SHARE OF AGRICULTURE AND ALLIED PRODUCT IN
EXPORT
Financial
Year
Total Export (in US$
million)
103090.5
Export of Agriculture
and Allied Products
(in US$ million)
10213.8
Share of Agriculture
and Allied Products in
Total Export (%age)
9.90
2005-06
2006-07
126414.1
12683.4
10.03
2007-08
162904.3
18432.1
11.31
2008-09
185295.0
17534.9
9.46
2009-10
178571.4
17734.1
9.93
2010-11
251136.2
24207.6
.9.63
2011-12
305963.9
37473.3
12.24
2012-13
300570.6
40641.5
13.52

11. Agriculture sector has a good sharing in India’s GDP in various
timer period (where it was 5th decade of 20th century or during 1st
decade of 21st century). But the share of
this sector has been
continuously declining because of heavy investments that are being
made in industrial sector and services sector as, comparatively, fast
and big profits which results from these (industry and service)
sectors have attracted the capital investors and labour forces of the
country. Beside being an agrarian economy, India also needs to
import several bulk consumption goods (cereals and cereal
preparations, edible oils, pulses and sugar etc) to fulfil the demand
of the population (table D).

12. Table D: Share of Bulk Consumption Goods in Import
Financial
Year
Total Imports (in US$
million)
149166.0
Imports of Bulk
Consumption
Products (in US$
million)
2766.6
Share of Bulk
Consumption
Products in Total
Imports (%age)
1.85
2005-06
2006-07
185735.2
4294.1
2.31
2007-08
251439.2
4600.3
1.82
2008-09
303696.3
4975.3
1.63
2009-10
288372.9
9012.7
3.12
2010-11
369769.1
8854.8
2.39
2011-12
489319.5
11654.7
2.38
2012-13
491487.2
14219.7
2.89

13. FDI IN AGRICULTURAL SECTOR
In India (with effect from 5th April, 2013) FDI is permitted, in order to promote private
sector participation, in agriculture sector is permitted, through automatic route up to 100% in
the following works:
Development and production of seeds and
planting material.
Services related to agro and allied sectors.
……..continued

14. Animal
husbandry
Pisciculture Aquaculture
Cultivation
vegetables
mushrooms
of
&
UNDER CONTROLLED CONDITIONS
Floriculture Horticulture Apiculture

15. EXPECTED
BENEFITS
OF
FDI
IN
AGRICULTURE
SECTOR:
Population over 120 crores will always needs:
 Food ; &
Income earning opportunities.
Agriculture is old and most important practiced profession of the country. A
large workforce is skilled enough to practice agriculture.
But both, the workforce and investor,
in huge numbers, are showing
disinterest in giving their contribution to this sector, as eagerness is shown
towards industrial and service sector.
………..…continued

16. It is also true that a big part of country’s land (including cultivable) is being
taken over industrial sector, year by year, in order to utilise and flourish the
investments made in industrial sector.
Home country’s investor and intellectuals do not care more about agriculture
sector and hence the sector lack:
 Financial assistance (For e.g. credit and banking services etc)
Technical assistance (For e.g. irrigation and techniques such as multi crop
farming etc); &
 Marketing assistance (Indian farmers are good producers but not good
marketers).

17. So, FDI can be better way to finance the agriculture sector and gain more
investment injected, especially through private sector. Some of the benefits
which FDI can provide are:
FDI is expected to greatly benefit Indian farmers as a majority of them
engage in small scale businesses and earn less profit;
FDI can be used to propagate agriculture R&D, develop technologies for
energy savings, and protect the environment, which could help increase
yield.
FDI along with the domestic corporate effort and investment can resolve
back end issues related to modernising agricultural markets (12th Five Year
Plan) FDI has an added potential to link farmers to wider markets by
expanding export
………….continued

18. It is also not such that , in the area of agriculture, wherein, FDI is permitted,
India is not having any good standing in home or at global level. In fact, India
do hold an important position in producing those commodities, and FDI will
increase the exiting strength and provide good returns to the investors, for
example:
As per the Indian Horticulture Database (2010) given by National
Horticulture Board (GOI), the export of output of horticulture sector have
been showing increasing trend. India was the second largest producer (next to
China) of the fruits in the world during 2009-10.
……..continued

19. The importance of apiculture (bee-keeping) has been explained by Director
of General of Employment and Training, Ministry of labour and Employment
(GOI), in course curricula for modular employable skills, as India produces
about 70,000 tonnes of honey every year of which 25-27,000 tonnes is
exported to more than 42 countries.
Even Indian flowers for example Dutch roses, are also demanded by many
countries including European countries & Japan. Bangalore is considered as
export hub with much export oriented units in nearby regions.
There are lots of such example regarding Indian agriculture (both- traditionally
practiced and modern practices).

20. To solve the problem related to finance, technology and marketing
skills, the injections of more investment through FDI, in agriculture
sector will be of great help. And profit resultant by these investments
can attract the Indian investor (who are able to invest presently, but
hesitates to invest, and also the prospective investors) to think
seriously about investing in the agriculture sector and let India be
remain proud on being an agrarian economy.

21. THANK YOU FOR
HEARING
&
SORRY
FOR MISTAKES