11th plan focused on education and skill development

Business and economic trends in India

The 11th plan recognises the need for skill development. The RBI has expressed concern about the fiscal deficit of India, terming it as one of the highest in the world. Such a high deficit obviously creates an underlying inflationary pressure that aids and abets the actual headline inflation.

- Chillibreeze Business Research Team

Government Policy & Infrastructure
Economy
Sector Specific – Telecom
Banking & Finance
Power
Steel
Cement
International
Agriculture

Government policy & Infrastructure

Emphasis on education and skill development under 11th plan

The Centre has put emphasis on education and skill development and absorption of skilled manpower in the 11th five-year plan.

"The government in the plan period has put focus on education, like setting up of 39 central universities, eight IITs, seven management institutes and seven institutes for science and revamping ITIs for technical workforce," External Affairs minister Pranab Mukherjee said here today.

Addressing members of National Institute of Personnel Management, he said absorption of skilled manpower was also necessary, otherwise it would give birth to social unrest as seen in the 60s and the 70s.

Mukherjee said that the combined state and Centre's allocation in education had come close to six per cent of GDP now. He said the young population was an asset which needed to be utilised properly to stimulate sustainable economic growth to meet the global manpower shortage.

Mukherjee stressed on the need for healthy public private partnership to push the economic growth. Allaying fear of a food crisis, he said that the country was now producing 223 million tonne of food grain. He expressed hope that India would not only produce its own, but also for others

May 24th, 2008
Source: Economic Times

Bangalore may have two airports

While the new airport at Devanahalli is set for opening on May 24, the issue of reopening the existing HAL airport at a later date to handle commercial flights is also being examined.

The Ministry of Civil Aviation is seeking legal opinion and looking at what contractual obligations there might be if the HAL airport is kept open for commercial operations after the new airport opens. No date has been fixed nor a final decision taken on keeping HAL airport open, officials said.

The issue of keeping HAL airport open even after the new airport becomes operational has become contentious as the agreement signed with the promoters states that the existing airport will close when Devanahalli starts functioning.

The Minister for Civil Aviation, Mr Praful Patel, told Business Line that among other issues, keeping the HAL airport open should be viewed as an infrastructure issue. “The country requires infrastructure and we need to explore all avenues to increase its availability,” he said.

At the same time, in Bangalore, the promoters of the project showed the first signs of softening their stand. “For the time being, the HAL airport would be shut for all commercial operations. But the HAL chapter has not been closed,” said the Chief Executive Officer, Bangalore International Airport Ltd, Mr Albert Brunner.
The Principal Secretary, Karnataka Infrastructure Development Department, Mr V.P. Baligar, added that re-negotiation talks were still on with BIAL.

“After two rounds of negotiations, we have not been able to come to an amicable conclusion on the issue. No date has been fixed but we will have to inform the Supreme Court of an option by mid-June,” he said.

So far, the State Government, the Ministry of Civil Aviation and BIAL have had broad discussions on the “parameters and possibilities” of operating short-haul flights from the HAL airport while long-haul and international flights will land at the new airport, officials indicated.
A revenue share model has also been suggested, he said.

“We will have to see if there are any capacity constraints at the new airport and then decide on whether HAL should also be kept open,” said Mr Baligar.

The demand for keeping both the airports open has come from several quarters, including citizen groups and Parliamentarians.

May 23th, 2008
Source: The Hindu Businessline

Debt waiver for farmers hiked to Rs 71,680 cr

The government on Friday hiked the provisions for debt waiver for farmers by a hefty about 20 per cent to Rs 71,680 crore, a move that would enlarge the scope for relief for peasants.
The decision to increase the debt waiver amount from Rs 60,000 crore, announced in the Union Budget for 2008-09, was taken at the meeting of the Cabinet presided over by Prime Minister Manmohan Singh.
Congress General Secretary Rahul Gandhi has been suggesting enlargement of the scheme to include more farmers.

May 23rd, 2008
Source: Indian Express

Rs 10,328 crore to develop infrastructure in elite institutes

With the Supreme Court removing roadblocks to OBC reservation in institutes of higher learning last month, the Cabinet Committee of Economic Affairs on Thursday approved Rs 10,328 crore for 54 per cent capacity expansion in the elite institutes to accommodate an additional intake of students from 2008-09 academic session. The fund is required to develop infrastructure in these institutions, as the Government has promised to accommodate the OBC quota in a manner that would not affect the intake of other category candidates.
“The fund for the capacity expansion will be incurred during the plan period. This support was required for the capacity expansion to accommodate an additional intake of candidates in the wake of OBC reservation, without affecting the intake of other category candidates,” said Finance Minister P Chidambaram, announcing the decision after the meeting of CCEA, chaired by Prime Minister Manmohan Singh.
Finance Minister informed that a little over Rs 4,000 crore of the total outlay will be part of the recurring expenditure, while the remaining part of the outlay would be spent on non-recurring expenses.
The financial approval is part of the plan envisaged by the Government last year itself, when it had planned to introduce the OBC quota by expanding the capacity of institution for additional intake without impacting the seats for the other candidates.

May 23rd, 2008
Source: Indian Express

Economy

Fiscal pressures not fully reflected: RBI

India's fiscal deficit continues to be among the highest in the world and underlying pressures are not entirely showing up in headline fiscal numbers, RBI governor said on Monday.

"We are seeing the centre's fiscal situation is improving but I think there are several underlying fiscal pressures not entirely evident in the numbers," Reserve Bank of India Governor Yaga Venugopal Reddy told a conference in New Delhi.

India aims to bring down its fiscal deficit to 2.5 percent of GDP for the 2008/09 financial year, compared to 3.1 percent in 2007/08, but analysts fear a $17 billion scheme to write off the debts of millions of small farmers and tax cuts could trip up efforts. According to the Fiscal Responsibility and the Budget Management Act operationalised in 2004/05, the government must reduce its fiscal deficit to 3 pct of GDP and wipe out its revenue deficit by 2008/09.

But it has already missed its revenue deficit target and expects it to be 1 percent of GDP in the year to end March 2009.

Reddy said the fiscal deficit as a percentage of gross domestic product continues to be among the highest in the world.

Market borrowings finance more than half of the gross fiscal deficit and the rest of the gap is filled by small savings, provident funds, reserve funds and deposits and advances.

The gross fiscal deficit covering both state and central government is estimated at 5.5 percent in 2007/08, according to official estimates, down from 9.5 percent in 2002/03.

May 26th, 2008
Source: Economic Times

Mizoram to set up northeast India's first SEZ

Mizoram will set up northeast India's first Special Economic Zone (SEZ).

"We have already started the process to establish the SEZ at Khawnuam village in Champhai district bordering Myanmar," said Chief Minister Zoramthanga.

"We have urged the North Eastern Council (NEC) to sanction Rs.91.3 million to build the necessary infrastructure to set up the SEZ in the eastern part of the state, which shares borders with Bangladesh besides Myanmar," Zoramthanga told IANS.

He has discussed the matter with Minister for Development of the North Eastern Region (DoNER) Mani Shankar Aiyar.

"The DoNER minister gave us a positive response and he would take up the matter with the union finance and industry ministries too," he added.

He said: "The proposed SEZ, for which a detailed project report (DPR) has already been submitted to the NEC, would go a long way in boosting employment, trade and economy and to use the state's vast agricultural and horticultural resources effectively."
Bamboo-based industries are expected to play a big role in the proposed SEZ. The Confederation of Indian Industry (CII) has estimated that Mizoram, with an area of 21,090 sq. km, has 20 bamboo species in groves covering 1,254,400 ha, contributing 14 percent of all the bamboo produced in India.

The state government had earlier signed an agreement with a Bangladeshi paper manufacturer (Nitoy-Niloy paper and pulp industry near Dhaka) to supply bamboo chips for their factory. These bamboo chips would be exported through the Sutarkandhi areas of Karimganj in southern Assam

May 25th, 2008
Source: Hindustan Times

Forex reserves rise by over $1 b

The country’s foreign exchange reserves increased by $1.381 billion to touch $314.081 billion for the week ended May 16, 2008, according to the RBI’s Weekly Statistical Supplement.

This is the second week in a row that forex reserves have increased. In the previous week, the reserves had increased by $200 million to $312.7 billion.

During the week under review, foreign currency assets increased by $1.342 billion to $304.118 billion, primarily due to a currency revaluation effect. The dollar was steady to weak, against the euro, during that week.

May 24th, 2008
Source: The Hindu Businessline

Chinese tyre imports surge despite dumping duty

The anti-dumping ruling on the imports of truck and bus tyres in July 2007 does not seem to have reduced the share of Chinese tyres in the domestic replacement market, as the price difference in the product made in the two countries continues to be in the range of 10-30 per cent.

The import of commercial vehicles tyres surged in the last five years, with the Chinese tyres constituting 91 per cent of the overall tyres brought into the country, according to the data from the Directorate General of Commercial intelligence and Statistics till September 2007 and the estimated data by the Automotive Tyre Manufacturers Association (ATMA) till March 2008.
ATMA reckons that the share of Chinese tyres in the domestic replacement market has risen from 0.3 per cent in 2002-03 to 14 per cent as on the year ended March 31, 2008.
Bias tyres are of lower quality, can withstand overloading pressure and are priced lower compared with radials which are of superior quality and priced higher. But due to the road conditions here, most companies are producing bias tyres which can survive in all conditions.

“The rising import of commercial vehicle tyres clearly demonstrates that the anti-dumping duty has been ineffective. Despite the ruling, which increased the anti-dumping duty to $135 from $75, price differences in the domestic and Chinese replacement market is in the range of 10-30 per cent,” said Mr Rajeev Buddhiraja, Director General, ATMA.

May 24th, 2008
Source: The Hindu Businessline

Consumers face more heat than WPI suggests

Even as the wholesale price inflation has risen to above 7 per cent after three-and-a-half years, the inflation faced by consumers has averaged higher than this level for over two years now.

While India uses the wholesale price index (WPI) to measure headline inflation, most countries in the world use a unified consumer price index (CPI). The CPI is considered a better measure of inflation faced by a household as it reflects prices of commodities at the retail level whereas the WPI measures changes at the wholesale level.

The average inflation rate in 2007-08 for agricultural labourers, measured by the CPI-AL, stood at 7.5 per cent. The index for rural labourers, CPI-RL, averaged 7.2 per cent during the year.

The index for industrial workers, CPI-IW, and urban non-manual employees, CPI-UNME, also averaged well above 6 per cent during the year. In 2006-07 too, consumer price inflation for agricultural labourers and rural labourers was above 7 per cent.

The commodity composition of the four indices varies significantly. The CPI-AL, for example, gives the highest weight to food items. "The data show that poor people are facing relatively higher inflation. It may be because of higher food prices in recent years.

However, economists say consumer price indices have limited uses as the commodity baskets used have outlived their utility and are essentially meant to determine wages. "None of the measures of inflation are adequate. High revisions in provisional inflation numbers also put a big question mark on the data collection system," Joshi added.

May 24th, 2008
Source: Business Standard

Inflation static at 7.82%

Inflation remained little changed at 7.82 per cent for the week ended May 10 in the face of surging international crude oil prices, even as the government battles the menace on various fronts.

The rate of rising prices was much higher at over eight per cent even as of March 15, a period for which the government now released final inflation figures.
According to the updated figure, inflation stood at 8.02 per cent for the week ended March 15 against the provisional 6.68 per cent. The inflation was 7.82 per cent for the week ended May 10 as compared to 7.83 per cent for the previous week, said the of ficial figures released on Friday.

During the corresponding week a year ago, the inflation stood at 5.62 per cent. Amid speculation of rise in prices of petroleum products, inflation is likely to remain high for the next 3-4 months, while the Reserve Bank and government may have to take additional monetary and fiscal measures, said analysts
“As it stands now, for another 3-4 months inflation will remain high even though it would show a tendency to decline at around 6 per cent. Inflation may reach even 5.5 per cent by end of this fiscal,” said the PM's Economic Advisory Council Chairman Dr C Rangarajan.

Industrial fuel prices, which are linked to international crude oil prices that crossed $135 a barrel, rose with aviation turbine fuel rates alone surging by 10 per cent. Fuel, power, light and lubricants index as a whole went up by 0.1 per cent during the week under review.

May 23rd, 2008
Source: The Hindu Businessline

India may face global pressure to cut oil subsidies

Economic sense will likely pressure the Indian government to raise the prices of petroleum products, with crude oil touching a record high of $135 per barrel. This, even though inflation is at a high of 8.02 percent, revised upward for the week ended March 15.

The increase in fuel prices is necessitated by the mounting subsidy losses plaguing the state-owned oil marketing companies. India's oil basket is now $125 per barrel.

However, Petroleum Secretary MS Srinivasan said the Cabinet scheduled today may not consider raising fuel prices as the subject needed some more preparation, but decide on the quantum of rise. “We expect a decision in 3-4 days.”

The ministry is considering a price hike and duty cut to lower the projected Rs 2,00,000 crore under-realisation on sale of petrol, diesel, LPG and kerosene. It is said to be seeking Rs 10 per litre increase in petrol and Rs 5 a litre hike in diesel prices.

The ministry is also seeking lowering of customs duty on crude from 5 per cent to zero and import duty on petrol and diesel from 7.5 per cent to 2.5 per cent, besides a cut in excise duty.

The government may also come under pressure from the Group of seven nations, who are blaming India and China for the high demand and to the subsidized oil prices. They may put political pressure to abolish the oil subsidies.

May 23rd, 2008
Source: Economic Times

Sector Specific

Telecom

3G services launch by early next year likely

The much-delayed third generation mobile services will probably be available to consumers only by early next year.

The Communications and IT Minister, Mr A. Raja, on Friday said that the final guidelines for 3G (third generation) mobile services will be announced by June after consulting the Law Ministry and the Prime Minister. While the Law Ministry’s help has been sought to finalise the modalities of auctioning spectrum, Mr Raja will meet the Prime Minister to take a decision on whether to restrict the auction to existing licensed operators.

Once the policy is finalised, the operators who win the auction will take at least six months to roll out the facility that promises to improve quality of mobile services apart from enabling high speed Internet access on handsets.
Speaking at the Global Telecom Summit organised by Assocham, Mr Raja said that his Ministry was currently engaged in preparing detailed guidelines that would lay out a time schedule for execution of 3G technologies under the UPA Government’s regime. While the telecom regulator had given its recommendation on introducing 3G services in 2006, the Government has been pushing back the date for launching the services because of differences between various departments on policy related issues. One such issue is that of allowing foreign players to participate in the 3G auction.

While DoT is in favour of allowing new and foreign players to bid for spectrum, the telecom regulator suggested that it be restricted to existing licence holders on the grounds that they would be better positioned to roll out 3G services.

May 24th, 2008
Source: The Hindu Businessline

Telecom sector to garner $35 bn by 2010

The telecom sector is likely to achieve revenues to the tune of $35 billion by 2010 even though its profit margins have been declining, a study said.
A joint study by industry body Assocham and international accounting firm PricewaterhouseCoopers said India's telecom sector has grown rapidly in the last few years and has clocked revenues of over $22 billion in FY07.

The country is poised to nearly double its subscriber base to 500 million by 2010, it said.
At present, India is the second largest wireless market in the world with the subscriber base of nearly 250 million.

The study stated that during the 11th Plan Period the sector would attract investment to the tune of 76.6 billion.

With the rollout of the 3G services the sector would get further boost as it would make high speed data transfers possible, it added.

To support the growing subscriber base the country need 35,00,000 telecom towers by 2010, against 125,000 in 2007, telecom watchdog Trai said.

The study also pointed out that despite the sector moving into the high growth trajectory, it is still faced with certain challenges such as low tele-density in the rural areas, limited bandwidth and infrastructure and others.

May 23rd, 2008
Source: Business Standard

Power

R-Power project to get commissioned by 2013

The 4000 Mw each Ultra Mega Power Projects (UMPP) being set up at Sasan in Madhya Pradesh by the Anil Ambani Group promoted Reliance Power and at Mundra in Gujarat by Tata Power Company (TPC) are likely to be fully commissioned by 2013.

Reliance Power has committed to the Union Ministry of Power and the Central Electricity Authority (CEA) to advance the commissioning schedule of Sasan UMPP by three years, at a review meeting on UMPPs held in New Delhi, last week, said sources.
The project, with captive coal mines, was scheduled to be commissioned between May 2013 and April 2016 as per the Power Purchase Agreement (PPA).

Informed sources said Reliance Power was close to announce details on service contractors for the project and was gearing up for financial closure by October, this year.
Tata Power had achieved financial closure for the Mundra project during the last month. The first of Mundra's six units are likely to be commissioned by September 2011 and the entire project is slated to take off by March 2013.

Tata Power's Mundra UMPP is also ahead of earlier schedule by 11 months for the first unit and by 17 months for the project commissioning, said sources. 
Reliance Power has committed the government to advance the commissioning of its first unit by 16 months to December 2011, as against May 2013 as per the PPA. The second unit will come after three months in March 2012. In total, 1320 Mw would be commissioned in 11th five year plan itself, said sources.

India is planning to add 78,000 Mw of power in the 11th five year plan and 4000 Mw each eight to nine UMPPs are likely to come up in different parts of the country. So far three UMPPs at Mundra (Tata Power), Sasan and Krishnapatanam (Reliance Power) have been awarded based on competitive bidding.

May 23rd, 2008
Source: Business Standard

Banking & Finance

SBI`s U-turn on farm loan freeze at FM`s behest

Finance Minister P Chidambaram, who personally intervened to force the State Bank of India to withdraw the controversial circular freezing farm equipment financing, said the instructions were unjustified and poorly worded.

"The SBI circular was poorly worded and created lot of confusion. I asked the secretary (financial sector) to advise the bank. The secretary did so and the bank accordingly withdrew the circular," Chidambaram told reporters after a cabinet meeting.

SBI withdrew its circular within two days, on Wednesday, saying its move was misunderstood. While the bank's executives denied receiving any instructions from the government, the Finance Minister's statement gave a new twist to the controversy.

"Non-performing assets (NPAs) are part of the banking system. Loans must be given and recovered .... There are many ways to recover loans. However, the circular was not justified," Chidambaram said.

While NPAs constitute about 7 per cent of SBI's farm loan portfolio of Rs 43,000 crore, 17 per cent of the Rs 7,000 crore farm equipment loan portfolio is classified under the category.

May 23rd, 2008
Source: Business Standard

Steel

Govt mulls steel duty rollback

Making it clear that lowering of prices by steel makers was unconditional, the Steel Ministry today said their demand on rolling back the duty imposed on steel export was being considered by the government.

During their meeting with the Prime Minister recently, producers offered to lower the flat products by Rs 4,000 but sought rollback of export duty. Industry sources said that the steel companies together took a hit of about Rs 10,000 crores on their bottomline owing to the duty. The industry has also promised to restrict export at the existing level and the government is monitoring the situation closely, Paswan said.
Steel Secretary, Raghav Sharan Pandey told The Indian Express that the ministry’s “attitude on the issue is positive” and that the situation is being regularly monitored. He pointed out that the ministry has already taken up the issue of seeking exemption of export duty on those products for which raw materials have been imported.
But Pandey made it clear that the cut in prices announced by the steel producers was purely unconditional and it is not linked with acceptance of their demands. Expressing concern that steel prices were contributing to over 21 per cent to the overall inflation, the government had imposed up to 15 per cent export duty on the metal, which the industry had opposed saying it could spell the doom for it.

The prime reason for the growing demand-supply mismatch of the alloy, is the slow growth in production despite the country’s steel plants operating at more than 100 per cent of their capacity. “Our growth rate is 6.5 per cent whereas consumption has reached 13 per cent,” Paswan said.

May 24th, 2008
Source: Indian Express

Cement

Gujarat cement firms may cut capacity utilisation

Gujarat-based cement manufacturers may lower their capacity utilisation as the export ban last month has led to a situation of oversupply.

The production of cement is likely to be brought down in the wake of inadequate logistics for transporting the output to neighbouring states and inability of Gujarat to absorb the yield.

A top executive in the Cement Manufacturers' Association (CMA), said, "The oversupply situation in Gujarat (the foremost state in cement exports) will sharply erode the profitability of cement companies. Some cuts could follow in their capacity utilisation."
The country exported 3.65 million tonnes of cement and 2.37 million tonnes of clinker in 2007-08, with Gujarat accounting for over 90 per cent. Industry analysts said that the state is facing the immediate impact of export ban and there could soon be a marginal decrease in utilisation by around 3-4 per cent.

Ambuja Cements, the country's second largest cement maker after ACC, produced over one-fourth (4.8 million tonnes) of its annual cement production (16.9 million tonnes) from its Ambujanagar plant (one of the largest cement unit in the country) in Gujarat in 2007. UltraTech, Saurashtra Cement, Gujarat Sidhee Cement and Sanghi Industries are the other cement manufacturers in Gujarat.

Gujarat's consumption of cement is 24 per cent less than its overall production. It consumed 11.67 million tonnes of cement in 2007-08 against a production of 15.39 million tonnes. The remaining component was exported.

According to market sources, due to new capacity additions by Grasim and Shree Cement in the north, the north-based players too could go for a decline in capacity utlisation.
The domestic cement industry added 23 million tonnes of fresh capacities in FY08, taking its overall installed capacity to 189 million tonnes from 166.73 million tonnes last year.

May 23rd, 2008
Source: Business Standard

International

India signs investment protection pact with Brunei

India has signed a bilateral investment promotion and protection agreement (BIPA) with Brunei Darussalam here on Thursday.

While the Union Finance Minister Mr P. Chidambaram signed the agreement on behalf of India, Mr Pehin Dato Rahman Ibrahim, Minister of Finance, Brunei signed it from Brunei Darussalam’s side.

On the occasion, Mr Chidambaram said that Brunei becomes the 70th country with whom India has so far signed the BIPA.

Observing that Brunei is the third largest producer of oil in South-East Asia and the fourth largest producer of liquefied natural gas (LNG), he hoped that the agreement would serve as a catalyst in boosting investment flows between the two countries.

The BIPA seeks to protect and promote investments from either country in the territory of the other country with the objective of increasing bilateral investment flow.
An official release said that the agreement also stipulates Most Favoured Nation (MFN) treatment and national treatment, besides providing elaborate dispute resolution mechanism.

BIPA is for a period of 10 years. Thereafter, it shall continue to remain in force until the expiry of 12 months from the date on which either party gives a written termination notice.

May 23rd, 2008
Source: The Hindu Businessline

Agriculture

Wheat buying hits record 20.71 million tonnes

Surpassing all expectations — official and unofficial — wheat procurement by the Government agencies has hit an all-time-high during the current 2008-09 rabi marketing season (April-March).

As on Friday, Food Corporation of India (FCI) and the State agencies had bought 207.10 lakh tonnes (lt) of wheat from the various mandis of the country breaking the previous record of 206.30 lt, achieved in the 2001-02 season.

And with daily procurement still in the region of 1.8-1.9 lt, there is every possibility of the total purchases ending up in excess of 210 lt (the bulk of the wheat gets marketed by early June). The current year’s record procurement is in contrast to the 111.28 lt and 92.26 lt levels of the preceding two seasons, with the latter, in fact, being the lowest ever since the 81.57 lt of 1996-97.

A significant reason behind the turnaround this year has been the conscious efforts by the Centre as well as the State Governments to make purchases from outside of Punjab and Haryana. In 2007-08, out of the total 111.28 lt, over 91 per cent was accounted for by these two States (67.81 lt from Punjab and 33.50 lt from Haryana), with Uttar Pradesh (5.46 lt), Rajasthan (3.83 lt), Madhya Pradesh (0.57 lt) and Bihar (0.08 lt) contributing relatively smaller quantities.

But this time, the Government agencies have so far mopped up unprecedented levels of wheat from Madhya Pradesh (18.73 lt), Rajasthan (8.72 lt), Gujarat (3.41 lt) and even Bihar (2.08 lt).

Uttar Pradesh, too, has witnessed a more than four-time jump in cumulative procurement (22.91 lt), even as Punjab (98.43 lt) and Haryana (52.02 lt) have provided an extra 49.14 lt over last year.

An enabling factor here was the high minimum support price of Rs 1,000 a quintal offered by the Centre, with States such as Madhya Pradesh even offering an extra Rs 100.
The high support prices, in conjunction with stringent stock-and-purchase declaration norms imposed by the Centre, deterred corporates and other big buyers from entering the market and leaving field open for the Government agencies.

May 24th, 2008
Source: The Hindu Businessline

AP aiming at 30% increase in rice output

The Government of Andhra Pradesh is targeting to increase rice production under National Food Security Mission in the State by about 30 per cent by 2011-12.
About one lakh tonnes of rice are being produced under National Food Security Mission in 11 districts in the State. “This will be going up to over 1.3 lakh tonnes by 2011-12 besides encouragement for production of pulses in 14 other districts,” Mr N. Raghuveera Reddy, Minister of Agriculture, Government of Andhra Pradesh, told newspersons here on Sunday.

Referring to the food security in the State, the Minister said the situation was “highly satisfactory” and there was no need for any worry.
“The efforts of State Government in promoting agriculture and interest of the farmers with full support from the Centre from 1999 general elections in the State have borne fruits with all round development,” he claimed.

The cultivation of food crops had increased from 68 lakh hectares in 2003-04 to 73.5 lakh hectares in 2007-08. The food crops production and productivity had improved from 137.28 lakh tonnes to 198.72 lakh tonnes and 3,011 kg/hectare to 3,323 kg/hectare respectively between 2003-04 and 2007-08, Mr Reddy said.

The rice cultivation alone had up from 29.75 lakh hectare in 2003-04 to 39.35 lakh hectare in 2007-08.

May 26th, 2008
Source: The Hindu Businessline